Budget: Strengthen Islamic Finance

Malaysia’s Islamic banking has existed for more than four decades, indicating that our fintech Industry is lagging behind and this must change

Budget: Strengthen Islamic Finance

By Othman Abdullah, CEO of Islamic Banking, Silverlake Axis

We are witnessing an acceleration in the country’s Islamic finance space following the 2023 pre-budget announcement around driving the reformation of the Islamic economy.

Malaysia is the world’s leader in Islamic finance, by strengthening its position in the fintech space and accelerating digitisation, it can create a route to accelerate its journey to full economic reformation.

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The benefits of Islamic fintech to Islamic banking and finance have yet to realise their full potential. However, Malaysia’s Islamic banking has existed for more than four decades, indicating that our fintech Industry is lagging behind, attributed to the lack of industry maturity and comprehensive coverage of all sectors within the financial services industry.

In line with that, the upcoming budget will need to fuel research and innovations to overcome the shortage of Islamic fintech innovations that solve real customer problems. In order to accelerate the adoption of Islamic fintech, various stakeholders must play their part in contributing to its development. Having said that, funding remains the key challenge, which can be addressed through national-level coordination among investors, entrepreneurs, and tech talent.

Ultimately, we wish to see a budget allocated to close the talent gap through education, industry training and internship programmes.