Bank Negara Malaysia: Islamic Fintech Needs to Be a Boardroom Priority for Islamic Financeby Vincent Fong October 13, 2017
In his opening speech at the Islamic Fintech Forum Dialogue, Assistant Governor of Bank Negara Malaysia Mr. Marzunisham Omar called the Islamic Finance industry to take a more active role in fintech. According to the Assistant Governor, digital-banking consumers stand at an estimated 670 million in Asia alone and are expected to reach 1.7 billion by 2020.
“The case is compelling for Islamic finance to take on a more prominent role in the fintech ecosystem. The technology is ripe, with higher penetration of mobile and internet across markets.”he then added.
Marzunisham believes that with a diverse population and a growing middle class with high mobile and internet penetration Malaysia is an ideal test bed for developing and commercialising fintech solutions. In his views there are 3 key areas that the industry can benefit from by leveraging fintech:
- By leveraging on technology, industry players are able to create more value and customer focused services. This can be achieved through the delivery of customised solutions using for example biometric technologies, big data and analytics. Technologies such as Application Programme Interfaces (or APIs) could bring substantial benefits to customers, by making banking transactions simpler, quicker and more convenient.
- The adoption of technology can help Islamic finance reach out to market segments which would not otherwise be cost-effective. This means a great opportunity to serve untapped markets.
- In terms of processes, fintech can assist to improve the efficiency of back-end systems and operations, including through the use of predictive analytics to undertake real time risk management.
Marzunisham also added that the innovation agenda must be a boardroom priority, and Islamic financial institutions must be willing to allocate capital and resources to make this work. A further imperative to this is to inculcate and infuse a culture of innovation permeating throughout the organisation. He then ended his speech by stressing that Bank Negara Malaysia is supportive of the growth of fintech, including Islamic fintech.