Under this framework, banks and non-banks alike collaborate at the infrastructure level through a shared payment infrastructure, while individual players compete at the product level by developing innovative value-added features. This approach is envisioned to expand the network reach at a lower cost, while promoting competition in areas that advance financial inclusion, higher service levels and the delivery of a superior customer experience. There are clear synergies to be gained from such collaborative efforts. They enable technological infrastructure to be shared across the industry. This shifts the competitive focus towards improving the value created for customers and the economy at large, rather than a race towards building proprietary networks that ultimately leads to market fragmentation. However, the effect of this is also a sharp laser focus on bottlenecks within individual firms. By levelling the playing field, firms will face a greater urgency to address internal constraints that prevent them from capitalizing on opportunities for higher growth and productivity. This may well be the most important challenge for digital leaders. Elevating the quality of financial sector growth This brings me to the quality of financial sector growth. There are two perspectives to this. First, digitisation offers enormous potential for the financial sector to achieve what was not possible before, at least not without prohibitive costs. And second, the transition to a digital economy itself calls for a re-orientation of the financial sector to meet the new business demands for financial services.

In the blockchain space, the industry in a number of jurisdictions has pooled resources to defray the cost of experimentation involved in developing scaleable use cases for the technology’s application. In Malaysia, nine banks have done this by coming together to develop blockchain applications for trade finance. Establishing shared networks, or opening up previously closed ones, is also gaining traction. This can be seen in the growing use of Open Application Programme Interfaces (or Open APIs). Over the last five years, publications of APIs in the financial sector have increased exponentially, with an estimated 200 new APIs published every year. In a survey that we conducted earlier this year, more than half of banks and insurers in Malaysia indicated plans to roll out open APIs in the near to medium term. At the industry level, the Bank has established an open API implementation group with members drawn from the industry, fintech community and key stakeholders to develop open API standards 2/5  BIS central bankers' speeches  for the financial sector as part of efforts to broaden access and promote innovation and competition. On the risk management front, the World Economic Forum announced less than three weeks ago the creation of a consortium to facilitate more coordinated efforts in addressing cybersecurity risks. This entails developing common principles for risk assessments, guidance for implementation, and a scoring framework. In the area of payments, the Bank has just last week issued the Interoperable Credit Transfer Framework (ICTF), which promotes collaborative competition or ‘co-opetition’ for mobile payments.