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MII Islamic FinTech and SDGs (Part 02)

What are the potentials of Islamic fintech in Malaysia and moving forward what is the future trend in your perspective? How should Malaysia equip itself to embrace these changes and remain ahead of the game? 

Islamic fintech in Malaysia has immense potential due to the country’s strong Islamic finance industry and supportive regulatory environment. Moving forward, several future trends can be expected in the Malaysian Islamic fintech landscape. To embrace these changes and remain ahead of the game, Malaysia should consider the following measures:

Regulatory Framework: Malaysia has been proactive in developing a conducive regulatory framework for Islamic fintech. The authorities should continue to enhance and refine regulations to ensure innovation while maintaining consumer protection and financial stability. This includes addressing emerging issues such as cryptocurrency and blockchain-based solutions within the Islamic finance context.

Collaboration and Partnerships: Encouraging collaboration between Islamic fintech startups, traditional Islamic financial institutions, and other stakeholders is crucial. Malaysia can facilitate partnerships through industry events, incubation programs, and regulatory sandboxes. These collaborations can leverage the expertise, resources, and networks of established players while driving innovation and fostering sustainable development.

Talent Development: Malaysia should focus on developing a skilled workforce in Islamic fintech. This can be achieved through educational programs, training initiatives, and industry-academia collaborations. Building a talent pool with expertise in both Islamic finance and fintech will be essential for driving innovation and sustaining Malaysia’s competitive advantage.

Investor Support: Encouraging investment in Islamic fintech startups and initiatives is vital. Malaysia can create incentives, such as tax benefits or investment funds dedicated to Islamic fintech, to attract investors. This will provide startups with the necessary capital to scale up their operations, drive innovation, and contribute to the growth of the industry.

Market Expansion: Malaysia should focus on expanding its Islamic fintech offerings beyond its borders. By fostering international collaborations, participating in cross-border initiatives, and leveraging Malaysia’s expertise in Islamic finance, the country can position itself as a regional hub for Islamic fintech. This will attract foreign investments, drive innovation, and create opportunities for Malaysian startups to expand into global markets.

Digital Infrastructure: Strengthening the digital infrastructure is crucial for the growth of Islamic fintech in Malaysia. This includes improving internet connectivity, promoting digital literacy, and enhancing cybersecurity measures. A robust digital infrastructure will support the scalability and adoption of Islamic fintech solutions, making Malaysia a more attractive destination for investors and startups.

Customer Education and Awareness: Enhancing customer education and awareness about Islamic fintech is important. Malaysia should undertake public awareness campaigns, workshops, and seminars to educate the public about the benefits and principles of Islamic fintech. This will help create a supportive ecosystem where consumers are aware of the options available and can make informed decisions.

By equipping itself with a supportive regulatory framework, fostering collaborations, developing talent, attracting investments, expanding its market reach, strengthening digital infrastructure, and enhancing customer education, Malaysia can embrace the changes in Islamic fintech and position itself as a leader in the industry. This will enable Malaysia to leverage its strengths in Islamic finance and fintech, drive innovation, and contribute to sustainable development while remaining ahead of the game.

What are the areas that the government/regulators can improve to facilitate the advancement of Islamic fintech in Malaysia? 

To facilitate the advancement of Islamic fintech in Malaysia, the government and regulators can focus on the following areas for improvement:

Regulatory Sandbox: Establishing a regulatory sandbox specifically tailored for Islamic fintech would allow startups and innovators to test their products and services in a controlled environment. This regulatory sandbox should provide flexibility in regulatory requirements, enabling experimentation while ensuring consumer protection and systemic stability. It can help foster innovation, attract investments, and accelerate the development of Islamic fintech solutions.

Regulatory Clarity: Providing clear and comprehensive regulations that address the unique aspects of Islamic fintech is essential. Regulations should cover areas such as crowdfunding, peer-to-peer lending, digital wallets, robo-advisory services, and blockchain-based solutions within the context of Islamic finance. Clear guidelines will provide certainty to businesses, encourage participation, and facilitate the development of innovative Islamic fintech offerings.

Collaboration Platforms: Establishing platforms for collaboration and engagement between regulators, government agencies, industry players, and startups can foster knowledge sharing, feedback exchange, and policy dialogue. These platforms can serve as channels for communication, enabling regulators to understand the needs and challenges of Islamic fintech startups and facilitate the development of supportive policies.

Talent Development: Investing in talent development programs specific to Islamic fintech is crucial. Collaborations between universities, industry associations, and fintech companies can provide specialized education and training courses to produce professionals skilled in both Islamic finance and fintech. By nurturing a pool of talented individuals, Malaysia can support the growth and innovation of the Islamic fintech industry.

Investor Support: Encouraging investments in Islamic fintech startups and initiatives is important. The government can introduce incentives, such as tax benefits, grants, or investment funds specifically targeted towards Islamic fintech. These measures can attract investors, foster entrepreneurship, and provide startups with the necessary capital to grow and scale their operations.

Cross-Border Collaboration: Facilitating cross-border collaborations and partnerships with international Islamic fintech ecosystems can help Malaysian startups expand their reach and attract foreign investments. The government can promote initiatives to strengthen ties with other countries and facilitate regulatory harmonization to create a conducive environment for cross-border collaborations.

Consumer Education: Increasing consumer education and awareness about Islamic fintech is essential. The government can launch public awareness campaigns, organize seminars, and create educational resources to inform the public about the benefits, principles, and risks associated with Islamic fintech. This will help build trust, increase adoption, and empower consumers to make informed decisions.

By focusing on these areas of improvement, the government and regulators in Malaysia can create an enabling environment for Islamic fintech to thrive. This will support innovation, attract investments, nurture talent, and position Malaysia as a leading hub for Islamic fintech in the region.

How can Malaysia create a conducive environment for fintech startups to support its growth and success rate? 

To create a conducive environment for fintech startups in Malaysia and support their growth and success rate, the following measures can be taken:

Regulatory Support: The government should establish clear and flexible regulations that encourage innovation while ensuring consumer protection and financial stability. This includes creating a regulatory sandbox for fintech startups to test their products and services, providing streamlined licensing processes, and introducing regulatory frameworks that are adaptable to emerging technologies.

Access to Funding: Facilitating access to funding is crucial for the growth of fintech startups. The government can establish dedicated funds, grants, or venture capital programs specifically targeted at supporting fintech startups. Encouraging collaboration between traditional financial institutions and fintech startups can also provide access to capital and resources.

Talent Development: Fostering a skilled workforce is vital for the success of fintech startups. Malaysia should invest in educational programs and training initiatives that focus on fintech-related skills such as coding, data analytics, cybersecurity, and digital marketing. Collaborations between universities, industry associations, and fintech companies can help bridge the talent gap.

Regulatory Sandboxes: Setting up regulatory sandboxes allows fintech startups to test their innovative solutions in a controlled environment. This enables startups to validate their business models, assess risks, and fine-tune their products while working closely with regulators. Regulatory sandboxes provide valuable feedback and help streamline regulatory processes for startups.

Collaboration and Ecosystem Building: Fostering collaboration between fintech startups, traditional financial institutions, academia, industry associations, and government agencies is crucial. Initiatives such as industry events, incubation programs, and innovation hubs can facilitate networking, knowledge sharing, and partnerships. These collaborations can provide startups with mentorship, resources, and market access.

Digital Infrastructure: Developing a robust digital infrastructure is essential for fintech startups to thrive. The government should focus on improving internet connectivity, ensuring data security and privacy, and promoting digital literacy among the population. This will create a solid foundation for fintech startups to build and scale their digital products and services.

Market Access and Internationalization: Assisting fintech startups in accessing local and international markets is vital for their growth. The government can support initiatives that connect startups with potential customers, investors, and partners domestically and internationally. This includes participating in trade missions, organizing roadshows, and promoting Malaysia as a fintech hub.

Investor Engagement: Encouraging investor engagement in the fintech ecosystem is crucial. The government can organize investor showcases, pitch competitions, and networking events that bring together fintech startups and potential investors. Facilitating connections between startups and angel investors, venture capitalists, and corporate investors can help attract funding and support growth.

By implementing these measures, Malaysia can create an environment that supports the growth and success of fintech startups. This will foster innovation, attract investments, create job opportunities, and contribute to the country’s economic growth and digital transformation.

What are the current challenges and opportunities for Islamic fintech in Malaysia that needs to be addressed? 

Islamic fintech in Malaysia faces both challenges and opportunities that need to be addressed. Here are some of the key challenges and opportunities:


Regulatory Framework: Developing a comprehensive regulatory framework that addresses the unique aspects of Islamic fintech is a challenge. Regulations need to accommodate Shariah compliance requirements while fostering innovation and ensuring consumer protection. Harmonizing regulations across different sectors, such as Islamic finance and fintech, is crucial to provide clarity and encourage growth.

Shariah Compliance: Ensuring robust Shariah compliance in Islamic fintech products and services is essential. Startups need to navigate the complexities of Islamic law and obtain necessary certifications to gain trust and attract customers. Overcoming the challenges related to interpretation and application of Shariah principles can be demanding but necessary to build a sustainable Islamic fintech ecosystem.

Talent and Expertise: Access to skilled professionals with expertise in both Islamic finance and fintech is crucial. The shortage of talent in this specialized field can hinder the growth of Islamic fintech startups. Developing educational programs and training initiatives that bridge the gap between Islamic finance and technology can address this challenge.

Consumer Awareness and Trust: Increasing consumer awareness and building trust in Islamic fintech solutions is important. Many consumers may have limited knowledge about the benefits and principles of Islamic finance and its compatibility with fintech. Effective communication and education campaigns can help overcome misconceptions and build trust among consumers.


Islamic Finance Ecosystem: Malaysia has a robust Islamic finance ecosystem, providing a strong foundation for Islamic fintech. This ecosystem includes established Islamic financial institutions, a wide range of Shariah-compliant financial products, and a supportive regulatory environment. Leveraging this ecosystem can help accelerate the growth of Islamic fintech startups.

Financial Inclusion: Islamic fintech has the potential to promote financial inclusion by providing accessible and affordable financial services to underserved segments of the population. Malaysia’s commitment to promoting financial inclusion, combined with Islamic fintech innovations, can help address gaps in financial services and empower individuals and businesses.

Ethical and Sustainable Finance: Islamic fintech can play a role in advancing ethical and sustainable finance by offering Shariah-compliant investment and financing solutions. Malaysia has already made strides in promoting sustainable finance, and Islamic fintech can contribute to the achievement of sustainable development goals through responsible and ethical financial practices.

Digital Transformation: Malaysia’s ongoing digital transformation journey presents opportunities for Islamic fintech. By leveraging technology and digital platforms, Islamic fintech startups can enhance customer experiences, streamline processes, and reach a wider audience. Collaboration with traditional financial institutions and leveraging digital infrastructure can accelerate the adoption of Islamic fintech solutions.

Cross-Border Expansion: Malaysia’s strategic location and reputation in Islamic finance can serve as a gateway for Islamic fintech startups to expand into regional and global markets. Collaborations with international Islamic fintech ecosystems and participation in cross-border initiatives can open up opportunities for startups to scale their operations and attract foreign investments.

Addressing the challenges and capitalizing on the opportunities will require collaboration among stakeholders, including regulators, industry players, investors, and academia. By fostering innovation, strengthening the regulatory framework, building talent, increasing consumer awareness, and leveraging Malaysia’s Islamic finance ecosystem, the Islamic fintech industry in Malaysia can thrive and contribute to the country’s economic growth and sustainable development goals.

GENEVA – Finterra & UNHCR!

December 14, 2019  ·

Hamid Rashid, the Founder of Finterra is in Geneva and will be taking the center stage at the United Nations High Commissioner for Refugees UNHCR‘s Forum speaking about the important role which Islamic Finance plays in responding to the refugee crisis, while specifically showcasing the Finterra Waqf Chain technology platform and how it plays an active and effective role in assisting with resolving the refugees crisis globally.

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