Sukuk industry players are urged to pay special attention to the power of smart technology to transform the industry to become a more transparent and better regulated industry, as well as to harvest low-hanging fruits by leveraging on this new and inspiring technology.
Deputy Finance Minister Datuk Ir Haji Amiruddin Hamzah says the coming of the 4th Industrial Revolution will shape the way we used to do things in the past. The influence of smart technology, from Internet of Things (IoT) to big data analytics and artificial intelligence will leave its fingerprint in most, if not all sectors of life.
“Everyone and every industry are in the position to benefit from this smart technology to bring one’s organisation to greater heights. The sky’s the limit.”
He noted that there is already a technology or rather software that can predict the potential default of any issuer based on certain global data, the relevant industry and the issuer’s balance sheet.
“Not only can this help in managing the risk better, but it can also prescribe the steps to be taken to improve the financial terms and conditions, and what it takes to avoid any risk of default.”
Amiruddin was speaking at the launch of 2nd International Kuala Lumpur Sukuk Conference - The Future of Sukuk Embracing the Fourth Industrial Revolution.
The two-day event, held at the Securities Commission, was organised by Malaysian Rating Corporation Bhd, Amanie Group and Amanie Academy and supported by CIMB Islamic Bank, Bond+Sukuk Information Exchange, RHB Investment Bank, Amanah Raya Trustees, Moody’s Investors Services and Malaysian Digital Economy Corporation (MDEC).
Malaysian Business is the official media for the event.
Amiruddin points out that block chain technology, for example, already has many proven use cases, and as the technology matures and develops, further use cases will emerge.
“In a nutshell, this technology is the smartest technology thus far to bring to the world a more transparent system. On top of the security feature, which is safe from hacking and manipulation, it serves to eliminate certain bad practices in the market, since it is based on open distributed ledgers.”
“As with everything new in this world, the world needs to see and appreciate the function of role models. This has been achieved when the World Bank recently launched bond-i (which refers to a block chain-operated new debt instrument), which is the world’s first bond to be created, allocated, transferred and managed throughout its life cycle using distributed ledger technology,” he highlighted.
The two-year bond raised AUD110 million, marking the first time that investors have supported the World Bank’s development activities in a transaction that is fully managed using block chain technology.
“I am personally eager to see how fast the sukuk market can tap into block chain technology to manage sukuk issuances, covering its complete life cycle; from rating, subscription, trading, etc. I am confident this will become a reality one day,’ he added.
Also present at the opening ceremony of the conference this morning were Tan Sri Ranjit Ajit Singh, Chairman of the Securities Commission Malaysia; Datuk Zainal Izlan bin Zainal Abidin , Deputy Chief Executive, Securities Commission Malaysia; Datuk Dr Mohd Daud bin Bakar, Executive Chairman of Amanie Group; Sabrina Kan Wai Sum, Chief Executive Officer of the Malaysian Rating Corporation Bhd; and Lillian Leong Bee Lian, member of Board of Directors, Malaysian Rating Corporation Bhd.
