IFSB Summit 2019: Technological Innovation for the Sustainable Islamic Finance Development

18 November 2019, Jakarta –The first day of the 14th IFSB Summit 2019 remarked the consensus between thought leaders, market players, and regulators that the technological innovation would create positive impacts in sustaining the Islamic finance development that are in line with the global sustainable development agenda. Sharing their thoughts and views during thematic sessions of the IFSB Summit 2019, themed “Islamic Finance for Sustainable Development for the Technological Innovation”, the speakers and participants held productive discussions on the possibilities on how the technological innovation could have the positive impacts in fostering sustainable Islamic financial development. 

In the first panel session, themed “Leveraging Islamic Finance to Enhance Socio-Economic Inclusion and Sustainable Development”, the chairperson, H.E. Turki Almutairi, Deputy Governor, Saudi Arabian Monetary Authority (SAMA) introduced the session by highlighting the importance of the socio-economic inclusion and sustainable development in advancing the state of Islamic finance development. The session then further discussed opportunities in the Islamic Financial Services Industry (IFSI) with a view of the enhancing financial inclusion in fostering sustainable economic growth. Mr. Peter Kruschel, Director, International Policy, Financial Stability, Regulation, Federal Financial Supervisory Authority (BaFin) stressed the importance of the environmental and social impacts Islamic finance products to sustain the IFSI development with a robust regulatory framework and effective risk management set by the regulators. Dr. Firas Raad, The World Bank, Country Manager for Malaysia shared his views that Islamic finance can play transformative roles in the global sustainable development agenda as an alignment of values exists with the global agenda. Mr. Ijlal Alvi, CEO of the International Islamic Financial Market (IIFM), expressed the ideas from the international standard setting bodies views in supporting the responsible financing for Islamic capital market development for more effective resources mobilisation through the standard documentation development. Mr. Simon Gray, Division Chief of Technical Assistance of Monetary and Capital Market Department of International Monetary Funds (IMF) expressed the views that Environment Social Governance (ESG) is pertinent for promoting values based finance that will benefit greater financial inclusion and outreach for the Islamic finance development. 

The second session was themed, “Mainstreaming Islamic Finance Through Technology: Building a Robust Regulatory Eco-System”. This session was chaired by Dr. Wimboh Santoso, Chairman Board of Commissioners Financial Services Authority of Indonesia, who set the background by highlighting the regulation and innovation needed for the Islamic finance products and services towards the technological innovation. Mr. William Coen, Former Secretary-General, Basel Committee on Banking Supervision (BCBS) shared his global perspective regulation whereby regulatory ecosystem should be strengthened to set the prudential supervision parameters in facilitating the technological development within the banking system. Fahad Yateem, Director of Islamic Financial Institutions Supervision Directorate, Central Bank of Bahrain, shared his views that FinTech can play pivotal roles in creating the impacts for the Sustainable Development Goals (SDGs) agenda, particularly Islamic banks which have values in line with the SDGs agenda. Dr. Umar Oseni, Acting Chief Executive Officer, International Islamic Liquidity Management Corporation (IILM) shared his views that FinTech is a mean to enhance and simplify the Islamic financial services delivery. Furthermore, the technological development can enhance the financial inclusion in the Islamic finance development. Mr. A. K. M. Amjad Hussain, Executive Director, Bangladesh Bank shared his regulatory point of view that regulators have to take the control over the risks arising from the technological development in sustaining the Islamic finance development with an efficient risk management.

The third session adopting the theme of Broadening Access and Resilience in Digital Islamic Finance: Opportunities and Challenges was chaired by H.E. Dr. Yakup Asarkaya, Second Chairman, Banking Regulation and Supervision Agency, Turkey who briefed that Islamic finance opportunities for financial inclusion and social finance that need supported by an efficient technology. Dr. Yahia Abdul-Rahman, Chairman of the Board and Chief Executive Officer, LARIBA-Bank of Whittier shared his views that consumer protection is needed for the Islamic banking to embrace the digitalisation of the Islamic finance development. Mr. Adrian Gunadi, Co-Founder and Chief Executive Officer, Investree expressed his practical views of the FinTech development in Indonesia whereby FinTech is a breakthrough development embraced by the regulators by ensuring the regulatory framework and consumer protection. Furthermore, collaboration within the ecosystem is needed to accelerate the Islamic finance development through the technological innovation. Professor Volker Nienhaus, IFSB Consultant, Germany highlighted on the IFSB Technical Note of the Financial Inclusion that will be launched soon, there is a special chapter on how to integrate Islamic social finance with the Islamic commercial finance that can bring down the costs of Small Medium Enterprises (SME) financing and microfinancing. He also stressed that the technology can streamline the business process of the Islamic financial services in a more efficient manner. Mrs. Sharifatul Hanizah Said Ali, Executive Director, Islamic Capital Market Development (ICMD), Securities Commission Malaysia (SC) shared her regulatory perspective that inclusivity and sustainability are the main agenda for the Islamic capital market development to achieve higher penetration through the technological development as an enabler.

© Press Releases 2019