In the Malaysian context, the various initiatives and developments taken place during the period of the Financial Sector Masterplan; between 2001 to 2010 have indeed sparked the growth and vibrancy of the industry. While achievements in various market segments have placed us at the forefront, more ground breaking initiatives are needed to seize the opportunities in new growth areas; and to reenergise the industry. An honest assessment on the existing business models and product offerings must be undertaken to recognise gaps and issues, which is a crucial step towards realising the true value propositions of Islamic finance. The future growth of Islamic finance, in my view, is underpinned by three key areas. This could also lead us to defining the future of Islamic finance as the ‘New Normal’ that can bring greater sustainable and equitable economic development. First, is to have a more cohesive efforts by industry players across all sectors in Islamic finance to realise its virtues that uphold social justice; equality; economic prosperity; and inclusivity. Indeed, these are challenging and daunting expectations. However, it is only through collaboration, that the Islamic finance industry could push its growth trajectory, into the next level of maturity. Working in silos should be replaced by promoting a culture of collaboration. Industry players should not only play a proactive role to enhance collaboration within the industry, it should also be extended beyond sectoral boundaries.

I would like to encourage Islamic banks to take on a more prominent and proactive role as investment intermediaries in addition to credit intermediation. In Malaysia, the Islamic Financial Services Act 2013 (IFSA) provides the enabling grounds for Islamic banks to extend its role to include investment intermediation. The virtues of Islamic finance are also characterised by its range of financial offerings with diverse products that meet the needs of customers across all levels. However, statistics have shown that retail financing by Islamic banks in the country dominates at nearly 60% and indeed, Islamic banks are predominantly strong in household financing. In addition to that, there is a large 2/4  BIS central bankers' speeches  concentration of financing by domestic Islamic banks using the Tawarruq contract, estimated at 20% of outstanding financing. There is a wide array of Shariah contracts that is readily available for the Shariah and product development units in Islamic banks to explore to reduce over reliance on Tawarruq, including risk sharing contracts such as Musharakah and Mudarabah to better serve the diverse needs of customers. The contract-based regulatory framework under IFSA 2013 provides the regulatory support for Islamic banks to expand their product offerings beyond the traditional debt-based products. The 14 Shariah Standards comprising debt-based contracts; equity contracts; leasing; and ancillary contracts and arrangements are expected to facilitate the Islamic financial institutions in diversifying their spectrum of products and services. The second key area to drive industry growth is the acceleration of innovation by Islamic financial institutions.