the board of directors and management. the policy on shareholding will therefore be enhanced to promote greater shareholder activism within banking institutions. shareholders need to be concerned with the practices of banking institutions, particularly those which can have adverse implications on depositors'interests and on financial stability. similarly, given the increasingly competitive environment, advancement in risk management practices and the strengthened corporate governance framework, a more flexible policy framework on lending to connected parties will be put in place. however, to prevent abuses of such flexibilities, there will be safeguards and conditions that need to be observed by banking institutions. ladies and gentlemen, the adoption of a principle - based regulatory approach will provide banking institutions with greater flexibility in deciding on strategic options in a more competitive environment. as the banking industry grows at an accelerating pace, there are common areas where collective efforts by the industry will not only bring benefits to the financial sector but also to the overall economy. in this regard, there is an increasing trend among developed countries such as the united kingdom, canada, and australia, where the bankers associations have an important role in spearheading initiatives to promote high standards of ethical code of market conduct to meet consumers'rising expectations and demands. the bankers associations have increasingly assumed the role as a focal point for consultation with not only the regulatory authorities, but also by the other stakeholders on policies affecting the financial sector. in this respect, such associations have played an important complementary role to the regulatory authorities'efforts in promoting a more progressive, dynamic and resilient banking system. in addition, banking associations in these countries have also acted as the voice for the industry in articulating the position of their members to promote the interests of the industry. in malaysia, there are several areas of common interest to the industry which the associations can spearhead. it is, therefore, to the benefit of the industry to reassess the role of the associations with respect to taking forward common initiatives and interests of the industry. ladies and gentlemen, moving forward, consumer and sme financing will continue to be two important areas of growth. the overall macroeconomic and interest rate environment would continue to be supportive of growth in these two sectors. the challenge for banking institutions is to ensure that consumers and the businesses have access to a wide range of products, while at the same time ensuring that the necessary infrastructure is in place to manage risks arising from these businesses. this is to ensure that lending to these sectors would be sustainable and avoid the risks that have recently been experienced in

nor shamsiah mohd yunus : advancing digitalisation for recovery, sustainability and inclusion speech by ms nor shamsiah mohd yunus, governor of the central bank of malaysia ( bank negara malaysia ), at the myfintech week 2022, virtual, 24 january 2022. * * * assalamualaikum, bismillahirrahmanirrahim and welcome to myfintech week 2022. myfintech week is an important event for malaysia ’ s financial sector. it is here where changemakers from finance, technology, government, business and other disciplines come together to discuss how we can shape the future of finance through technology and innovation. the theme of this year ’ s conference is “ advancing digitalisation for recovery, sustainability and inclusion ”. over the last two years, we have seen an accelerated pace of digital adoption across government, society and business unmatched in recent history. against this backdrop, this theme aims to tap into the enormous potential of digital technology to transform finance and help build a more inclusive, resilient and sustainable economy of the future. over the next five days, over a hundred speakers will discuss a broad range of issues ranging from environmental sustainability, the future of money, emerging technologies and the financial health of consumers. at myfintech week 2019 two years ago, i spoke about the dynamic shifts that the world was undergoing, and in turn, the opportunities and risks they presented to the financial industry. these included changes in the global economic order, climate change, rising income inequality and the advancement of technology. in the two years since, the severe global health and economic crisis faced by the world has brought these trends into even sharper focus. for example, the pandemic has highlighted and deepened long - standing vulnerabilities in malaysia and many places around the world. these include the fragile state of social protection systems, under - investments in health and infrastructure, and the need to improve our education system. as a result, vulnerable groups bore much of the economic, social and health cost of the pandemic and they continue to be at risk. this will affect economic and social resilience and thus not only our prospects to recover and bounce back from the pandemic, but also to deal with other existential challenges further ahead, like those in the environment and climate. on the bright side, the pandemic has demonstrated the power and potential of finance to address the pressing problems of our time. the financial