Transformation is not only about addressing gaps; it is also about embracing and adapting to the future.
“We are in the midst of a generational evolution in core technology of the financial services sector much in the same way that generative artificial intelligence has fundamentally transformed how vast amounts of data are being used,” Prime Minister Dato’ Seri Anwar Ibrahim said at the Global Forum on Islamic Economics and Finance today (May 28).
These transformative innovations impact every aspect of economic activity, unlocking opportunities for new wealth creation, innovative solutions and generating new business models and revenue streams.
Achieving shariah compliance in arena of digital assets and smart contracts, without more, is not enough. “We must ensure that these technologies are developed and implemented in such a way as to empower our people, create greater unity and cohesiveness among our countries and give us greater freedom to build sustainable and resilient societies.”
In particular, innovation in the halal sector should be a prime focus to enhance the efficiency and transparency across the end-to-end supply chain.
As part of the continued and intensified efforts to enhance the investment ecosystem within Malaysia, first, the Retirement Fund or KWAP will invest through Dana Pemacu up to RM3 billion in Shariah compliant investments into supporting high growth domestic Malaysian companies and also catalyse the venture investment ecosystem;
Second, the SC will establish Malaysia’s first Social Exchange, a structured approach for participation of private capital in projects with positive social outcomes. This will benefit entities such as NGOs, social enterprises and State Islamic Religious Councils;
Third, a new dimension to Malaysia’s sukuk issuance under the Government of Malaysia via the wakalah ‘bil-khadamat’ structure will be introduced under the aim to finalise this Sukuk by 2025.
Fourth, innovating on sukuk structures, particularly to best meet the needs of climate and energy transition together with sustainability, building on past innovations such as SRI sukuk ihsan structures and linkages to waqf;
Fifth, Labuan International Business and Financial Centre (IBFC), via its Islamic Digital Asset Centre (IDAC) initiative, will actively raise and invest funds digitally based on blockchain technology, by initiating Islamic asset backed tokens and also an Islamic digital finance sandbox; and
Lastly, “I wish to commend the Islamic banking industry for their collective pledge of RM2.67 billion in secured financing facilities through the Halal Development Corporation’s Halal Integrated Platform to support the development of the halal industry in Malaysia,” he said.
Anwar explained considering that the global size of the Islamic trade finance today represents only less than 5 percent of the approximate total trade finance activities by OIC member countries, I call on OIC leaders to “up the ante” and facilitate cross-border access to beef up innovation, trade and investments.
Anwar encouraged local institutions to invest, innovate and integrate and think big to bring solutions that conventional finance has not yet even seen. “We must go where others fear to tread, and work across the global technology forum, as the saying goes: Fortes fortuna adiuvat – fortune favours the strong.
