spotlight : developing a financial system for the future speech by dr. veerathai santiprabhob governor of the bank of thailand bloomberg asean business summit july 12, 2018, siam kempinski hotel, bangkok thailand distinguished guests, ladies and gentlemen, a very good morning to you all. it is my pleasure to be here today and take part in this event. first of all, i would like to thank bloomberg for organizing this exciting conference and for inviting me to share with you my thoughts on “ developing a financial system for the future. ” it is a timely and important topic as i am sure that most of us have been pondering how, in this age of disruptions, the financial system will develop to support economic growth while at the same time preserve financial stability. ladies and gentlemen, in this vuca world of high volatility, uncertainty, complexity, and ambiguity, thailand ’ s economy, like other emerging economies, is facing new challenges. monetary policy normalization in advanced economies, record - high debt levels in many parts of the world, stretched global asset valuation, and risks of an all - out trade war are posing immediate challenges to the stability of our financial systems. at the same time, technology disruption, aging society, and growing income inequality are also presenting structural challenges to many emerging economies, including thailand. against this backdrop, the bank of thailand has the duty not only to preserve and maintain economic and financial stability, but also to develop our financial system so that it can effectively unlock thailand ’ s economic potential, uplift productivity, and bring about more inclusive growth for the future. ladies and gentlemen, for the bank of thailand, maintaining economic and financial stability is a prerequisite for sustainable growth. thus far, the thai macroeconomic outlook remains favorable, with the economy expected to grow 4. 4 percent this year, the highest since 2012. additionally, 1 / 6 the thai economy has adequate buffers to withstand any immediate challenges, with ample international reserves, covering 3. 5 times our short - term external debts ; low dependency on external borrowing ; and current account surplus of around 8 – 9 percent of gdp1. moreover, our banking sector is robust, with high capital adequacy ratio and stable domestic funding. in the first quarter of 2018, the capital adequacy ratio of the banking system averaged 18 percent, among the highest in the region. to further safeguard financial stability, additional micro and macro - prudential measures were introduced, such as

the products and services are launched to the general public. technologies under reviewed include biometrics for electronic know - your - customers, machine learning for alternative credit scoring models, and blockchain applications for cross - border payments, supply chain financing, and document authentication. another way in which productivity is being enhanced is through improving regional financial connectivity. recent efforts by banks in the region to partner and adopt the thai qr code standard and blockchain applications for cross - border payments are examples of how financial innovations can help improve regional financial connectivity and facilitate smoother cross - border financial services. let me now turn to building immunity, which is a significant imperative for the future vuca world. with the vast amount of data and modern analytical tools available, resilience can be significantly improved. for example, banks can use transactional data to better forecast customers ’ credit demand and credit risks. regulatory agencies can analyze financial connectedness through network analysis to detect risk events and safeguard financial stability. the bank of thailand has employed a number of big data analytics to detect early signals of imbalances in the economy and respond pre - emptively should risks arise. additionally, in this increasingly digital environment, cyber resilience and cyber security must be a top priority and all of us must be prepared to prevent and respond effectively to cyber threats. adoption of modern technologies like biometrics and blockchains can help safeguard financial information and reduce the number and magnitude of fraudulent activities. in our part, last year the bank of thailand in collaboration with 15 thai banks and the electronic transactions development agency, set up the thailand banking sector computer emergency response team ( tb - cert ) as a platform for banks and regulators to share information on cyber incidents and build standards and capacity for it - personnel to handle new threats. furthermore, to ensure that our legal framework fits with the current digital environment and can keep up with new innovations, the bank of thailand had proposed the new payment systems act, which became effective in april of 2018. the act unifies previously fragmented payment laws and regulations and empowers the bank of thailand to oversee development of the thai payment systems and regulate new payment innovations and players. moreover, our supervisory guidelines on management of information technology risks have also 4 / 6 been updated to ensure that banks have appropriate governance structure in place and can swiftly respond in the event of cyber attacks. these developments will contribute to safer environment for both service providers and customers. on inclusivity, despite high level of financial access in