Malaysian PM urges Islamic bankers for tech investment

By Riyaz ul Khaliq

ANKARA (AA) - Malaysia’s prime minister on Wednesday said that introduction of smart technology within the financial industry has “positively disrupted the industry”.

“Fintech [financial technology] has also penetrated the Islamic finance space despite it being considered in a very early stage,” Malaysia’s national news agency Bernama quoted Mahathir Mohamad as saying.

Addressing the 15th Kuala Lumpur Islamic Finance Forum 2019, he said that the Islamic bankers must “intensely invest” in technologies so as to transform their banking services and spread their products more effectively and efficiently.

However, Mahathir warned against the potential disruptions to traditional Islamic finance.

According to the Malaysia’s premier, the “evolutionary pace” in the Islamic banking and finance industry has intensified in recent years.

“… the concepts of Islamic finance have been incorporated into many financial products to meet the changing needs of consumers, businesses and investors,” he said.

“Overall, fintech in the Islamic finance space positively contributes to the evolution of the Islamic finance products and services offering.”

Mahathir told the forum that initiatives to promote more awareness and education among Muslims and non-Muslims have also been intensified.

Referring to crowdfunding and peer-to-peer (P2P) financing options, he said that these do not qualify for financing from traditional Islamic financial institutions.

Mahathir added that elimination of credit intermediaries “results in lower prices and/or higher potential returns”.

“Malaysia has spearheaded a number of innovative developments in Islamic finance with the aim to spur the vibrancy of the industry,” Mahathir said referring to issuance of the first Sustainable and Responsible Investment Sukuk and Green Sukuk, as well as the launch of the Investment Account Platform.

He said that Islamic finance can be a “catalyst” for the growth of green developments across the world.

“It will require continued collaboration with global and local stakeholders to converge in standards and reporting, as well as to spur innovation, to reduce barriers and cost for issuers and increase transparency and awareness for investors,” Mahathir added.