Given this twofold mission, we base our activities on a principle of neutrality and freedom of choice, which in turn means that we cannot favour one payment instrument over another and do not seek to influence people’s behaviour or preferences. 1. In the payment instrument landscape, we are currently seeing a twin trend as  cash payments go down, while cashless payments undergo a transformation driven by behavioural changes and technological innovation. Shifts in consumption approaches, such as the growth of e-commerce, are fuelling a steady  decline in the use of cash in transactions, while the use of electronic payment instruments is increasing. Statistically speaking, the volume of banknotes returned by the public to cash processing firms fell by over 10% between 2012 and 2017. However, this decline needs to be put into context, because banknotes still dominate face-to-face transactions, particularly small-value transactions, as shown by recent Eurosystem research, which found that banknotes continue to be the main payment instrument in Europe and France by number of transactions, accounting for 79% of transactions in the euro area and 68% in France. In value terms, they make up 54% and 28% respectively. At the same time, we are seeing a rise in electronic payments, which are not merely growing but also developing along four different pathways:  Spreading technology: advances in internet technologies and devices have paved the way to increase the number of channels used to initiate and accept payments. The ways in which these technologies are used are becoming more diversified and increasingly digital.

New ancillary players such as money brokers have facilitated the development of this market. Islamic finance as a sustainable intermediation process in this more challenging environment has been characterised by powerful forces of change that have brought significant implications on both the domestic and global financial systems, and marked by turbulent financial conditions. This requires the development of robust and resilient financial institutions. Institutional capacity enhancement is a central strategy towards this objective. This requires having a high calibre workforce and management teams with the required expertise, leveraging on the technology, strengthening research and development, and instituting risk management systems. A structured consumer education programme has increased awareness of the Islamic financial system and the advances it offers. The Islamic capital market essentially comprises the equity market and the debt market. Phenomenal growth has been recorded in both these markets. In the debt market, the outstanding Islamic debt securities as at-end June 2003 were 45.5% or RM68.2 billion of the total outstanding private debt securities. In 2002, the new issuance of Islamic debt securities surpassed the conventional private debt securities amounting to RM13.8 billion. It is interesting to note that one-third of the issues have been by multinationals. In the equity market, more than 80% of the counters in the Kuala Lumpur Stock Exchange are Shariah-compliant. The takaful market has also shown impressive growth and the four takaful companies now offers a broad range of products in both family and general business which is comparable to the conventional counterparts.