KUALA LUMPUR, Oct 3 -- Financial technology (Fintech) would enable Islamic finance to attract more customers, increase efficiency, reduce costs and help the sector become more competitive, without compromising profitability, says Deputy Finance Minister Datuk Amiruddin Hamzah.
He said despite many people labelling Fintech as a threat to Islamic finance in the recent past, the government has found that it provides a great complementary layer of services that enhances the ability of Islamic finance to reach a larger audience and market.
"Fintech is an opportunity that the Muslim world must not miss out on. The beauty of Fintech is that it can be customised and modified in many different ways to allow us to create new Islamic financial services that would be very difficult to create within the banking industry.
"Also the Fintech industry has a much lower barrier to entry which allows the youth to have the opportunity to jump into the larger financial industry and try to create their own business," he said in his keynote address at the second Global Islamic Fintech Summit 2019 here today.
His speech was read by his private secretary Muhammad Fikri Ahmad.
In 2018, Amiruddin said, more than US$500 billion of remittances were transferred to low-income countries while in the ASEAN region alone, remittances received from abroad contributed to more than 5.0 per cent of some of these countries’ gross domestic product (GDP).
With the revolution in payments now made possible by scanning a QR code, Amiruddin said the ASEAN region has quickly caught on, noting that a recent study by Visa found 81 per cent of the ASEAN region is aware of QR payment systems and 75 per cent are interested in using them.
"In this country in particular, 70 per cent of Malaysian consumers prefer to visit merchants that accept digital payments compared to those that only accept cash, an increase of 21 per cent compared to the previous year according to the Visa Consumer Payment Attitudes Study 2018.
"Clearly this indicates that digital payments are becoming the payment method of choice in Malaysia," he added.
Amiruddin said that Malaysia has a number of institutions and initiatives that support tech startups and entrepreneurs to come here and build up their companies and grow from Malaysia all the way to the international market.
"I hope that this event would grow from strength to strength as a platform that brings together industry players, regulatory bodies and academia to develop and implement breakthrough ideas and innovative solutions.
"While we welcome the excitement around innovation and technology, we must not lose sight of what’s important in upholding the principles of Islamic finance, which is upholding ethical standards, and moral and social values," he added.