Islamic fintech stakeholders have determined nine strategic priority areas that will further reinforce and enhance financial inclusion in Malaysia.
All nine strategic priority areas were drafted based on the input given by the decision-makers and leaders from the Islamic finance industry, including the government, regulators and fintech community, during the ‘Islamic Fintech Dialogue 2020: Driving Financial Inclusion through Islamic Fintech’. The discussion was held virtually in May 2020 and focused on how Islamic fintech can drive financial inclusion.
The key findings from the dialogue session are in line with the government’s Shared Prosperity Vision 2030, an initiative that aims to leverage on the country’s Islamic finance global leadership and digital economy aspiration to create sustainable growth while ensuring fair and equitable market access for all Malaysians.
From the nine identified strategic priority areas, the most critical are the setting-up of a national Islamic fintech taskforce; the renewed focus of enhancing digital and Islamic financial literacy, especially within B40 segment; developing smart partnerships among ecosystem players; and ensuring there is greater readiness among Islamic institutions to embrace digitalization. Instrumental to the success of these initiatives are the collaborations between industry participants — start-ups, financial institutions, religious bodies, as well as the government and regulators.
Organized by REDmoney Group, the publisher of IFN, and in collaboration with the Malaysia Digital Economy Corporation (MDEC), this dialogue session featured Deputy Finance Minister II Mohd Shahar Abdullah.
“I strongly believe that Malaysia can develop an ideal ecosystem to support the development of Islamic fintech and champion the Islamic fintech agenda, especially in the ASEAN region. However, in order to make this happen, it will depend on the collaborative efforts of the financial regulators, the delivery system, the industry players and the supporting professionals,” said Mohd Shahar in his keynote address during the dialogue session.
As one of the most advanced Islamic finance markets in the world that has a favorable digital-ready demographic, Malaysia has a competitive advantage to develop a compelling Islamic fintech proposition.
The country is particularly well placed to optimize Shariah philanthropic instruments, such as Zakat and Waqf, through digital means. In doing so, it can elevate the standard of living of all Malaysians since its Islamic social finance community is highly robust and has strong government support to further grow the digital economy.
“With the pandemic that is still ongoing, businesses, the public sector and the general populace are now aware and understand how important it is to take the digital leap. While much larger businesses and corporates can navigate and pivot quickly to digitalize, most small businesses are still struggling to survive. In fact, financial inclusion is now one of the primary factors that will sustain and drive forward the economy. While it provides digital cost savings among the financially excluded and underserved populations, digital financial services can also introduce a wide range of solutions that are suited to their needs. More critical is how these fintech solutions will be delivered in a responsible and more cost-effective manner to ensure they are truly affordable to customers and remain sustainable for providers. The end-goal is to ensure the B40s and MSMEs will be empowered via Islamic fintech and financial inclusion,” said Surina Shukri, CEO of MDEC.
Findings from the Dialogue are presented in the Islamic Fintech & Digital Financial Inclusion Report which can be accessed here.