this should be complemented by strong public - private collaboration at both domestic and international level to strengthen collective resilience. with payment systems becoming more efficient and interconnected, it is also important to prevent their abuse by illicit actors, such as for money - laundering and terrorism financing ( ml / tf ). notably, the availability of instant payments poses challenges to traditional aml monitoring tools that operate on a batch mode, rather than on a real - time basis. regulations should thus focus on continuous enhancement of aml controls among industry players, supported by improved aml compliance procedures and more advanced monitoring approaches. this may include the use of machine learning and artificial intelligence capabilities to mitigate ml / tf risk, while preserving the speed and convenience of faster payment systems. proportionate regulation let me now turn to the next regulatory priority, which is proportionate regulation. importantly, efforts to strengthen the regulatory and supervisory framework for payments oversight must seek to uphold a key principle : proportionality. more than ever, regulators will have to make tough 3 / 6 bis central bankers'speeches judgment calls on the appropriate trade - offs between competing regulatory demands. for example, open data initiatives that seek to democratise access to customer information would need to consider implications to data security as well as cultural attitudes to data privacy. providing a seamless user experience to on - board customers for digital payments could also run counter to aml / cft controls that are traditionally held up as best practice. these are but a few of the examples of the dilemmas that we will have to grapple with. in this regard, a ‘ one - size - fits - all ’ approach is tempting because it is simple. but its simplicity is precisely why regulators must avoid it. effective regulation today demands differentiated regulatory requirements that cater for a spectrum of risk profiles. this should be ascertained after undertaking a granular assessment of these risk profiles, and identifying the necessary areas that continue to require risk mitigation measures. of note, this goes beyond having sandboxes, which are already more common in the regulator ’ s toolkit. in malaysia, for example, the regulatory regime for e - wallets is differentiated by size. this is supported by a tiered approach to managing aml / cft risks, where limits on account functionalities serve as safeguards where more simplified customer due - diligence ( cdd ) methods are applied. this reflects the differentiated level of risks across different types of ewallet accounts. while such

muhammad bin ibrahim : evolving the next frontier of islamic finance development through innovation speech by mr muhammad bin ibrahim, assistant governor of the central bank of malaysia, at the mock cheque exchange ceremony between the international centre for education in islamic finance ( inceif ) and bank islam, maybank islamic and affin islamic, kuala lumpur, 15 june 2010. * * * thank you for inviting me to witness the mock cheque exchange ceremony for the allocation of zakat contributions from bank islam, maybank islamic and affin islamic to the international centre for education in islamic finance ( inceif ). this act of giving signifies an exemplary commitment on the part of these islamic financial institutions to support human capital development in islamic finance. as a leading provider of advanced education in islamic finance, inceif plays an important role to position malaysia as a center for innovation and thought leadership in this field. but inceif alone would not be able to achieve this objective without the continuous efforts and support by all stakeholders within the industry. let me make a few remarks on innovation. few would argue on the role of innovation as the connerstone to sustaining growth and securing competitive advantage for any organization, industry, economy and nation. as we have seen in the more recent decades, innovation has fundamentally transformed the global financial landscape at a very rapid pace. innovation in the financial services industry has enabled financial institutions to obtain better insight into customer needs and correspondingly, develop new and better products to match their diverse needs, make significant improvements in operational efficiency by improving processes and business models as well as ensure more effective risk management. it has facilitated greater financial inclusion by allowing broader access to financial services in many emerging and developing countries. but the abilities to innovate will very much depend on the ability to get the necessary talent : the creativity to develop new ideas, the capacity to absorb knowledge and the capacity to acquire the new skill to turn ideas into results. this requires a talented workforce as the driving force of innovation. building such a workforce would thus become a constant challenge for the islamic financial services industry. in the context of islamic finance, human capital development is all the more important given that the islamic finance industry is still relatively in a nascent development phase. there is no doubt that the islamic financial services industry in malaysia has experienced an exciting and phenomenal growth. the proliferation of competitively priced islamic financial products to match the diverse and discerning needs of customers particularly in this recent decade is quite evident. but we cannot be compl