and challenges. the most prominent risk is the risk of disintermediation if the issuance of digital currency results in deposits flowing from commercial banks to central bank accounts with adverse implications for lending activity and consequently, real economy. in particular, in case of financial systems distress, it can intensify the run risk and amplify the shocks. the need to balance between integrity and the privacy of money also comes to the fore. elevated cyber risk is also inevitable, given the technologies deployed for digital currencies. all this indicates that central banks have " fulltime job " in devising the most appropriate cbdc design that will minimize these risks and maximize benefits. our national efforts more or less resemble global trends and initiatives. as a central bank, we strive towards encouraging innovation in finance, as visible through the establishment of our innovation hub. we map the ecosystem, via fintech surveys to better understand its current state and act towards eliminating barriers, while containing risks. the recently adopted fintech strategy is providing a platform for coordinated and streamlined efforts by all stakeholders in the regulatory area. a recent central banking survey revealed that only 54 % of surveyed central banks do have a strategy that underscores our visionary approach towards the fintech area. we have already created a stimulating legislative background, with the new law on payment services and payment systems that entered into force this year, furthermore, we have recently embarked on exploring the possibilities for introduction of digital denar. last but not least, propelling efficient and harmonized cross border payments is key to support and stimulate cross border integration. this is particularly the case for small - size economies, such as ours, with growth model based on international trade and finance. our regional efforts to comply with european standards, fulfill sepa requirements, and integrate into the target instant payment system - tips of euro system is a step in a right direction. looking forward, it is always challenging to foresee the future, but it is highly probable that the pace of financial transformation is set to continue, if not to accelerate. few years ago, a study denoted ten avenues that will shape the future of payments, and some of them are already taking place. issuance of digital currencies, more active role of regulators, data – based payments value chains, a consensus on data privacy, biometrical id, and strong collaboration between new entrants and traditional players. these are now all already existing dimensions of the finance matrix. i would add that esg concerns are

undertaken by bank negara malaysia to strategically support financial sectors ’ governance and self - regulation in preventing the risks related to financial crime. firstly, the risks and its importance in setting the context : secondly, the governance and risk culture ; and thirdly, self - regulation. risks and its importance in setting the context in principle, money laundering and terrorism financing risks are no different than other type of risks facing businesses. key in managing the risks is to identify the sources and assess the extent of its impact to the business. recognising this importance, the financial action task force or better known as fatf, has provided a clear statement on this under the very first recommendation in its revised international standards on combating money laundering and the financing of terrorism and proliferation. countries, financial institutions and designated non - financial businesses and professions are required to clearly identify, assess, bis central bankers ’ speeches and understand risks. understanding of those risks will then set the context for taking actions and allow better allocation of resources to effectively manage and mitigate those risks. to respond to this development, bank negara malaysia has issued revised policies on anti money laundering and counter financing of terrorism ( aml / cft ) in september 2013. the integral component of the revised aml / cft policies is the introduction of an obligation for reporting institutions to adopt a risk - based approach in identifying, assessing, and understanding the money laundering and terrorism financing risks of respective reporting institutions. the risk - based approach is an over - arching requirement that runs through all the other elements in the aml / cft policies. proper assessment and understanding of the risks will allow reporting institutions to tailor an appropriate risk controls and establish proper policies and procedures to mitigate the risks. the revised policies also focused on refining customer due diligence ( cdd ) requirements to reflect the varied risk levels. the revised policies also aimed to address implementation issues faced by both the reporting institutions and the supervisors as well as to incorporate fatf requirements under the revised standards. to ensure consistency of aml / cft policies across the sectors, the revision was carried out jointly with other financial supervisors such as the labuan financial services authority and the securities commission. extensive consultations and engagements were undertaken with the industry players both during pre and post issuance of the policies. the consultations provided a broad range of opinions and support. whilst majority of responses were supporting a risk - based approach, concerns were also raised on the cost and burden of compliance. bank negara malaysia recognise