are : technological solutions that reduce back office costs ; more efficient loan processing ; and an improved customer experience through smartphone applications and other mobile technology. this proactive perspective leverages innovation as a strategic differentiator and competitive advantage, rather than just a means to enhance efficiency. the speed and magnitude of these changes also have implications for us as supervisors. we must keep pace and understand the risks associated with innovation so that we can appropriately focus our supervisory efforts on new operational, compliance, and reputational risks. for example, supervisory and regulatory letter 13 – 19, “ guidance on managing outsourcing risk, ” provides supervisory expectations on partnering with outside vendors. while supervisors can provide some focus on emerging risks, it is ultimately the responsibility of each firm and its board to identify the relevant risks associated with new technologies and make appropriate and prudent business decisions for their institutions and customers. cybersecurity the potential benefits associated with these new technologies are accompanied by the risks posed by cybersecurity. cybersecurity risks, the third topic on my list, continue to raise challenges for all types of firms in the financial system, ranging from supervised banks to financial utilities to non - bank financial firms to government agencies. while these entities differ in size, purpose, and mission, the common threats associated with cybersecurity represent a universal concern. indeed, in my regular meetings with supervisory colleagues and supervised institutions, cybersecurity is almost always at the top of the risk list. frequently cited challenges by local institutions include : attracting and retaining information technology talent, as these skilled individuals are in high demand and implementing a sufficiently robust vendor management program for technology services outsourced to third - party providers. while we expect firms to adequately manage a number of financial and operational risks such as credit risk, market risk, and operational risk, the nature of the cybersecurity risk differs in one key aspect – motivation. a cybersecurity attacker might be a nation - state or hacker with the intention to disrupt or damage a critical infrastructure sustaining the u. s. and global economy. or, the attack may be financial in nature, where the perpetrator is engaging in fraud and seeking to profit. these motivations suggest that the cyber threat is more intentional than other risks. this intentionality coupled with the resources of some perpetrators raises the stakes significantly and makes cyber defense much more difficult. we recognize that addressing the cyber threat is a complicated and expensive undertaking, but it is an essential one. all

, private sector and citizens - accept their specific responsibilities in this regard. the governments have the responsibility for providing the environment in which economic and social development can take place, and the rights of individuals are protected. the private sector, particularly in this new era, to produce goods and services, which are internationally competitive. the citizens, to participate in political, social and economic activities, which lead to the development of the society. there are two particular examples i would want to bring to your attention. first, in the demands made by citizens on governments, we must be aware of the fact that these are financed by taxation on the public. second, in the case of loans made by banks, we must realise that these are made out of the deposits of other citizens. we need to have a knowledgeable and responsible community which, in the face of the challenging domestic and external environment, makes judicious and objective choices, to achieve our ultimate goal which is the welfare of our people.