Higher digitalisation, fintech tie-ups can open new growth avenue for Islamic finance

He said technology is also being increasingly used towards enhancing financial literacy, which has a positive relationship with financial inclusion.

Increasing financial literacy could certainly increase participation in the Islamic financial system and the adoption of Islamic financial products and services, he said.

"Despite the challenging environment that affected the Islamic finance industry's growth in 2020, COVID-19 offers an opportunity to accelerate and unlock its long-term potential.

"The pandemic and various lockdown measures have led to the rapid growth in digital solutions to reach out to a broader audience and create a nimbler Islamic finance industry," he said in his special address at the 16th Kuala Lumpur Islamic Finance Forum (KLIFF) held virtually, today.

Abdul Wahid pointed out that many Islamic fintech startups are now offering digital mortgage platforms, wealth management and mobile applications such as Wahed Invest, Qard Hassan, HelloGold, and BEST Invest.

He said Islamic finance is no longer a domain exclusive only to Muslims -- it has grown to be a US$2 trillion industry and continues to receive strong interest as an avenue for funding and raising investment.

In Malaysia, the Islamic finance has much to offer given its resilient financial system and innovative ecosystem including Bursa Malaysia-i, which offers faith-based investors a unique proposition and platform for Shariah-compliant investing, he said.

As of January 2021, a total of 79 per cent of listed companies on Bursa Malaysia are Shariah-compliant, with a market capitalisation of RM1.2 trillion.

"To support the growing demand for sustainability, we will also continue to strengthen and broaden our Shariah-compliant offerings with the aim of increasing investors' participation and allow them to fulfil their social responsibility of contributing wealth towards economic growth and society's welfare.

"This includes using Islamic social funding instruments such as Qard Hassan, social sukuk, waqf, and zakat as a sustainable means for equitable distribution of wealth to help companies and individuals economically affected by the pandemic," he elaborated.

Abdul Wahid said Bursa Malaysia has pledged to contribute one per cent of its profit after tax or RM3.8 million towards community projects that would positively change and benefit society.

This was inclusive of the inaugural RM667,000 zakat payment, he added.