Bank Negara Malaysia (BNM) and ASEAN 5, a coalition comprising Indonesia, Philippines, Singapore, Thailand, and Malaysia, have embarked on a groundbreaking endeavor, Project Nexus, designed to streamline cross-border payments. This ambitious initiative signifies a crucial step towards cultivating a more robust and interconnected financial landscape within the region.
The assistant governor of BNM, Suhaimi Ali, unveiled that Project Nexus aspires to emulate the efficiency of domestic payment systems in cross-border transactions. While celebrating the initiation of bilateral cross-border payment linkages, Suhaimi pointed out the underlying issues plaguing current cross-border systems. Despite being in the right direction, bilateral connectivity still grapples with high costs and scalability concerns.
In his statement, Suhaimi elucidated BNM’s approach to tackle these challenges. Being an open economy, Malaysia engages with numerous trade partners, thereby managing a high volume of two-way flows. A comprehensive solution is sought to streamline these processes, ensuring smooth and efficient transactions.
In addition, the project addresses issues related to Know Your Customers (KYC), a crucial factor in minimizing illicit transactions and crime-related activities. This is particularly significant, considering the necessity of a secure and trusted platform for the users while they execute cross-border transactions.
These insights were shared during a panel discussion, ‘Digitalisation in Payments: Going Digital with Confidence in an Innovative Landscape.’ This discussion was part of BNM’s Sasana Symposium 2023, which also marked the launch of the Bilateral Cross-Border Payment Linkages, held at Sasana Kijang.
Despite the potential of Project Nexus, Suhaimi acknowledged the intricate nature of the undertaking. Critical considerations, including the governance arrangement for the entity responsible for managing and operating Nexus solutions, must be dealt with before actual implementation. Key concerns revolve around the right organizational structure, the vendor selection for running the platform, and the level of oversight that BNM needs to exercise.
Emphasizing the exploratory nature of the project, Suhaimi stated that the final outcome of this collaboration between ASEAN 5 and BNM is still undefined. However, the shared vision and concerted efforts of these nations bode well for the future of cross-border payment connectivity in the region.
In conclusion, the shared endeavor between BNM and ASEAN 5 represents a significant stride towards financial innovation. As Project Nexus unfolds, it promises to redefine the region’s financial landscape, setting new benchmarks for cross-border transactions and payment systems.
This news is based on the MalayMail website.