zeti akhtar aziz : building human capital for emerging challenges speech by dr zeti akhtar aziz, governor of the central bank of malaysia, at the 9th bank human resources conference 2008 organised by the indian institute of banking and finance ( iibf ) : " building human capital for emerging challenges ", kuala lumpur, 29 february 2008. * * * let me first of all extend a warm welcome to the participants of this 9th bank human resource conference organised by the indian institute of banking and finance ( iibf ). it is our honour to host this conference that is being held outside india for the first time. this is one of the concrete outcomes of the alliance that has been entered into between the indian institute of banking and finance and the international centre for leadership in finance following the mou that was signed about three months ago between the two organisations. the development of human capital has to be a constant undertaking in an environment of constant change. as recent as ten years ago, we have seen the economic and financial environment dramatically transformed. there has therefore required a corresponding change in the knowledge, skills, competencies and capabilities that are now required, in particular, by the banking industry, which is a highly knowledge - intensive and skills based industry. new challenges have also emerged in this environment arising from the rapid globalisation and internationalisation of the financial system and the significant advancement in technology. these developments have led to a rapid pace of innovation and enhanced international interdependence and inter - linkages. this has generated an environment that is increasingly more complex, competitive, uncertain and ambiguous. the recent episodes of financial turmoil, have shown that even financial systems in developed and advanced economies continue to be vulnerable to financial stress. this more difficult operating environment demands new skills and the ability to manage these new challenges. indeed, the role of leadership has changed. it is essential to have the talent that are not only able to see the new emerging opportunities, but also to be able to deal with the high level of unpredictability and navigate through turbulent conditions. the industry leaders need to be visionary and comprehend future trends, chart strategic directions and adapt to changes to stay competitive and relevant. effective leaders in this era, will be those who are continuous learners, who are on the cutting edge of excellence, who have strong convictions, and yet, having humility to recognise the need to reinvent themselves and inspire their organization to adapt to the new environment. such attributes are vital if the financial services sector is to

forge ahead and remain at the forefront of new innovations and thus secure long - term competitiveness. in this process, there needs to be avenues for continuous learning. the establishment of iclif is part of our commitment towards providing such an avenue to enhance leadership capability and develop world - class leaders in the financial services sector. the changing configuration of the global economy and financial markets, increasing regional economic and financial integration, increasing internationalization of financial services, the continued enhancement to the regulatory structures and approaches will have a significant bearing on the future of the financial services industry. the road in front of us is therefore likely to be significantly different to the one from which we have traveled on. the investment in human capital development is thus important for the future development and growth in the financial services sector. building human capital has become much emphasised in today's world. successful banking institutions in the future will be increasingly dependent on intangible assets such as talent. as competition intensifies, the need for banking institutions to attract and retain the best skills and talents will become more urgent. going forward, the availability of talents will become the pivotal factor determining the capacity for the industry to reinvent and transform. banking institutions would need professionals with the requisite skills and expertise not only at the strategic and management level, but also at the technical and operational level. successful institutions will be the ones which accord high priority to the continuous enhancement of human capital. human capital development has thus become of strategic importance and is integral to the success of an organisation. the involvement by senior executives in the management of human capital development has also become essential. senior executives need to take the lead and devote a considerable amount of their time to this initiative. human resource development functions is integral to the talent management process and in supporting the human capital management strategy. of equal importance is that this should occur at all levels in the organisation. in essence, the accountability for talent development requires concerted efforts throughout the organization and needs to be embedded as part of the working culture that is communicated, shared and understood at all levels. while the need for human capital development is apparent, what is less apparent are the appropriate methods and policies that should be adopted to advance human capital development. the financial services industry needs to identify the appropriate strategic direction for human capital development. attention need to be given to the entry level, to the specialists and to the senior management levels. this would benefit from greater industryuniversity linkages which is a major channel through which the talent requirement