In developing the financial sector, it contributes substantially to the growth of the professional services sector, that includes the network of supporting services encompassing software development, telecommunications, shared services, and legal and accounting services. Often, the ability of the financial sector to play this catalyst role depends on the sector having sufficient critical mass. Such a financial sector is able to play an important role in mobilising talent and business linkages to strengthen research and development efforts and spur innovation in other economic sectors. Through the channeling of productivity, the financial sector can drive endogenous growth in other economic sectors. Let me turn to two areas where Malaysia has strong competitive advantage. The first is in Islamic finance and the second is shared services and outsourcing (SSO). Malaysia is at the forefront in the development of Islamic finance, housing the world's largest sukuk market with 65.8% of the global outstanding sukuk as at end-March 2008. Building on our established foundation in Islamic finance in terms of experience, infrastructure and knowledge, the promotion of Malaysia as an international Islamic financial hub is expected to catalyse growth in other economic sectors. Positive effects are expected to spill over to the markets and related industries such as the property market and health, education and business services sectors, spreading the sector's growth momentum to the economy. Similarly, there exists potential for a greater mutually reinforcing relationship between the financial sector and the SSO industry in Malaysia.

Zeti Akhtar Aziz: The next wave for the financial system in Malaysia Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 12th Malaysian Banking Summit organised by ASLI "Taking the Leap in Paradigm Shift of Banking – New Wave, New Ventures", Kuala Lumpur, 5 June 2008. *  *  *  In this recent decade we have seen a period of profound modernisation of the Malaysian banking sector. Today, the banking sector has evolved from facilitating and supporting the economic growth process to becoming a significant source of growth. Innovation and product pioneering has proliferated the diversity of products and services offered. The adoption of best business practices, the use of new technologies, systematic cross selling and the new means of interface with consumers have become more pervasive. The banking system is also significantly stronger, reinforced by strengthened institutional structures, enhanced financial safety nets and developed financial markets, that includes one of the most developed bond markets in this region. Progressive deregulation and liberalisation have increased the flexibilities for banking institutions to capitalise on new business opportunities, both onshore and overseas. The strengthened incentives and more competitive environment have also prompted continuous performance improvements. Indeed, these developments have well positioned the banking sector to take the next leap forward. It is my pleasure to be here this morning to speak at this year's Malaysian Banking Summit which has focussed on the theme, the next wave for the banking system in Malaysia.