zeti akhtar aziz : raising standards in malaysia ’ s financial services industry remarks by dr zeti akhtar aziz, governor of the central bank of malaysia ( bank negara malaysia ), at the centre of excellence ( ace ) ground breaking ceremony, kuala lumpur, 22 february 2016. * * * it is my very great pleasure to be here on the occasion of the ground breaking ceremony to the ace – a centre of excellence. ace is a very much welcomed industry led initiative to raise the level of capability and professionalism for the work force in the malaysian financial services industry. our financial services industry continues to be reshaped and transformed by several major forces of change that range from the new demands of consumers and businesses to the rapid advancement in technology, the global regulatory reforms and the continued globalisation of finance. on the domestic front we are also seeing the continued rapid expansion of the domestic financial services industry, and the deepening of regional economic and financial integration. given the paramount role of the financial system in supporting our real economy we require a financial system that will best serve our economy. it not only needs to be effective and efficient and thus competitive but also robust and resilient. going forward, operating in this highly dynamic environment will become increasingly more challenging. today the malaysian financial industry employs more than 150, 000 people, and requires approximately 73, 000 new hires over the next 10 years. with the changes that are reshaping the financial system, skills requirements in the financial industry will also change. today new careers are also being created in more diverse areas including in areas of finance that have leveraged on technology such as in internet based services. further challenges will arise from the intensification of competition for talent in a more borderless workplace. given the importance of talent to performance greater attention needs to be accorded to talent development. there also continues to be an acute talent shortage of such skilled talent in our financial services industry. if left unresolved it will impede future growth and performance of the industry. this existing significant skills gap is already becoming a constraint on industry growth. indicators from the aif skills gap index, which measures skills gaps within the workforce, point to a significant deficit in several skill sets that are considered important in the financial services industry. the creation of ace represents an important step in efforts to provide a comprehensive and integrated solution for such skills and talent development for the industry. at the executive level, leadership, corporate governance and ethics are issues that have dominated attention

reliance on foreign insurance markets and the domestic insurance markets within asean to support economic activity. this will contribute towards achieving greater risk diversification, while at the same time, reaping more benefits for asean economies from increasing economic integration. asean currently has a total population of 568 million, and a large proportion comprising of a young workforce in the middle income group. the changing priorities and lifestyles of this new generation, growing wealth and increasing proportion of middle income population will also support continued and further growth in demand for investment - linked and wealth management products. as a result, the insurance industry has, and will continue to, expand its role beyond merely providing protection products. against this backdrop, prospects for increasing the insurance penetration rate in our economies are clearly positive. however, this will hinge on the ability of the industry to respond to these changing demographics and dynamics in the financial system. in 2006, the insurance premiums averaged 2. 95 % of gdp in south east asia as compared with 8. 8 % in the u. s. or 16. 5 % in the u. k. compared to the banking sector, the insurance industry remains relatively less developed and commands a significantly smaller percentage of the total financial assets of the region's financial system. to tap these opportunities, appropriate strategies, new thinking and approaches will be required. in this regard, a significant development has been the evolution of alternative distribution mechanisms for insurance products and services in the region, notably through bancassurance. indeed, bancassurance has developed in a number of asean markets into a viable alternative distribution approach to the traditional agency force. perhaps, in those markets where the insurance distribution channels through agency force have yet to be firmly established, bancassurance could provide a quantum leap to allow insurers to rapidly widen their outreach by tapping into an established banking network and client base. worldwide, insurers have been successfully leveraging on bancassurance to gain a foothold in markets with low insurance penetration and a limited variety of distribution channels. bancassurance can increase market penetration given the relatively higher level of public confidence in dealings with banks. for the banks and insurers, capitalising on synergies derived from tapping into the banks'extensive customer base to offer consumers comprehensive financial solutions while optimising on the branch network have proven to be highly successful strategies towards mutually improving productivity and profitability. in malaysia, bancassurance constitutes a significant feature of malaysia's financial landscape, and