With that in mind, today I would like to touch on four areas of particular relevance as we navigate this digital world: First, the role of digital leadership; Second, ensuring the quality of growth in the financial sector; Third, future-proofing the workforce; and Fourth, preparing our society for digital finance  Digital leadership in the face of changing market dynamics Let me turn first to digital leadership. Strong digital leadership starts with an acceptance of a new normal. Historically, finance has been a close-knit community. But the barriers to entry are being lifted by technology. As I alluded to earlier, this has blurred the boundaries of what it means to be a bank, or a financial services provider. As a result, banks are no longer just competing with other banks. Non-traditional players – such as fintech firms and platform-based companies – are increasingly well-positioned to offer financial services. Digital disruptors want to not only gain market share, but to transform the market itself. This is reflected in the willingness to take loss-leading positions when entering a market. The changing market dynamics raise some important strategic questions for banks – including how banks will choose to fundamentally approach competition, what this means for existing business models, and what outcomes this will entail both in the short and longer term. One strategy has been to leverage opportunities for collaboration – whether among existing players or new entrants. We see this emerging as an increasingly important, if not inevitable, response globally on several fronts.

The sharing of credit information reduces asymmetries of information and search costs, thereby enhancing access to financing to a broader spectrum of the population. It also allows for more effective risk-based pricing, which could lower the cost of financing for borrowers with good credit background and history. With the availability of non-traditional data provided by credit reporting agencies, borrowers demonstrating strong financial characters are able to leverage on such “reputational collateral” to obtain borrowings at favorable terms and rates. For lenders, credit information helps to strengthen the entire chain of credit evaluation and credit risk management. The availability of a wide range of credit information on a real-time basis facilitates advancements in risk and decision-making analysis, thus contributing towards institutional soundness. For regulators, this will enhance the stability of the overall financial system. Additionally, from a social perspective, the sharing of credit information contributes towards inculcating financial discipline and avoiding incidences of imprudent and excessive borrowings among borrowers. All these, combined, would definitely enhance the overall credit culture in an economy. The benefits of having a well functioning credit reporting infrastructure are evidenced in Malaysia. The Central Credit Reference Information System, or better known as CCRIS, which is owned and operated by Bank Negara Malaysia, enables real time access to both positive and negative credit information on all borrowers in the banking system and of a selected group of non-banks. The system contains more than 22 million outstanding credit accounts and 7.9 million borrower records.