While improving understanding is crucial, it also needs to be complemented with concrete actions that would improve the effectiveness of preventive and enforcement actions. For example, this could be done by incorporating and overlaying these insights into the transaction monitoring process and customer profiling. The implementation of the Financial Action Task Force (FATF) recommendations will allow more effective actions to be undertaken. Both aspects of compliance, that is, technical and effectiveness, are equally important. The philosophy behind the intended outcomes is the integrated manner in which countries should combat financial crimes. This would require cooperation from all parties involved and encompass the whole eco-system of combating financial crime: investigation, prosecution, conviction and confiscation. No stone should be left unturned. FATF in its 2015 evaluation, recognised Malaysia as having high technical compliance but called on Malaysia to ensure greater effectiveness in producing the desired outcomes of our system especially in the area of investigation, prosecution, and forfeiture of laundered properties. Understanding of new and emerging risks and having a comprehensive toolkit  2/5  BIS central bankers' speeches  My second point is the need to have a deep understanding of new and emerging risks and a comprehensive toolkit to effectively execute our shared responsibility to eradicate financial crime. All of you may have heard this many times, but it is worth restating that the rapid advancement in technology is a major running story for our age. While this presents wonderful opportunities for economic development, it also creates attendant risks and fresh set of challenges.

Thus, the human and societal cost is very real. It is pervasive and destructive, rippling across society, and if left unattended, will accumulate over time. Imagine the thousands of schools that could have been built, numerous hospitals with the best care and the strongest social safety nets that can help those most in need. The persistence of financial crimes will disproportionately impact the most vulnerable section of society. It erodes trust and leads to a breakdown in society. We in the financial sector have an instrumental role to play in this area. Our job involves the intermediation of money flows. We have the ability to prevent and facilitate investigations and prosecution of these crimes. In light of this, allow me to make three points on how we can achieve greater governance and transparency in the financial sector, which will reshape Malaysia’s future for the better. Shared responsibility to enhance compliance and prevention The first point that I would like to make is that combating financial crime is a shared responsibility. It is not the sole responsibility of central bank supervisors, financial intelligent units, banks or even the compliance function within financial institutions. Just as individuals, all of us have a collective responsibility to contribute to nation building, it is the responsibility of each player in the financial system, law enforcement agencies, prosecution agencies and the judiciary to look out for potential abuses, stamp out financial crimes and not let the perpetrators get away. For financial crimes do not occur in isolation.