Tech advancement will re-define global economy: BNM Governor

Kuala Lumpur: The advancement of technology such as big data and artificial intelligence will re-define the global economy as it will accelerate innovation, re-ignite productivity growth and create more sophisticated demand. Bank Negara Malaysia (BNM) Governor Datuk Muhammad Ibrahim said the emergence of technology would accelerate the rise of high-value industries, ranging from advanced manufacturing to high-tech services, which was traditionally the forte of advanced economies.

"An integration of advanced manufacturing and services through the Internet of Things is currently the domain of advanced economies, accounting for all Top 20 companies in the technology field.

"As technological advancement continue to increase the affordability of high-end products, the expansion of consumer markets in emerging economies is further boosted by rising income and dynamism in advanced and emerging economies.

"These are indeed positive prospects for these economies," said Muhammad in his speech at the 31st Annual G30 International Banking Seminar on Sunday.

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The text of his speech was released here Monday.

The seminar was held on the sidelines of International Monetary Fund World Bank Annual Meetings in Washington DC (United States).

Muhammad said policymakers might need to develop new systems of regulations that are flexible enough to adapt and robust enough to manage the rapid technological advancements.

The immediate challenge for policymakers is to create an enabling environment to expedite the rise of the "new real economy", he added.

"From the emerging markets perspective, a critical aspect here is infrastructure readiness, but with a bias towards the new economy.

"Under the new scenario, virtual connectivity is no longer an aspiration, but an imperative," said Muhammad.

The Governor noted that financial intermediation was a good example of how disruptive technologies are increasingly re-defining the financial landscape.

"Currently, Fintech companies are prominent competitors to our banks and have triggered the re-evaluation of our financial system. 'Selfie pay' or Identity Check Mobile, is going 'live' in several European countries," he added.

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In a sense, he said fintech was developed in response to changing consumer behaviour and needs, namely the preference for speed, convenience, safety, and even unanimity.

"Therefore, policymakers need to ensure that regulations are flexible, yet proportionate to the risks of technological advancement. Policies must not stifle growth, but at the same time, not be at the expense of a resilient economy," Muhammad added. – Bernama

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