The future of augmenting protection with prevention can be distilled through three pillars: First, by creating awareness of current risk levels Second, by suggesting a change in behaviour And third, by offering incentives for changes in behaviour The first two pillars are closely linked and is typically in the form of real-time risk mitigation as well as early warning systems. For instance, prevention triggers such as missed safety task notifications and water leakage alerts to activate emergency repair services can help prevent accidents. Telematics can also connect insurers and farmers to data from weather systems for potential safety warnings. However, raising awareness of risky behaviour and how to address them are not enough. It is also fundamental to encourage people to instigate real and sustainable changes in behaviour. Jonas Salk, one of the first successful medical researchers to develop polio vaccines once said that "the reward for work well done is the opportunity to do more". Insurers and takaful operators can leverage consumers' perception of the value of rewards by nudging them to adopt safer and healthier behaviours. Elements of  4/6  BIS - Central bankers' speeches  gamification and behavioural economics can also be integrated – for example, a driving score leader board can motivate drivers to collect higher scores by adopting safer driving behaviours. We recognise that many of these successful models require tie ups and expertise beyond traditional business lines. To cater to these new digital realities, the Bank has been proactive in ensuring our regulations are adapted regularly.

Starting with monetary policy, the primary aim at the current juncture is to strike the right balance between accommodating domestic recovery while ensuring stability in the long-term. As mentioned earlier, recent monetary policy actions were geared towards temporarily addressing risks to growth. In the context of a sharp contraction in economic 2  BIS central bankers’ speeches  activity from the floods, moderating inflationary risks, and pronounced headwinds from the global economy, the MPC judged this to be most appropriate. Such policy actions have helped to shore up confidence and hasten the recovery process. However, with clearer signs of a pickup in economic activity and the recent rise in global oil prices, upside risks to inflation has become more elevated. It is unlikely though that inflation would accelerate to the extent that would threaten economic stability. Nonetheless, monetary policy will remain watchful as the pick-up in public and private spending and cost-side pressure stemming from various government stimulus packages may add extra inflationary pressure in the period ahead. From a longer-term perspective, let me reiterate our commitment to the inflation targeting framework. Since its adoption over 10 years ago, this framework has endowed monetary policy with a degree of flexibility and credibility that has proved extremely valuable. Especially through trying times with high levels of uncertainty, the framework has imparted a degree of stability by helping to anchor public expectations of monetary policy. In delivering our primary mandate of macroeconomic stability, inflation targeting will continue to be a central pillar.