. it is conceivable that banks cease to exist as integrated multi - product businesses. they become instead product specialists in a rather fragmented landscape, finding it tough to earn more than commodity profits even in areas where, in the case of the longer established banks, they used to enjoy niche advantages. the other scenario emanates from the same starting point of intense competition. but in this case the new entrants do not have the resources to continue with their generous initial terms for long enough to secure a firm business foundation. the established banks reluctantly but necessarily take on the newcomers aggressively, utilising their financial strength and making extra efforts to build robust relationships across a broad range of services and to exploit the underlying inertia that customers may exhibit. in other words, they use the internet to consolidate their relationships and to see off the competition. customers are persuaded that it's not worth sacrificing the relationship for the sake of a few basis points. some customers may be lost, but some of these may anyway be ones which the banks can afford to say goodbye to. as a variant to this model, the banks may adopt different brands for their internet services, exploiting any opportunities available from product differentiation and market segmentation, but retaining the capacity from their standpoint to manage multiple relationships with any individual customer as one. one can envisage many other outcomes besides these examples. i know of no sure way of predicting what will happen, but my personal view is that the internet is likely to emerge more as a channel to build on existing relationships and to increase the efficiency of basic services than as something which changes the landscape of the banking industry. but perhaps i am guilty of thinking that everyone else possesses the same inertia as i do when it comes to changing one's habits. concluding remarks i have skimmed over a few issues which can rather loosely be said to fall under the heading of banking and development. there are many experts attending this symposium who will, i am sure, offer much deeper and more provocative insights into the economic outlook in general, and the relationship between financial development and growth in particular. i wish you all a fruitful and enjoyable couple of days.

agus d w martowardojo : the future of asia ’ s finance – financing for development welcoming remarks by mr agus d w martowardojo, governor of bank indonesia, at the joint imf - bank indonesia conference “ the future of asia ’ s finance : financing for development ”, jakarta, 2 september 2015. * * * • honorable managing director christine lagarde, the co - host of this conference ; • honorable minister bambang brodjonegoro, • honorable governors, deputy governors, ambassadors, representatives from regional and multilateral institutions, business community, our colleagues from academics, distinguished panelists, • ladies and gentlemen, good morning and warm welcome to all of you. 1. it offers me great pleasures to welcome you to this conference jointly co - hosted by bank indonesia and the imf with the topic of “ the future of asia ’ s finance : financing for development. ” the topic is indeed crucial considering wide financial gaps still exist in the region. in this regard, searching for an optimum financing would be challenging in the midst of current circumstances. 2. before i share my views on financing issues, allow me to discuss the global economic development. asia ’ s finance is now facing great challenges. in the near term, we may still confront an episode of heightened capital flows volatilities as consequences of unfavorable global economic condition. sluggish global economic growth continues to depress production and outlook. strong u. s. dollar following partial u. s. recovery and easing in europe and japan have tested some of asia ’ s economic buffers. weak commodity price has significantly hurt exports of some key regional economies. and more recently, china ’ s decision to rejuvenate its moderating growth through exchange rate policy has made the risk of external funding intensified. in fact, the increasing, yet again, global financial volatility, in a tune of 2013 global tantrum, is happening as we are sitting here, and it has led to a pull - back in capital flows from some emerging markets, including in asia. 3. while asia has remained broadly resilient to the risks, and it has led global growth for the past thirty years, its role to support global economic recovery seems to be weakening a little bit. a number of emerging market economies in the region are experiencing a declined economic growth and facing increased financial vulnerability, mostly related to capital reversal. 4. asia definitely needs the right policy mix to secure growth and