bandid nijathaworn : meeting security and risk challenges in the finance and infrastructure sectors opening address by dr bandid nijathaworn, deputy governor of the bank of thailand, at the seminar on “ meeting security and risk challenges in the finance and infrastructure sectors ”, bangkok, 11 february 2008. * * * distinguished guests ladies and gentlemen, it is a great pleasure to be here this morning, to give this opening remark for the seminar on “ meeting security and risk challenges in the finance and infrastructure sectors ”. and those of you who come from abroad to join the seminar, let me also welcome you to bangkok. today, risk management and security concern are important management issues for all businesses, as companies increasingly operate in an evolving global environment of rapid technological change and innovation. great advance in information technology has brought about radical changes in the way modern businesses are conducted and managed, and in the way new products and delivery channels are created. yet while these changes have imparted important benefits to businesses in terms of profitability and efficiency, they also pose greater challenge in terms of the risk exposure and the management of risks. in this regard, i think financial services and banking is of no exception. it is one industry that continues to face this important challenge. banking business, basically, is about risk - taking, managing risk and profiting from risk. the growing sophistication and complexity of financial activities, brought on by financial innovation and globalisation, have made risk management a key and important task for all banks. in particular, the integrity of real - time information on changing prices, valuation of financial position, and warning on breaches of internal control is most critical now for bank ’ s top management in taking timely and prudent decision. the recent episode in the global financial market has demonstrated again the costly implication of weaknesses in this area. for these reasons, information technology and its management has become a key part in business strategy as it can provide lever to create competitive edge and innovate business model, especially for providing customer reach in a cost - effective manner. but on top of this, pressure from competition and the need to cut costs also have forced banks to rethink their business models and strategies, leading to fundamental changes in the business process that include the proliferation of outsourcing, electronic banking, and the use of the internet. again, while these developments are positive, they also expose banks to a different aspect of risk management, for example how to manage and

postulates that knowledge behaves like radioactive decay. every fact has a ‘ half - life ’ and it will inevitably decay. it means that the frontier of knowledge also changes constantly. what we know today may be untrue tomorrow. this rings true for matters concerning banking. the immediate manner in which our knowledge becomes obsolete certainly ties in with our experience in banking and society at large. for one, the complexity of economic, environmental and social challenges seems to increase exponentially. furthermore, much of the knowledge frontier remains unexplored. consider this. we only utilise less than 0. 5 % of our existing data. there is a long way to go. the potential is enormous. in all likelihood, what we know today will be vastly different in two, five and 10 years into the future. we see this happening already in the banking sector, with the greater use of technology and in particular, more creative use of data analytics to better serve consumers and business needs. we are entering an age of new ways to harness knowledge. as knowledge is dynamic, not static, our approach to learning also needs to be in sync. this calls for lifelong learning, interdisciplinary thinking and the ability to convert knowledge into action. an innovative and effective banker would need to constantly push the boundaries of knowledge. one cannot assume that the ‘ facts ’ that we know today will remain true. just as in science, we should not take anything for granted, and remain open to insights from other fields of study. this is why the bank has encouraged greater professionalism through professional qualifications and lifelong learning. as benjamin franklin famously said, “ an investment in knowledge pays the best interest. ” it is from this perspective that we can look forward to the completion of the financial education hub located within the vicinity of bank negara malaysia. the hub is envisioned to advance education, research and nurture innovation in financial services. this will be achieved through its state - of - the - art staff training facilities, a financial services library that will serve the entire financial services community, innovation labs for information technology, a software development hub, a cybersecurity centre and an integrated security command centre. 2 / 4 bis central bankers'speeches future generations of financial services professionals will be nurtured and cultivated within this space. by congregating tens of thousands of finance practitioners within close proximity, we believe that great and exciting synergies will materialise to develop talent and raise professional standards of the industry. this meeting of great minds