1 August 2017
Welcome Remarks by Norbert Mumba, AFI Deputy Executive Director at the AFI-BNM Cybersecurity Policy Forum
Honorable Assistant Governor of Bank Negara Malaysia (BNM), Mr. Adhari Belal Din,
Esteemed members of AFI,
Colleagues from BNM,
Distinguished guests & experts in cybersecurity,
It is my privilege to welcome you (130 participants from more than 40 countries, including 67 from 37 AFI member institutions) to this policy forum: “Cybersecurity: Safeguarding the future for Innovative Financial Inclusion”. The presence of so many participants from so many countries demonstrates the increasing power of global knowledge exchange.
This is AFI’s first global peer-learning forum focusing on the linkage between cybersecurity and financial inclusion, which we are honoured to co-host in partnership with Bank Negara Malaysia. The event is designed to foster dialogue between financial policymakers and private sector innovators to understand how cybersecurity connects to financial inclusion, and how we may together work towards solutions that provide safeguards for the most vulnerable users of digital financial services.
Cybersecurity: Global developments and relevance to Financial Regulators
The topic of cybersecurity is increasingly being recognized globally as being of high relevance to the core mandate of central banks and financial policymakers to preserve financial system stability. Thus in 2016 the G7 agreed and published ‘Fundamental Elements of Cybersecurity for the Financial Sector’ and in the same year the Committee on Payments and Market Infrastructure (CPMI) and the International Organization of Securities Commissions (IOSCO) produced “Guidance on Cyber Resilience for Financial Markets”. More recently, the Financial Stability Board singled out cybersecurity as a potential risk to financial stability and that it demands financial policymakers’ immediate attention.
Recent global events have further highlighted the need for policymakers to ensure that their regulatory frameworks take into account cyber risks so that the financial sector is resilient to cyberattacks. The recent WannaCry ransomware attack (in May 2017) and the Petya ransomware attack (in June 2017) are two examples of such incidences. With growing disruption to services and adverse news coverage, it is important to ensure that policy responses are based on fact and evidence, and not on fear and misunderstanding.
Such attacks bring to the fore the impeccable old adage of “prevention is better than cure”. Therefore, cybersecurity needs to addressed proactively, as part of the design of the regulatory framework and not only in the aftermath of attacks. As regulators and key players in the financial system you must ensure the safety and security of financial markets infrastructure, as this is essential to promoting the public policy objectives of financial stability and economic growth. This requires that all stakeholders in the payments ecosystem effectively address potential risks related to cyber threats and foster consumer trust and preference for electronic payments over cash.
The Interlinkages of Cybersecurity and financial inclusion
Cybersecurity is highly relevant not only to financial stability but also to financial inclusion as in many parts of the world, financial inclusion strategies are driven by the embrace of innovative digital technologies. The commitment to promote financial inclusion through innovative technologies is evident across the AFI network. To date, there are 47 specific commitments under the Maya Declaration by the members to promote financial inclusion through digital financial services (DFS).
New innovations in DFS are creating opportunities to dramatically increase access to, and usage of, quality financial services. At the same time, a notable growth in cybercrime attacks globally presents significant new risks which, without adequate mitigation strategies, will leave financial infrastructure, and individual consumers, vulnerable to attack with potentially severe consequences. In the wake of recently documented large-scale hacks and data breaches, it is important for companies to uphold high standards required to keep their data safe and build consumer trust in digital payments.
Low financial and technological literacy among some consumers who are new to digital financial services adds a further dimension to the challenge and could translate to additional vulnerabilities to cyber threats. Proactive defence and response against cyber risks by financial policymakers/regulators will be crucial to safeguard the future of innovative financial inclusion.
This one-and-a-half day Forum has been developed in recognition of the linkages between cybersecurity and financial inclusion and on the basis of strong AFI member demand. Cyber Security was highlighted in a recent AFI member survey as being one of three top areas within the realm of new financial technologies where members would like to learn more.
A number of sessions will also highlight cybersecurity policy & initiative by Malaysian government agencies as well as Bank Negara Malaysia. The main goal of the Forum is help policymakers/regulators become more risk-aware but not risk-averse of cybersecurity risk. It is important to ensure that cybersecurity rules/regulations in place rein in cyber risks but at the same time do not stifle innovation to promote financial inclusion.
The outcome of the Forum will help AFI develop further practical peer learning activities in the area of cybersecurity.
Finally, I would like to thank Bank Negara Malaysia, our co-host, for developing the program and providing these exceptional facilities at Sasana Kijang. AFI and BNM have been running training and capacity building events in partnership since 2013, and with AFI headquartered in KL since 2015 we now have even more opportunities to collaborate together to advance the cause of financial inclusion.
I thank you again for your participation and wish you a fruitful learning.
© Alliance for Financial Inclusion 2009-2024
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