’ s overall financial performance. this would allow for more - informed decision - making, thus contributing towards greater competitive advantage. moving forward, there will be increased expectation for more efficient use of internal resources. a more enhanced and integrated risk management framework, and the adoption of a risk adjusted performance management model would serve to further facilitate shareholders ’ activism and drive greater efficiency among banks. risk management however does not operate in a vacuum or in isolation and it should not be viewed merely for the purpose of regulatory compliance. priority should be given to ensure that the risk management framework is well - aligned and well - integrated with the strategic business directions of the banking institution. the benefits of refined risk quantification and more robust risk management should be translated into improvements in business operations and more effective functioning of the institutions. this will in turn ultimately bring benefits to the consumers and the economy at large. implementation challenges and considerations ladies and gentlemen, given the complexity of basel ii, the ability to comply appears to be the main concern within the banking community. this is truly a major undertaking with respect to the irb approaches or the internal rating based systems. the resources involved and data constraints are often cited as the two main challenges in implementing the irb approach, particularly for banks in the emerging markets. at this stage, data on default and credit migration for certain market segments is too limited to facilitate any meaningful analysis. it is therefore recognized that some lead time would be needed for banking institutions to produce a robust and meaningful validation of internal estimates of probabilities of default and loss given default. however, this does not mean that banks should wait until all the requisite data is in place. banks can initiate work to establish the framework for analytical functions. while the industry survey conducted by bank negara malaysia revealed a strong preference among malaysian banking institutions to adopt the irb approach, many had indicated the need to further strengthen their business case and undertake more comprehensive gap and impact analysis. this is indeed a critical process. of importance is to be able to extract the benefits out of the new accord. this would however, take time even for large and internationally active banking institutions that have made substantial enhancements over the years. standardised approach offers benefits with much less complexity while capital savings from the adoption of the standardized approach may be relatively lower than the irb approach, the benefits to be gained under the standardized approach are still considerable compared to the current accord. it includes the lower risk weights to be assigned to the mortgage portfolio, which would be reduced

marzunisham omar : opening remarks - international conference on financial crime and terrorism financing ( ifctf ) masterclass 2024 opening remarks by mr marzunisham omar, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the international conference on financial crime and terrorism financing ( ifctf ) masterclass 2024, kuala lumpur, 19 august 2024. * * * assalamu'alaikum warahamatullahi wabarakatuh and a very good morning. thank you for inviting me to speak today. it is an honour and a pleasure to see so many people in the room. i would like to express my sincere gratitude to both aicb and the compliance officers'networking group for their effort and leadership in organising this event. as mentioned by tan sri azman hashim earlier, this is the 14th iteration of the ifctf and the first time it is held in a masterclass format. these exchanges grow in importance each year, amid an environment of rapid changes across the financial landscape. the ifctf, in particular, has always been a platform for leading practitioners to have discussions on the frontiers of tackling financial crimes. the conference is especially timely, given that the national coordination committee to counter money laundering ( ncc ) has recently endorsed malaysia's national risk assessment ( nra ) 2023. it is also of significance as we are in the midst of preparing for the 5th round of the mutual evaluation exercise by the financial action task force. today's masterclass is an exercise in technical depth and exploration, which i hope all participants will find practical and useful. this morning, i would like to speak on three principles that we must embrace in strengthening our ability to address financial crimes : competence, commitment, and collaboration. part 1 : competence – strengthening skillsets ladies and gentlemen, the financial crime landscape is continuously evolving. a key transformative enabler is technology and its rapid advancement. for instance, pwc uk's 2023 report identifies that artificial intelligence ( ai ) will likely drive an increase in the volume and sophistication of fraud and scams. in malaysia today, we also observe these risks materialising as a new wave of scams which leverage technology, such as malware and ai - developed deepfakes, is deployed on social media to deceive victims. the nra 2023 further concluded an upward trend of virtual assets illicit activities in malaysia ( although still small in value ) and