KUALA LUMPUR: Islamic finance pioneer Malaysia is looking for new drivers to reignite growth for its US$286mil (RM1.2bil) industry.

       Sustainable finance and digitisation of services will lead the way, with lenders expected to adopt technologies such as artificial intelligence and big data to break into underserved markets, said Bank Negara assistant governor Adnan Zaylani Mohamad Zahid.

       The syariah finance industry is at a crossroads after global interest tapered following a burst of sukuk offerings from non-Islamic countries such as Britain and Hong Kong more than five years ago.

       Players are seeking to carve a niche in socially responsible finance, with the likes of Malaysia offering dollar sukuk linked to sustainable activities over the past year.

       Bank Negara and the Securities Commission will host the Royal Award for Islamic Finance 2022 on Oct 4.

       “Significant mobilisation of funds is required to support Malaysia’s efforts to build climate and social resilience.

       “We see Islamic financial institutions to be at the forefront of advancing the sustainability agenda by scaling up offerings of value-based solutions, and leveraging value-based intermediation works.

       “Bank Negara will work with Islamic financial institutions to ensure the regulatory environment is conducive for industry innovation,” he said.

       On the halal economy, he said by leveraging Malaysia’s competitive advantage in the halal economy, there is potential for Islamic finance players to further expand their footprint across Asia and the Organisation of Islamic Cooperation countries through halal trade and investment facilitation, including market expansion and offering of ancillary services.

       “Bank Negara will continue to facilitate new and strengthen existing global partnerships that support the nation’s halal agenda.”

       On digitalisation of financial services, he said Islamic financial institutions should step up the adoption of emerging technologies such as artificial intelligence and big data to tap into new opportunities in underserved markets. — Bloomberg