Malaysia-Bahrain should lead world's first Islamic Fintech

Malaysia and Bahrain, two leading Islamic financial hubs in the world, should take the lead in exploring the potential of introducing the world's first Islamic financial technology (fintech).

Bahrain Economic Development Board (EDB) Executive Director for Financial Services Business Development David Parker said the favourable initiatives, undertaken by regulators from both countries in issuing regulations related to fintech, provided a positive edge for Islamic fintech.

"If these two countries could collaborate, I think it will be really powerful.

"Now, this is something that we need to explore in 2017," he said in an exclusive interview with Bernama and Malay Mail organised by EDB here recently.

Fintech is a service provided by Internet companies that streamline financial systems and make funding of the supply chain more efficient.

The technology has become a major game changer in the global financial market.

In Malaysia, Bank Negara Malaysia Governor Datuk Muhammad Ibrahim said a regulatory framework to enable the adoption of fintech would likely be announced by year-end.

During the recent 23rd Annual World Islamic Banking Conference held here, Bahrain Central Bank Governor Rasheed Mohammed Al Maraj hinted that the bank would soon issue regulations to facilitate fintech solutions.

Meanwhile, Bahrain Islamic Bank Chief Executive Officer Hassan Amin Jarrar described the need to introduce Islamic fintech to the world Islamic financial market as "critical".

With the specially-designed features, the technology would not only help serve the Islamic financial market but also offer a great service to the conventional financial market.

"You can basically customise it (technology) with a lot of features, but they must be shariah compliance.

"Islamic banks need to become very technologically savvy. I think it will be very helpful to the industry and we need to expedite it (fintech)," he said.

Hassan pointed out that being leaders in the Islamic financial industry, Malaysia and Bahrain should take the first step and pioneer Islamic fintech or else other big countries would snatch away the advantages.

"If we don't, London will do it. London is racing to become an Islamic banking hub.

"If London doesn't, then New York will jump on it (the idea) and do it.

"I think we need to be the first to pioneer Islamic fintech," he added. - Bernama