the technicality of approaches and methodology underlying the new accord. moreover, it is critical to achieve in - depth knowledge of risk management and the impact of such developments on business model of the financial institution. therefore the task ahead is very challenging, far beyond just acquiring software that would crank out numbers. on the infrastructure aspect, data is a critical issue. the data that could be collected at this time would be biased since the economic conditions are not normal. nevertheless, we still need to start building up the database. in many countries, such a challenge is tackled with the cooperation between the financial institutions and the regulators. for example, in a number of countries, developed countries in fact, regulators plays crucial coordination role in supporting the built - up of the database system, in educating and knowledge transfer. the bank of thailand will be more than happy to play this role. turning now to the second major challenge for the financial institutions, the intensified domestic and foreign competition brought about by liberalization, globalization and technology. banks also experience competition from non - bank financial institutions, with the traditional financial firms and their business line becoming blurred by conventional wisdom. we also see such strategy as m & a across similar financial firms, or between financial firms and non - financial firms such as it providers. in the meantime, outsourcing and franchising of technology, most notably through the venders for risk management software or solution have also exploded as a phenomenon. while the picture is still evolving so fast and future landscape hard to forecast, financial institutions find themselves stepping more and more into a less familiar territory, and tremendous efforts must be put in to survive the intense competition and dynamism. at the same time, attention must be diverted to deal with preparation for the new accord. the third major challenge is that financial institutions need to further strengthen their financial standing in the recovery path after the crisis. preparing for the new accord means cost impact from building capacity in terms of people, know - how, it, data, and business model re - engineering. therefore, strong leadership is crucial to propel the financial institution through the short - term difficulties, while at the same time steering the institution with long - term vision and strategy to ensure that the financial institution survives the challenge and complies with international best practices. as for the regulators, our task at the bank of thailand is no less challenging. in addition to the need to build up our own in - depth understanding and capacity to implement the new accord, we are also

less default by borrowers and appropriate pricing of credit. our partnership with the kenya bankers association in this project has yielded considerable results. two credit reference bureaus have been licensed and there is active engagement with all commercial banks and the deposit protection fund in exchange of information on non - performing loans. a total of 1, 306, 439 and 6, 041 credit reports have so far been accessed by banks and bank customers respectively from the two licensed credit reference bureaus. this translates to a monthly average of 76, 849 and 355 credit reports for banks and bis central bankers ’ speeches bank customers respectively. this uptake of credit referencing is quite encouraging and this will be a pillar of growth in the kenyan financial sector. having said that, ladies and gentlemen, we are alive to the fact that the current cis mechanism has a number of challenges. these challenges may be categorised into four broad areas. first and most critical is that the current system is limited to commercial banks and, very soon, to deposit taking microfinance institutions. if this is allowed to continue, various credit providers may create “ silo ” databases, often referred to as “ segmented ” information sharing. credit reports generated by such systems give an incomplete and often misleading picture. “ comprehensive ” systems, by contrast, allow a more complete credit profile of a consumer to be drawn. for small businesses, it also includes trade credit data and leasing arrangements. these non - financial services, such as utility and telephone services, are usually more common than are financial payment data, particularly in less developed markets, where, for example, the number of cell phone users may far outstrip the number of credit card users. the use of non - financial data in credit files offers the promise of a diversified information capital that will facilitate extension of reasonably - priced credit to those who have not previously accessed formal credit. the second challenge is the need to move towards achieving full file reporting by participating institutions. full file reporting, that is, sharing of both negative and positive information on customers is important as it enables risk based pricing through credit scoring. it is important to have full file reporting to facilitate credit scoring mechanism and enhance the information capital. further, full file comprehensive credit reporting systems are more successful at expanding access to credit, improving loan performance and preventing over indebtedness. we therefore appeal to the credit providers on the need to consider sharing full file information, in order for our market to enjoy the full benefits of the cis mechanism. third