| Danial Norjidi |
ISLAMIC Fintech (financial technology) is an area through which Brunei can find fresh avenues for international collaboration and investment.
This was highlighted by Dato Paduka Awang Haji Abdul Mokti bin Haji Mohd Daud, the Deputy Minister of Religious Affairs, while delivering a keynote speech at a seminar on ‘Exploring Islamic Fintech’ yesterday.
“Islamic Fintech is a good example of where we can find avenues for international collaboration and investment that will enhance and strengthen our niche,” he said.
“It promotes the importance of aqad or mutual agreement which is clearly understood by users in order to validate the process.
“Most importantly, it provides security, transparency, a Syariah-compliant system and adopts the principality of the Syariah higher objectivity that is the preservation of wealth,” he continued.
“This can, in turn, create and generate capital, spinoffs in the local market employment opportunities and, ultimately, diversify and boost the Brunei economy.
“We are delighted by the favourable reception from various industrial players from the Republic of Korea in exploring these areas and encourage close cooperation and engagement.”
Reflecting on the topic of the seminar, he noted that it marries together two unique concepts – financial technology or ‘Fintech’ and Islamic values.
“The merging of the two into a single field of Islamic Fintech is symbolic of where our aspirations for Brunei Darussalam lie, that is to hold fast to and enrich our lives with Islamic values while also being unafraid of taking strides forward in an ever-advancing global society.”
Dato Paduka Awang Haji Abdul Mokti bin Haji Mohd Daud, the Deputy Minister of Religious Affairs giving his keynote speech at a seminar on ‘Exploring Islamic Fintech’ yesterday. – DANIAL NORJIDI
He noted that developments in Fintech have taken the financial industry by storm, covering the field of disruptive technologies that deliver innovative financial products and services, adding that it includes the novel payment methods and financial software and hardware services that are seen today.
“The growing cashless society is built on the foundations of Fintech advancements. With the surge in demand from consumers for cheaper, faster and efficient financial solutions and services, it is no wonder that Fintech has sparked global interest, Brunei Darussalam included.”
He cited a recent Accenture study, which shows that global investments in Fintech ventures in the first quarter of 2016 reached $5.3 billion – a 67 per cent increase over the same period last year. Investments going to Fintech companies in Europe and Asia-Pacific nearly doubled to 62 per cent. He shared that Accenture also reported that Asean will play host to the next wave of growth in global Fintech investment in 2016.
The deputy minister then went on to highlight that significant growth has been seen in Islamic financial services in recent years. This growth is expected to continue at a rapid pace, particularly in the Middle East and Asia Pacific regions, he said, noting that there has been an increase in the number of Islamic financial institutes being established, with over 600 operating in about 75 countries across the globe.
The growth of Islamic finance is evident with a move by large international banks and other private sector financial institutions now offering various Islamic financial services and products, ranging from banking, Islamic insurance (Takaful) to capital market that comply with the basic principles of Syariah. Market interest in Islamic bonds or Sukuk has also risen, with many being issued and bought even outside the Islamic world.
“Brunei is in a unique position to leverage these developments,” he said. “Not only is Brunei a gateway into the Asean and TPP market, but Brunei Darussalam has continued to make great progress in its Islamic finance industry.
“With its strong Islamic values coupled with growth of Islamic insurance Takaful and Islamic bonds Sukuk, Brunei has carved out a niche for itself in the international Islamic financial services,” he said.
“This presents an excellent competitive platform for the country to offer itself as an Islamic financial hub within the region. Brunei’s reputation for strong Islamic values also provides a good foothold across the Islamic world, including the Middle East.”
“As consumers become more sophisticated, our Islamic financial sector too must be able to match the growing complexity and sophistication of the market,” he asserted. “Innovation and technology, as key enablers for future business development, become more paramount.”
He cited the Gulf Times, which earlier this year declared Fintech to be a game changer for Islamic finance, and further reported that new ventures are combining Syariah-compliant financing principles with new technologies, such as web-based Islamic crowd funding; peer-to-peer lending; as well as other forms of IT-based financing options such as Bitcoin-based and Syariah-compliant micro-lending.
“Hence, from this angle, we are mindful of Fintech solutions that can revolutionise our Islamic financial services and leverage on the so-called ‘Fourth Industrial Revolution’ which is the movement towards combining everyday aspects of our lives, such as finance, into the digital realm that will help increase speed, efficiency and convenience.
“Technologies that will help drive this change include the Internet of things (IoT), artificial intelligence (AI) and data analytics,” he continued. “We hope that our digital start-ups, companies and ventures recognise that there are great opportunities to be explored by enhancing and reshaping traditional Islamic financial services with these technologies.”
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