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Fintech is fast gaining traction in the financial services industry, as both start-ups and traditional companies proactively incorporate methods to stay in the lead. In Malaysia, the national bank itself supports the role of fintech in Malaysia’s overall finance industry. According to Bank Negara Malaysia assistant governor Marzunisham Omar, the next growth phase of Islamic finance requires the industry to ride the fintech wave. AmInvestment Bank CEO Raja Teh Maimunah Raja Abdul Aziz said Islamic banks do not have an option not to adopt fintech. The only way that Islamic banks or Islamic funds or Islamic crowdfunding can reach out is to adopt mobile technology. She revealed that AmInvestment Bank is currently experimenting with its clients to use Distributed ledger technology (DLT) for the issuances of bank guarantee.

Islamic fintech finance in Asia is anticipated to be bigger than originally thought. According to the secretary-general of the Islamic Financial Services Board (IFSB), Zahid ur Rehman Khokher, Islamic finance has the potential to expand further into the Asian market. He noted that the IFSB has been closely monitoring global developments in fintech. Yet, he feels there is a shortage of staff with the appropriate skills. Earlier this month, it was reported that Malaysia was the idea test bed for developing fintech solutions. According to Marzunisham Omar, assistant governor at the Bank Negara Malaysia, even though Islamic finance is still growing within the country, now is the time for the sector to embrace the fintech wave.

Malaysia’s central bank said that the country is the ideal test bed for developing financial technology (fintech) solutions. Marzunisham Omar, assistant governor at Bank Negara Malaysia, explained that the growth of the sector has provided innovative opportunities within the financial industry. While the country’s central bank is keen to push a fintech agenda, its position on digital currencies is not as clear. Bank Negara governor Muhammad bin Ibrahim said that a blanket ban on cryptocurrencies was not out of the question. The bank is currently developing guidelines for them. Either way, by the end of the year, the bank is expected to reveal its position on the cryptocurrency market.

#Malaysia is second only to Saudi Arabia in terms of Islamic banking in the world. Of the US$71 billion Syariah-compliant asset funds managed, 33% are in Malaysia. The country’s central bank, Bank Negara Malaysia (BNM) continues to raise awareness of Malaysia as an international Islamic financial centre. According to BNM assistant governor Marzunisham Omar, the next area of focus is quality growth. The 16 Islamic banks and 11 takaful operators are seeing value-returns by embarking on initiatives through Value-Based Intermediation (VBI). VBI is a business strategy by Islamic financial institutions, driven by a desire to create value rather than focus on short-term objectives. VBI is a business strategy of the institution to drive growth and sustain growth. It is a collaborative effort by the central bank together with Islamic banking institutions. Today nine Islamic banks are already involved and the central bank is working to develop a value-based scorecard to measure the success of banking institutions.