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. the comprehensive nature of the information facilitates the development and validation of credit scoring models by the banking institutions, leading to more robust credit decisions. information provided through ccris allows financial institutions to look beyond collateral and cash flow statements, to understand the borrowers ’ track record in making payments. this undoubtedly contributes to higher loan growth and better asset quality. since the inception of ccris in 2001, loan outstanding grew at an annual average rate of 8. 9 %, while the overall impairment ratio showed a significant decline bis central bankers ’ speeches from its peak of 16. 2 % in 2001 to 2. 2 % currently. the world bank, in its doing business report, has ranked malaysia no. 1 for five consecutive years in the category of “ getting credit ”. another example is the credit bureau malaysia ( cbm ) which was established to assist smes build credible credit records from transactions outside the regulated banking system such as transactions with suppliers and utility companies. with this credible credit record, smes that utilise the formal banking system for the first time will be able to more effectively obtain access to finance. cbm also has a comprehensive credit scoring methodology which helps banking institutions assess the credit worthiness of potential customers. further, cbm plays an important role in educating smes on how credit scores are calculated and how borrowers can improve their business operations and transaction conduct to improve their credit scores. at end - september 2012, cbm has 28, 337 sme members and had produced 707, 164 credit reports. the development and growth of credit information registries needs to be supported by a robust regulatory and supervisory framework. as the recovery in the global economy continues to be weighed down by uncertainties, greater attention is been focused on the role and scope of shadow banking entities in transmitting risks to the overall financial system. such entities include those outside the regulated banking system that are involved in the extension of credit to borrowers or facilitate the credit intermediation process. whilst credit information registries

they bear. as the financial industry evolves into digital, it is inevitable that the industry becomes vulnerable to various new threats and risk factors, especially in the domain of financial crimes and terrorism financing. in the effort to mitigate these risks, it is important that we embrace technology and use it to our advantage in order to strengthen our defences against financial crimes and terrorism financing. there are many areas in which the industry could benefit from the latest in technology. 1. firstly, the enhancement of transaction monitoring and reporting system through the use of advanced big data mining and analysis method. the advancement in artificial intelligence and machine learning enables us to collect and analyse data in a way that was not possible before. this allows us to gain new and important insights that will contribute significantly to the prevention of financial crimes. furthermore, the ability to tap into vast amount of information also helps promote better client management which would encourage wider 1 / 4 bis central bankers'speeches financial inclusion and tailored customer service ; 2. secondly, the use of technology to complement and support the compliance function especially in the area of higher risk. a good example of this is demonstrated through the use of digital verification to overcome challenges surrounding non - face - to - face verification and transaction. online identification recognition and biometric verification such as facial, voice and fingerprints recognition offer a new layer of security and potential increase in efficiency for the financial sector. such advanced systems have the potential to strengthen the existing framework and process to minimise fraud and error. it is all too common to view technology as a disruption and a threat to the way we are used to doing things. nevertheless, when technological change is managed appropriately and its related risks are mitigated, we can turn it into an enabler of progress for the financial industry. there is always a group of people who are relentless in their criminal pursuit of economic profit at the expense of others. it is only through our collective efforts that we can manage this negative externality of technological advancement. challenges posed by cryptocurrency for aml as all of you are aware, the next frontier in the financial industry is the advancement in blockchain technology that allows the existence of cryptocurrency. with the global market capitalisation now standing at approximately us $ 160 billion1, cryptocurrencies could become a major part of the financial system that offers new and exciting opportunities as well as challenges for the industry and regulators. however, cryptocurrency is vulnerable to criminal abuse due to the