KUALA LUMPUR, April 23 — Leading countries in the Islamic finance space within the Asean region, such as Malaysia and Indonesia, should collaborate in the banking and takaful sectors as the prospects of both Islamic finance and financial technology (fintech) in the region are seen to be brighter, said Bank Negara Malaysia (BNM) deputy governor Adnan Zaylani.

While maintaining different jurisdictions and frameworks, he viewed that there is always scope for harmonisation and standardisation within the financial services sector to achieve greater fluidity.

“Financial services across countries, especially product acceptance across different countries, would be more fluid (through harmonisation and standardisation). To achieve this at the global level of acceptance could be challenging, but we could start in Asean first,” he said during the panel session titled “SEA’s Next Big Fintech Export: Islamic Finance” at the KL20 Summit 2024 here, today.

In this regard, Adnan noted that the Malaysian government would likely put forward ways to strengthen its financial offerings, including Islamic fintech as one of the agendas during the Asean chairmanship next year.

“Therefore, I think we can come together and strengthen Islamic finance in Asean as a whole in terms of its offering as there are already various working groups that are looking on the regulatory front,” he said.

Elaborating further, he said Malaysia has an overall framework in which existing banks could collaborate in Islamic fintech as the segment has a lot of opportunities to complement the financial sector.

In 2022, BNM awarded five successful applicants with digital bank licences as approved by the Finance Ministry, including two applicants for Islamic digital banks.

“The digital banks have to be all about digitalisation and we allow very minimal non-digital operations as the expectation was to be primarily digital. Hence, Islamic fintech has a lot to offer to complement the operations as well as the digital banks,” Adnan said.

Moreover, he also pointed out that the range of products for Islamic financial services today covers almost anything that could be covered by conventional services, not only in meeting the needs but also in making differences in terms of enhancing financial inclusion and products in the space of social finance, as well as the environmental, social, and governance. — Bernama