Islamic fintech holds potential to provide inclusive, sustainable financial solutions

KUALA LUMPUR – Developing Islamic financial technology (fintech) is more important now, particularly in catering to the financial needs of small and medium enterprises (SMEs) and the B40 community with the adversity created by the pandemic.

International Centre for Education in Islamic Finance (INCEIF) president and chief executive officer Prof Dr Mohd Azmi Omar said COVID-19 impacted the growth of Islamic finance, as it went down to single-digit growth in 2020 compared with double-digit growth from 2012 until 2019, reported Bernama.

He said Islamic fintech holds the potential to provide inclusive and sustainable financial solutions that could uniquely cater to the financial needs of all segments of society.

“Islamic Fintech in Malaysia is growing rather well with 3% in 2019 and up to 2020, we have slightly more than 6%, and we hope that Malaysia can continue to be the hub for Islamic Fintech globally,” he said at the 8th Malaysian Financial Planning Council e-conference On Shariah Wealth Management and Financial Planning yesterday.

He said Malaysia’s robust regulatory environment, comprehensive Fintech landscape, supportive Islamic finance community and the government’s commitment to champion the Islamic economy could pave the way for the country to be a global Islamic fintech hub.

He added that with such vision and advantages, Islamic fintech startups in Malaysia could secure long-term growth prospects by scaling up to serve the global Islamic economy, consisting of almost 1.8 billion people around the world.

Meanwhile, Securities Commission Malaysia chairman Datuk Syed Zaid Albar in his speech said the ongoing pandemic has disrupted the way people interact socially, as well as in business transactions.

He said the capital market was not an exception with notable shifts in investor behaviour and adoption of digital tools and services.

“Over the past year, as most of you are aware, global stock markets witnessed a resurgence in retail participation.

“Similarly in Malaysia, we also see a marked increase in retail interest not just in stocks and shares but in digital offerings as well,” he said.

He said this included equity crowdfunding, peer-to-peer financing, digital assets and digital investment management services.

He said digital offerings had made inroads as technology provided a convenient and cost-effective solution for investors and issuers alike.

“Complemented by a growing number of alternative platform and providers, this ease of access via digital tools and mobile devices has attracted the young, as well as the young at heart,” he said.

Therefore, he added, it was also important to embark on the digital transformation journey to achieve greater client servicing and efficiency.