mohd adhari belal din : cybersecurity – safeguarding the future for innovative financial inclusion remarks by mr mohd adhari belal din, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the " cybersecurity : safeguarding the future for innovative financial inclusion ", kuala lumpur, 1 august 2017. * * * it is my privilege to welcome you to this landmark event – a very important policy forum for policymakers and regulators to discuss on the significance of cybersecurity in safeguarding the future for innovative financial inclusion. intersection of financial inclusion and cybersecurity as digital financial services expands in reach, scope and scale, cybersecurity matters a great deal for policymakers and regulators with financial inclusion mandates. the fast - changing digital landscape has brought the financially excluded and underserved populations into the formal financial system, bringing about a positive impact on economic growth and stability. however the rapid paced innovation of digital financial services also opens up opportunities and incentives for cyber - attacks, which challenges the fundamental principles of information risk and cybersecurity management. leaders must understand the risks associated with digital innovation, and balance the imperative to protect their organisations and consumers with the need to adopt innovative technology approaches. the likelihood for cyber - attacks and fraud is exacerbated by those who are inexperienced with formal financial services and unfamiliar with consumer rights. low financial and technology literacy amongst consumers could translate to greater vulnerabilities and exposures. more worryingly, we have seen major cyberattacks occurring globally which caused disruptions to essential financial services and destroy savings or financial assets that the underbanked depend on. financial institutions are not only prime targets for cyberattacks but bear tremendous fiduciary and legal, regulatory, and compliance responsibility to protect customer data and privacy. safeguarding trust in the formal financial system is now particularly important for the newly included grassroots. in financial services, the push for digital innovation, disruptive technologies, delivery of more personalized customer experiences, and seamless access to consumers for more inclusion continuously introduces new threats. forrester research calls this dynamic an “ epic ” battle between privacy and digital innovation, and predicted that by 2020 financial services and insurance companies expect to generate the biggest portion of their total sales from digital products, services, or items sold online. alongside this drive toward digital business, many organisations rely on legacy it systems that are expensive to maintain and susceptible to more vulnerabilities,

greatly compounding the cybersecurity challenge. importance of cybersecurity the current chairman, president and ceo of ibm, ginni rometty had described cybercrime as “ the greatest threat to every profession, every industry, every company in the world. ” while cybersecurity used to be considered an issue primarily for the it folks, these days it is an agenda item for the entire c - suite. what has really changed? it is not just the frequency of media reports on cybersecurity breaches. if anything, these are merely symptomatic of a larger shift underway. cyber - attacks are fueled by increasingly sophisticated technologies along with relatively new trends in mobility usage, social media, and rapidly expanding connectivity, all in the hands of organized online criminal networks. 1 / 3 bis central bankers'speeches the first six months of 2017 have seen an inordinate number of cyber - attacks and they were not just the standard corporate breaches. already there has been viral, state - sponsored ransomware, leaks of spy tools from us intelligence agencies, targeted denial - of - service attacks and full - on campaign hacking. unfortunately, this is likely a prelude of more cyber - attacks to come. let me share with you some key statistics on cybersecurity : the global cost of cybercrime will reach usd2 trillion by 2019, a threefold increase from the 2015 estimate of usd500 billion. last year, cybersecurity researchers estimate that criminals made over usd1 billion through ransomware, with victims ranging from the chief executives of fortune 500 companies to mom - and - pop businesses and private individuals. 1 in 131 emails contained malware in 2016, the highest rate in 5 years. 76 % of organisations worldwide reported being victim of a phishing attack in 2016 only 38 percent of global organizations claim they are prepared to handle a sophisticated cyberattack. global spending to combat cybercrime will top usd80 billion this year, with organisations increasingly focusing on detection and response. i shall deliberate more on this shift of focus. shift cybersecurity focus to detection and response traditionally, the main focus of cybersecurity traditionally has been on prevention. however, organisations which have been taking preventative approaches to combat cybersecurity threats are coming to realise that this strategy have not always been successful in blocking malicious attacks. a paradigm shift is required to move from the ‘ old ways ’ of trying to prevent every threat. organisations need to emphasize on detecting and