The Islamic banking industry needs to improve profitability and attract more investment as it ventures into new markets, said Sultan Nazrin Muizzuddin Shah Ibni Almarhum Sultan Azlan Muhibbuddin Shah Al-Maghfur-Lah, The Sultan of Perak Darul Ridzuan at the opening ceremony of 14th Kuala Lumpur Islamic Finance Forum 2017 (KLIFF 2017) this morning.
In addition, the Sultan said, the industry today needs to maintain high standards of loan quality and corporate governance. Also, he added that the Islamic capital markets need to grow at a faster pace so that there is not an undue reliance on Islamic Banking alone.
The Sultan, who was delivering his keynote address at the opening ceremony, stated that the negative trends of corporate issuances of sukuk need to be reversed, the Islamic equity market also needs to be more comprehensively developed and takaful insurance needs to be grown to exploit the huge opportunities that are available.
“We need to work assiduously to strengthen the weaknesses while continuing to expand, innovate and progress in every sense of the word. Islamic finance needs to be able to connect with the fast-changing nature of global finance, while remaining absolutely uncompromising in terms of faithfulness to Shariah principles and ethics. It is imperative that we be driven by a vital and energising vision of Islamic Finance and our roles in it. Ours is, after all, more than a profession; it is a calling.” said the Sultan.
He also notes that, the world today is entering the Fourth Industrial Revolution, one where not only are individual technologies developing at rapid rates but also reinforcing one another and converging. The requirements to participate in the 4 IR world are immense and so too are the financing requirements. Islamic finance cannot be left out of new forms of technology financing and, indeed, may be said to be ideally suited given our established participatory profit-and-loss sharing financing schemes. Crowd funding, for example is a prime example.
In addition, Sultan Nazrin said Islamic Fintech must rise to the occasion. The one-shoe-fits-all approach to financing must be eventually discarded in favour of more tailored or structed financial solutions. With the vast amounts of big data being generated, this is now possible, provided that Islamic Finance institutions can manage, analyse and customise products for corporations and individuals alike. Regulatory authorities need to catch the vision and facilitate developments.
KLIFF 2017, held from 3rd October to 4th October with the theme “Real Finance for Real Economy”, is an annual gathering for Islamic Banking and Finance industry organised by Centre for Research and Training (CERT) in association with Messrs Hisham Sobri & kadir (HSK), Amanie Advisors and the Association of Islamic Banking Institutions Malaysia (AIBIM).
With over 500 participants, KLIFF 2017 includes three official events; KLIFF Main Forum hosted by RHB Islamic Bank Berhad and KLIFF Awards Dinner Presentation hosted by CIMB Islamic Bank Berhad. Also, the 12th KLIFF Shariah Forum or Muzakarah Penasihat Syariah Kewangan Islam 2017 will be held on 5th October at the same place, Hotel Istana, Kuala Lumpur.
