Malaysia has the potential to become a world leader in Islamic financial technology (fintech), according to research agency BMI.
In a report from the Malay Mail Online, a statement released today from the Fitch Group unit, said:
In particular, we believe that Malaysia has the potential to be a leader in the Islamic fintech sphere due to its strong Islamic banking sector framework and expertise.
Accordingly, more developments from the country’s central bank, Bank Negara Malaysia, the government, and support from the country’s sound telecommunications will give Malaysia the boost it needs to become a leader in Islamic fintech, according to the report.
The research agency explained that Malaysia’s Islamic banking industry was worth $202 billion last year, whereas its Islamic loans more than doubled to 30.2 percent in the same time frame. This is compared to 7.8 percent 10 years ago. Due to its increased infrastructure, a tech-savvy population, in addition to high levels of broadband and mobile use and fast internet speeds, Malaysia is quickly becoming a contender for the Islamic fintech sector.
BMI noted that the country’s government investment to boost its digital economy, which contributed 17.8 percent to GDP in 2016, is predicted to increase to 20 percent in two years.
BMI said:
We thus believe that the Malaysian government’s ongoing push to develop the digital economy will provide tailwinds to the fintech sphere, with the government viewing fintech as a crucial part of the broader push.
It added that:
The signing of a Memorandum of Understanding (MoU) by MIMOS and the International Center for Education In Islamic Finance (INCEIF) to develop a blueprint for an Islamic finance-based investment technology is likely to lay the foundation for the development of Islamic fintech in Malaysia.
Malaysia’s central bank created the INCEIF in a bid to develop talent and expertise in Islamic finance. MIMOS is the country’s leading applied research and technology development facility.
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