first, for many central banks, the payment mandate has taken on a much more important strategic focus – perhaps not seen to the same degree in earlier periods. technological advancements offer enormous potential to achieve faster, lower - cost and convenient payments. harnessing this potential has inevitably involved a significant role for central banks to address coordination issues in a way that reduces fragmentation while encouraging competition. it also falls on central banks to ensure that payment systems remain safe and reliable amid new and emerging risks. and central banks have a keen interest in ensuring that technology works to create more inclusive finance for all. for these reasons, central banks have generally been very visible in strategic initiatives to drive the adoption of digital payments, improve cross - border payment arrangements, and modernise financial market infrastructures. in these examples, central banks have assumed a key role in setting the pace and driving change by actively bringing together stakeholders to work in concert. the second notable impact concerns the more significant interdependencies that have emerged across functions within central banks. radical developments in the payment space have created a strong current, forcing different parts of central banks to come together to better understand and untangle payment trends and how they interact with the economy and society. this effect has been pervasive – certainly in our experience – involving those working within areas of supervision, financial markets, financial development, monetary policy, technology, risk management, fraud and financial education as well as financial inclusion. this evolution in how central banks approach their responsibility for payments is driven in part by a desire to encourage competition and innovation in financial services in order to better meet current and future needs of the economy. critically, it also reflects the need to anticipate and manage risks to the central bank's mandates. the pace of change and potentially far - reaching impact of payment innovations requires central banks to carefully consider how such innovations affect the complex balance between resiliency, inclusivity, efficiency and policy efficacy. we need to remain vigilant to new pockets of risk even as we pursue measures that aim to encourage responsible innovation. for example, with many transactions becoming almost real - time, intraday liquidity management becomes more crucial for players. it infrastructure and cyber security have shifted into sharp focus especially since the surface along the payment value chain for threat actors to exploit has expanded significantly. 2 / 5 bis - central bankers'speeches the regulatory perimeter today also poses new challenges. banks now co - exist alongside significant non - bank payment providers that include'big tech'and

muhammad bin ibrahim : developments in malaysia ’ s money services business speech by mr muhammad bin ibrahim, deputy governor of the central bank of malaysia, at the launch of the malaysian association of money services business, kuala lumpur, 9 january 2014. * * * over the last two years, this industry has experienced significant change with the introduction of a new and strengthened legislative framework for the industry. we have been encouraged by the positive developments that have been achieved during this period. many of you supported this change and are well on your way to build businesses that will succeed through time with higher standards of professional service and integrity. through our interaction and engagement with members of the industry, we hope that by now, the industry is clear that the status quo cannot be an option. the industry must be able to operate with a high degree of transparency and in full compliance with applicable laws and regulations. this is important not only to build confidence in the services that the industry provides, but also to protect the integrity of the broader financial system. the sanctity of financial system is of utmost importance as it is the pillar for our economy. vision and regulatory expectation for the industry with the enactment of the money services business act 2011, the law provides the powers to create an enabling condition to deliver better consumer protection, improve business opportunities, and strengthen safeguards against the risk of money laundering and other illegal activities. significant resources have been devoted by the bank in the last two years to achieve these objectives. one of it was the relicensing process. we had reassessed a total of 839 money changing companies and remittance service providers and issued new licences to those that met the necessary requirements. we have also provided time for companies to improve their operations. these companies had demonstrated that they are able to comply with the required rules. for those that qualify the licensing processes, improvements in their operations could be achieved within a reasonable timeframe. we have also made it clear to the industry that companies found to be carrying out unauthorised activities will be firmly dealt with through enforcement actions. out of the 839 licenses issued earlier, the relicensing process had reduced a total of 365 licenses as a result of revocation, merger, voluntary surrender of license or industry players themselves decided to convert to become an agent of a larger entity. we have significantly increased our interactions with the industry to help companies understand the regulatory requirements that must be observed. these engagements have also helped the bank better understand the practical issues that are faced by