put in place while actively promoting their product arrangements that will give customers the peace of mind. this may include strengthening the effectiveness of fraud detection and prevention engine using the latest technology such as artificial intelligence and machine learning. additionally, offering liability protection programs and a commitment to resolve disputes within a stipulated timeframe would go a long way in providing assurance to customers. supporting this, financial institutions ’ mobile applications and internet banking channels must provide seamless ways for users to track their expenses. this would include budgeting features, instant notifications and possibly smart money management tools. some of these enhancements may be small tweaks with a potentially big impact to get users to be more comfortable with e - payments. going beyond payments to enhance value proposition to end - users this brings me to second key priority – the need to go beyond payments in response to certain “ new normals ” in the payments landscape. today, customers increasingly expect payments to be fast, frictionless and free. competition has also heightened. non - traditional players such as fintechs and bigtechs are increasingly relying on payments as entry point into financial services. against this backdrop, payment service providers must rethink their strategies to remain relevant and be sustainable in the long run. today, going cashless is more than just e - payments. instead, it should be about putting customers at the core of innovation to address real pain points and drive greater value creation. this means delivering integrated solutions to enhance the value proposition to end - users. in the e - wallet space, we have noticed the practice by some players in offering generous rewards including cashback to stimulate usage among users. while such practice may be effective in driving e - wallet adoption at the initial stage, it is questionable whether such practice is sustainable in the longer run. for instance, we have observed that the transaction volume of some players tend to fall significantly once the promotion period is over. to achieve a more sustainable migration, the industry should strengthen the value proposition of e - payments. greater focus should be placed on creating innovative and value - added solutions that go beyond payments. this may serve as a natural incentive for customers to adopt digital 2 / 4 bis central bankers'speeches financial services. to enhance the value proposition to end - users, bank negara malaysia has also focused its efforts on evolving our regulations to facilitate new business models. the ongoing work on the digital banking framework is one example, amid growing interest among traditional and nontraditional players to enter this segment. of importance,

growth to be between 0. 5 % and 1 % in 2010 and between 2 % and 2. 5 % for 2011. we therefore see some light at the end of the proverbial tunnel but one is not sure how helpful this new found optimism would be for the manufacturing sector. although the sector is estimated to have expanded by 1 % during the first quarter of 2010, the bank is forecasting a decline of nearly 4 % for the sector in 2010, following a fall of nearly 13 % in 2009. it goes without saying that the revised projection is largely predicated on the performance of tourism, as the sector ’ s performance has a spill - over effect on several industries, notably wholesale and retail, transportation and construction activity. various reasons have been suggested for the continued weaknesses in the manufacturing sector. these include : ( a ) high cost of production, particularly for energy, and hence the inability of the sector to compete with regional and international products. ( b ) low productivity, partly due to the adoption of relatively inefficient processes which in turn may be attributed to. ( c ) the continued reliance on aging and obsolete plants. a few years ago i read an article about the us auto industry. the author was trying to explain why the us industry was becoming increasingly unable to compete with its asian competitors, during the period from the mid 1980s to 1990s. the indicator used by the author was the labour - income ratio. this is the proportion of value added that goes to wages and fringe benefits. if that ratio goes above a certain threshold, apparently between 80 % and 85 %, productivity declines and capital formation falls too low to maintain present jobs, let alone create new ones. the author intimated that the us auto industry was operating with a labour – income ratio of between 85 % to 90 %. in contrast, the germans and japanese auto makers were operating on labour – income ratio of 75 % to 80 %. it was not surprising therefore that the germans and especially the japanese auto industry gained significant market shares at the expense of the us auto makers in the us market. the fact is that the labour – income ratios of 85 % to 90 % made capital formation impossible as us companies were barely able to generate or raise the investment capital needed to modernize their plants and convert them to the production of fuel efficient cars. we should recall that only recently general motors had to be supported by the us federal government, otherwise the company would have collapsed. it is my considered opinion that the manufacturing sector