ISLAMIC FINTECH NEEDS CONDUCIVE ECOSYSTEM -- MAYBANK CHAIRMAN

By Nurul Jannah Kamaruddin

KUALA LUMPUR, March 21 (Bernama) -- Islamic fintech needs a conducive ecosystem to achieve exponential growth potential, said Maybank chairman Tan Sri Zamzamzairani Mohd Isa. 

He said that although still in its early stages of progress, fintech has demonstrated a great deal of innovation in financial services and contributed to the growth and improvement in many aspects of businesses including Islamic finance.

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“The current pandemic the world is facing has indeed been a major disruptor in all aspects of our lives, especially the way we run our businesses.

“(However) We have seen digitalisation emerging as the catalyst of sustainable transformations,” he said during Maybank Islamic Bhd’s virtual Global Connect Forum.

Zamzamzairani said a research conducted by Maybank Islamic and IslamicMarkets.com in February 2022 amongst leading Islamic finance professionals revealed that nearly 90 per cent of respondents indicated that fintech has already accelerated the digitisation of Islamic finance products and made them more accessible globally while redefining client experiences.

He said the advancement and enhancement of Islamic fintech has cleared the way for the production of Shariah-compliant products and services.

“Financial institutions are now presented with more opportunities to strengthen their infrastructure and product offerings to their customers.

“I believe the potential for Islamic fintech is immense as it provides huge opportunities for players to build the same for consumers that are currently unbanked, uninvested and uninsured,” he said.

Zamzamzairani added that fintech could provide integrated solutions to support the Islamic principle of charitable contribution, whether it is zakat, waqf, or sadaqah, where the innovative integration of these Islamic redistributive mechanisms becoming a significant enabler for Islamic social finance.

He also noted that Islamic finance is one of the fastest-growing sectors in the global financial industry and experiencing an unprecedented pace of growth and development in the past 30 years.

He said the Islamic finance sector is currently growing at a rate of 15 per cent to 25 per cent per year, with Islamic financial institutions managing assets worth over US$2.2 trillion (US$1=RM4.19) globally.

According to global data provider Refinitiv, the Islamic finance industry is projected to reach US$4.94 trillion in 2025.

These figures, he said, are indeed impressive and with such high expectations of the industry’s continued growth and success, it also brings the inevitable question: where do they stand in relation to creating a progressive, inclusive and sustainable impact on the served world communities?

Zamzamzairani believes the answer lies in Islamic finance as its core principle of channeling funding to the real economy by promoting risk-sharing, avoiding excessive speculations, and limiting debt to the value of assets.

He added that the halal market is not only thriving in Muslim-majority countries but also in major non-Muslim majority economies like China, Japan, the United States, and the United Kingdom.

He explained that excluding Islamic finance, the global halal market is currently the fastest-growing market in the world with an estimated annual worth of around US$2.3 trillion.

“Such expansion of the industry is due to the global halal market of 2.18 billion Muslims, but it is no longer confined to just Muslims.

“Therefore, in the virtue of halal being a truly global industry, this ever-increasing globalisation represents an exciting opportunity for the Islamic economy to grow more prominently within the bigger global economy,” he said.

-- BERNAMA