BUSINESS

LABUAN IBFC TO RIDE ON DIGITAL TRANSFORMATION IN ISLAMIC FINANCE

21/10/2021 05:14 PM

By Jailani Hasan

LABUAN, Oct 21 -- Labuan International Business and Financial Centre (Labuan IBFC) is rapidly revolutionising its digital offerings with its regulator adopting a facilitative approach to enable innovative digital businesses to take root there.

Labuan Financial Services Authority (Labuan FSA) director-general Nik Mohamed Din Nik Musa said Labuan IBFC is envisioned to become a digital-based gateway with Islamic finance capabilities for all global investors and players as the future of Islamic finance looks ever-promising. 

“The digital transformation in Islamic finance positively contributes to the evolution and innovation of Islamic financial products and services in a rapid tone.

“As we continue to strengthen Islamic finance footing in the region, our focus now is to realise the full potential of digital opportunities by offering an all-inclusive solution of a Shariah-based digital regime leveraging on Islamic finance and social-based finance instruments,” he said during his virtual welcome address at the third Connecting Digital Ecosystems Asia (CoDE Asia 2021) conference today.

Nik Mohamed Din said this could further expand Islamic finance development across emerging markets while building connectivity with wider Islamic finance industry.

“As digitisation for the financial sector evolves, regulatory bodies globally will be posed with the balancing act of determining appropriate ways of regulating these changes vis-a-vis promoting market breakthrough and innovations. 

“Ensuring stability will remain of paramount importance as financial transactions become more seamless, intangible and borderless; therefore, Labuan FSA is committed to adopting a facilitative approach by developing ‘fit-for-purpose’ requirements to cater for emerging business technologies,” Nik Mohamed Din said.

He noted that  this year, Labuan FSA launched two key policy documents – the Guiding Principles on Business Continuity Management to enhance the Labuan financial institutions’ operational resilience; as well as a digital governance and cyber resilience framework which aims to protect DFS providers from cyber threats.

Meanwhile, Labuan IBFC Inc chief executive officer Farah Jaafar said as at September 2021, the number of digital financial services (DFS) providers that have been approved to operate in the Labuan IBFC digital space has grown to 85 licensees, with 25 intermediaries licensed as of last month. 

She said the key licensees include two digital banks, one insurtech (insurance technology) company, one digital securities exchange, 16 payment systems providers, 18 credit token issuers and 33 money brokers (digital currency exchanges). 

Farah said of the total number of DFS providers in Labuan IBFC, the majority were licensed to provide digital currency trading platform, issuance of digital token and e-payment system or e-wallet.

She disclosed having celebrated its 30th year of establishment in 2020, Labuan IBFC is now home to more than 5,000 active entities which include 70 banks, 232 insurance and insurance-related entities, 65 trust companies and other business sectors, with an ecosystem creating a robust environment promoting the growth of digital business.

This third edition (virtual) of Connecting Digital Ecosystems Asia conference, themed “Future Forward: Next Gen Digital Ecosystems”, was attended by more than 400 regional delegates and featured a line-up of industry players and subject matter experts, discussing the current and emerging developments in the digital financial industry.

In conjunction with the event, a joint white paper titled “Curating a Regulated Digital Ecosystem” was launched. 

The paper, produced with Deloitte, examines the challenges faced by regulators in an ever-evolving digital landscape, and how jurisdictions can support and facilitate a well-balanced regulatory and business conducive environment.

-- BERNAMA

 

 

 


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