Encik Abu Hassan Alshari Yahaya: Future proofing compliance – responsibility and response-ability Speech by Mr Encik Abu Hassan Alshari Yahaya, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 9th International Conference on Financial Crime and Terrorism Financing (IFCTF) "Future proofing Compliance: Responsibility and Response-ability", Kuala Lumpur, 5 October 2017. * * * It is a great pleasure for me to be here today among industry leaders and experts. As we approach the end of this conference, I would like to thank all of you for your participation and contribution in making this year’s IFCTF a success. I believe that the various sessions and the topics discussed in the past two days have provided significant insights and understanding towards strengthening our risk management and capabilities to mitigate the vulnerabilities from threats of money laundering and terrorism financing. I would like to commend CONG and AIF for the continuous effort and initiatives in enhancing the capacity and capability of the financial industry, to improve the industry’s response to financial crime and terrorism financing. As highlighted yesterday, countries are still facing fundamental challenges towards effective implementation of AML/CFT measures. Weak legal, regulatory and supervisory framework and inadequate risks understanding would have cascading effects, not just on compliance with international standards, but towards effective implementation of AML/CFT measures in achieving the intended outcomes.

These platforms have enabled a more direct and faster approach in seeking out sympathisers for donations. There is also evidence of the use of new financial products such as prepaid shopping gift cards and online game platform credits to transfer funds to finance terrorist and terrorist-related activities. A more dynamic and intelligent system, based on real-time data analytics supported by artificial intelligence and machine learning would be useful in detecting and halting such transactions. Importantly, we need to have the capability to detect the interconnectedness between terrorism financing and other crimes including robbery, fraud, kidnapping and drug trafficking. Threats of proliferation financing Every jurisdiction has a vital role to play in hindering the proliferation of weapons of mass destruction. We must be attentive to the various methods of circumventing sanctions relating to proliferation financing. Our monitoring and detection systems must be dynamic to incorporate changes in our environment. There are many documented cases of sanctions circumventions due to lapses in the system. This includes deficiencies in establishing beneficial owners which allows sanctions to be circumvented through conduits such as real estate firms and shell companies. Accounts opened with inadequate customer due diligence or transactions without appropriate screening are loopholes that can be exploited. These serve as important reminders that we must be wary and alert at all times in the daily operations. Responsibility Collectively, the roles and responsibilities that we have, extend beyond the scope of our individual organisations.