ability to use financial services, which involves a certain level of financial literacy. the sarb has not been actively driving financial inclusion, but it has done some work on financial literacy. going forward, financial inclusion will be an ancillary objective for the prudential authority in terms of the financial sector regulation bill. derisking and deglobalisation contribute to global financial market fragmentation and could end the open and integrated structure we are all striving for. derisking can create financial exclusion. digital innovation can also be used to enhance global financial inclusion. a peer exchange between countries and regions on emerging policy practices for achieving digital financial inclusion could help those who lack access to financial services to better steer their implementation efforts. we believe that the global phenomenon of derisking through a decline in correspondent banking services requires priority and expedited action. this is one area where proportionality in the implementation of regulatory reforms is very appropriate. evidence reveals that the picture is especially bleak in the sub - sahara africa region where some countries are constrained since they are potentially unable to process payments across international borders. to date, a limited number of correspondent banking relationships with south african banks have been terminated but derisking has not had a significant impact on crossborder flows from a south african point of view. however, south african banks are being subjected to heightened scrutiny by foreign counterparts. markets in all jurisdictions must have access to a well - functioning global financial system in order to develop and prosper. this development goes straight against our goal of financial inclusion, which is a critical element for long - term global economic growth and for the elimination of poverty. in conclusion, the fact that the south african banking sector remains profitable and adequately capitalised is not a cause for complacency. the future performance of the domestic banking sector could be adversely affected by a number of factors, including constrained household - sector balance sheets, a weak domestic economic growth outlook, the subdued global growth outlook, the effects of the threat of a sovereign downgrade, and increasing regulatory compliance pressures. as a regulator, the sarb will remain vigilant in monitoring and, where possible and appropriate, mitigating the impact of the challenging environment in which domestic banks are operating. thank you.

) into our markets. an unintended consequence of the reforms to end ‘ too big to fail ’ is deglobalisation, resulting in g - sibs reducing their activity in some emerging market economies, which in turn has a potential impact on the stability of those financial systems and policy implications. another consequence of the regulatory reforms is that the regulated banking system is being scrutinised and regulated more strictly but no similar requirements or oversight are currently imposed on the shadow - banking environment. this is being discussed in the international meetings we attend. let me turn to digital innovations. innovative technologies are emerging as a potentially transformative force in financial markets. ‘ fintech ’ is used as a broad term for technically enabled financial innovation that results in new business models, applications and / or products with an associated material effect on financial markets, institutions and the provision of financial services. coping with opportunities and threats from innovation and technology remains a key area for banks and continues to pose challenges for supervisors. new technologies may be outpacing the ability of banks to put in place adequate controls and information technology ( it ) systems. furthermore, supervisors do not necessarily have sufficient expertise to assess a bank ’ s capability in this area. building capacity united kingdom to address it needs and cyber - risks is therefore becoming more urgent in the context of the growth of fintech. with greater reliance on technology comes a greater risk of cyberattacks. the risk of cyberattacks on the financial sector has dramatically increased in recent years. the financial sector stands out as a particularly attractive target for cyberattackers. cyberattackers ’ ambition and capacity to manipulate and gain direct access to financial data and services may lead not only to severe losses of trust in the global financial sector but also to high costs for market participants and customers. with today ’ s financial systems being globally interconnected and dependent on technical core infrastructures and services, cybersecurity incidents compromising such a core function could, by contagion across sectors and jurisdictions, even develop a capacity to undermine global financial stability. the sarb joined the alliance for financial inclusion ( afi ) during 2016. representatives from the sarb have attended afi global policy forums in the past two years. we are also a member of the afi african mobile phone initiative ( ampi ). by participating in international forums, it is clear that the solutions are probably in fintech, specifically mobile phones and regulatory sandboxes. financial inclusion covers aspects of affordability and the