The third imperative is strengthening connectivity for greater innovation and impact. I see opportunities for this in three areas. The first relates to the halal sector, and the role that the Islamic finance industry can play in supporting its growth and expansion. While the percentage of halal-certified companies utilising Islamic finance facilities has been on a rapid uptick – nearly doubling from 21.9% in 2018 to 41.3% in 2021 – more can be done, especially to facilitate connectivity across halal value chains. The industry should continue to explore new sources of funds based on the concept of risk sharing and develop more impact-based funding, investment and trade facilities that can drive improvements in productivity and efficiency of halal companies. Technology can also be leveraged to embed financial services into the halal ecosystem,  3/4  BIS - Central bankers' speeches  where Islamic finance solutions are seamlessly integrated into the offering of halal products or services. Apart from being more efficient and frictionless, it can also offer a more complete proposition to businesses and consumers The second is on community-based connectivity. Here, the integration of social finance within the core offerings of Islamic financial institutions can be a game-changer. In an environment of high household leverage, taking on more debt-based borrowing may not be the best solution for micro-businesses and low-income segments. Therefore, deploying blended capital – using social impact investment, donation, waqf and zakat – enables funding to be more accessible and responsibly used to support entrepreneurship for innovation.

Only 4.2% of investment accounts intermediated by Islamic banks are suitable to finance transformation, such as in supplying growth capital to industries of the future or new business models. 3. We have also yet to make the most out of the full range of Shariah contracts in finance application today. Benevolent contracts, risk sharing contracts and other asset-based contracts have yet to be fully utilised to offer a broader spectrum of funding, investment and protection solutions. This means that we are not realising the full potential of value-based finance to address contemporary economic and social needs. This also points to a continued need to foster appreciation of the fundamental values of Shariah among market participants and its embodiment in financial solutions, services and conduct. Changes to the way Islamic finance operates cannot happen overnight. But what the industry does today will be crucial in bringing to life the fundamental values of Islamic finance, and showing how it is relevant to address contemporary challenges. In my view, to elevate the values of Islamic finance to the next level, the industry must seek to embody and exemplify the value of ihsan, continuously striving for attainment of excellence. A hadith narrated in Sahih Muslim reported that Prophet Muhammad (peace be upon him) said, "Verily, God has enjoined excellence (ihsan) with regard to everything." Manifesting ihsan in Islamic finance, thus, calls upon all stakeholders to steadfastly find ways to transform and deliver the highest standards in all aspects of its business.