abdul rasheed ghaffour : opening remarks – forum on central bank foreign currency operations opening remarks by mr abdul rasheed ghaffour, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the ossp - bnm - seacen forum on central bank foreign currency operations, kuala lumpur, 6 august 2020. * * * it is my great pleasure to welcome all participants to the ossp - bnm - seacen forum on central bank foreign currency operations. my appreciation also goes out to ossp and seacen centre for organising this forum. although we have been looking forward to hosting all delegates and speakers in kuala lumpur, i am glad that technology has enabled us to come together regardless of this challenging time. i believe this forum is timely, given the myriad of issues associated with the current global landscape and the evolving environment for cross - border payment operations. the covid - 19 pandemic has caused widespread disruption within an inconceivably short period. we see disruptions in the lives and livelihoods of families and individuals ; in the way work is done and trade conducted ; and in our perspective of the world and our solutions to its problems. in at least one area we see the pandemic accelerate a growing trend both domestically and internationally – in digital trade and e - commerce. retail purchases have more than halved year - on - year, and this gap is quickly filled by the rapid growth of e - commerce. this digitalisation trend is likely to continue post - pandemic with new norms in day - to - day domestic as well as cross - border economic activities. this change is deeply felt by financial services providers which saw decreased domestic and cross - border transactions, including a projected fall of about 20 % in remittances in 2020. this pandemic has also compelled central banks to reconsider the robustness of their national payments systems, implement electronic cashless banking options, and safeguard against cyber threats. recent developments in cross - border payments landscape in recent years, the scale and importance of cross - border payments have grown in line with the growth of cross - border economic activities, with an estimated global transaction value of usd136 trillion in 2018. however, there is wide recognition that cross - border payment services remain inefficient, as compared to domestic payments. the common challenges facing crossborder payments can be attributed to cost and speed, lack of transparency, and limited access : reliance on multiple inter

##mediaries and correspondent banking with varying levels of operational efficiency, local requirements and cut - off times effectively lead to longer processing time and incur higher cost ; lack of transparency in the traceability and visibility of payment status, primarily due to lack of standardized payment status notification process ; and limited access of cross - border payment services, often caused by time zone differences and mismatch in operating hours of intermediaries. given these challenges, i believe that more innovative approaches are required to ensure that users can access safe and affordable cross - border payment channels. if banks are not providing these critical cross - border financial services, users may resort to less - or non - regulated channels. recently, new business models and arrangements have also emerged to address the prevailing 1 / 3 bis central bankers'speeches gaps in the cross - border payments space. these among others include the introduction of swift ’ s global payment initiative ( swiftgpi ), a pioneering attempt at linking payment infrastructure through the experimental usage of distributed ledger technology. these have the potential to improve efficiency, allowing faster, secure and transparent cross - border payments. at the asean level, efforts have been made to foster greater regional integration through linkages of the real - time retail payment infrastructures ( rt - rps ). the asean payments policy framework was established as a set of principles to facilitate the linkages of rt - rps. bilateral arrangements have also been established by several asean countries, including malaysia, to enhance the efficiency of cross - border payments. for instance, linking between singapore ’ s paynow and thailand ’ s promptpay to facilitate more seamless cross - border payment transactions in real - time, and similarly to extend the linkage to malaysia ’ s duitnow. once operationalised, this could enable cross - border payments between participating financial institutions to be virtually as seamless as domestic transactions. at the national level, bank negara malaysia ( bnm ) is directing its regulatory and supervisory resources towards safeguarding the safety and soundness of payment and remittance systems. we are stepping up efforts to reinforce public confidence and acceptance of e - payment and eremittance services, particularly among underserved segments. we are also working to futureproof the country ’ s payment infrastructure to meet evolving market needs, including migrating to the iso 20022. as a global messaging standard with richer data content, iso 20022 has the potential to drive greater payments efficiency, facilitate risk management and compliance with regulations as well as facilitate cross - border