@Halal May/Jun 2020 - Page 12

12 Cover Story @Halal | may-june. 2020 Championing Islamic fintech agenda The Malaysia Digital Economy Corporation (MDEC) plans to establish a leading body at a national level to champion the Islamic fintech agenda mDeC InTenDS to position Malaysia as an early-stage Islamic fintech start-up hub to attract local and foreign start-ups to anchor regional operations in the country and use Malaysia as a gateway to Asean. “We want to build an inclusive fintech ecosystem. It will comprise Islamic fintech start-ups, corporates, non-governmental organisations (NGOs), Shariah banks, Islamic asset managers and practitioners in the Zakat, Waqf and Sadaqah space,” Chairman Datuk Dr Rais Hussin Mohamed Ariff said. “We also want to develop a local talent base and improve the awareness and understanding of Islamic fintech among stakeholders, especially investors and corporates.” MDEC also wants to encourage B2B collaboration between Islamic banks to conduct research and development and support the Islamic fintech ecosystem. It will establish an effective mechanism to address regulatory grey areas and utilise existing tools or establish new ones to facilitate private investments into Islamic fintech. On whether there was a need to rethink Malaysia’s approach to Islamic Fintech, Rais said the wide variety of Islamic FinTech and its diversified business plans make it challenging for regulators to build up a one-size-fits-all regulatory framework. The government thus needs to think of providing supportive regulations for the Islamic fintech sector. “Not too loose or too strict. The tooloose regulation will result in problems such as negligence of customer protection and privacy while the too-strict regulation may hamper the development of Islamic fintech. “The rules should protect all parties involved in the Islamic fintech practice, namely, the firms, customers, and investors,” Rais added. He said another challenge was the threat to information security and privacy. It was imperative as for the consumer; trust is everything. The adequacy of current security standards and protocols is questioned considering the high number of cybersecurity events in recent years. “There should be a rethink of two important matters. Regular meetings and engagement between the regulators and fintech stakeholders in the early stage of regulatory development are very crucial and necessary in building clarity and a secure environment.” Rais said the growth rate of Islamic finance in Malaysia was impressive by any standard. However, to encourage more industry stakeholders across different sectors in MDEC’S KEY ISLAMIC FINTECH INITIATIVES: • To establish a leading body at a national level to champion the Islamic fintech agenda. • Position Malaysia as an earlystage Islamic fintech start-up hub to attract local and foreign startups to anchor regional operations in the country and use Malaysia as a gateway to wider ASEAN. • Carve an Islamic fintech niche: Shariah fintech for financial inclusion. • Build an inclusive fintech ecosystem comprising Islamic fintech start-ups, corporates, NGOs, Shariah banks, Islamic asset managers and practitioners in the Zakat, Waqf as well as the Sadaqah space • Develop an Islamic fintech guidance to establish parameters of Islamic fintech services, define roles of stakeholders and market practitioners. • Develop a local talent base and improve the awareness and understanding of Islamic fintech among stakeholders, especially investors and corporates. • Design and execute coherent Islamic fintech brand and amplify accordingly. • Encourage B2B collaboration between Islamic banks to conduct research and development and support Islamic fintech ecosystem. • Utilise existing mechanisms or establish new ones to facilitate private investments into Islamic fintech. is critical in driving Digital Islamic Services opportunities, adoption and growth. How do you get more industry stakeholders across different sectors to enhance the growth of Islamic finance in Malaysia? Our Islamic finance system has been growing tremendously for the past few years, from retail to commercial Islamic banking and finance, to general and life takaful insurance and to sectors of the Islamic capital market. So, it is not difficult to continue encouraging it if the approach for Islamic finance is appropriate. The related authorities should improve shariah governance through research and development. Besides, the infrastructure to support further development of the Islamic financial industry in addressing the institutional capacity for the national and international levels should be strengthened to avoid any complications and people’s reluctance to take part in Islamic finance. MDEC is providing skills training designed to bring in additional income avenues for Malaysians. How has the response been? The response has been immensely great because the skills training offered by MDeC has helped many people generate extra income through various opportunities. This is through MDeC’s collaboration with a lot of companies to help individuals, entrepreneurs and businesses mainly