KUALA LUMPUR: Every year globally, a staggering amount of US$2.6 trillion is stolen through corruption, which is eight times larger than the Malaysian economy, says Bank Negara Governor Datuk Nor Shamsiah Yunus.
She said on Tuesday the US$2.6 trillion was an estimate provided by the United Nations Office of Drugs and Crime which focuses on terrorism financing, corruption and money laundering.
“The money lost through financial crimes is a devastating opportunity cost, draining the resources that could have been used to permanently uplift the lives of billions in this world,” she said in her keynote speech at the 10th
International Conference on Financial Crime and Terrorism Financing.
Shamsiah estimated it would take US$5 trillion to US$7 trillion to meet all the UN Sustainable Development Goals that aims to improve the lives of the poor, improve governance and address inequality.
“This represents two to three years' worth of money lost to corruption,” she said.
She also cautioned about the risks from the usage of greater technology. The rapid advancement in technology, while presenting wonderful opportunities for economic development, also creates attendant risks and fresh set of challenges.
“As such, it is important for the industry to be aware of the trade-offs that come with adoption of these technologies. In pushing the boundaries of innovation, the industry needs to understand the risks that they pose,” she said.
Shamsiah also pointed out the rise of mobile banking, e-payments and virtual assets.
In Malaysia, mobile banking transactions have multiplied greatly, from around 500 million transactions in 2016 to almost 1.3 trillion transactions in August this year.
The ubiquity of mobile internet and increasing dependency on our smartphones is expected to increase the importance of this medium.
She also said another area of growth comes from virtual assets. Between the end of 2016 to date, market capitalisation of virtual assets have grown by an extraordinary rate of over 1000% from around US$20bil to around US$200bil.
“Another area of growth comes from virtual assets. Between the end of 2016 to date, market capitalisation of virtual assets have grown by an extraordinary rate of over 1000% from around US$20bil to around US$200bil.
“While the technologies behind virtual assets may present great potential to revolutionise the way we conduct finance, the risks associated with virtual assets is an area that deserves much scrutiny.
“Features that may allow anonymous or pseudonymous transactions and easier cross-border transfers of values carry money laundering and terrorism financing risks that need to be addressed. The fact that the reason for many virtual currencies is to skirt the formal financial system adds further to the reservations of many,” she said.