This is underpinned by its great potential as a competitive form of financial intermediation. In Malaysia, the Islamic banking system has evolved into a dynamic, competitive and internationally integrated industry. In this recent five years, the Islamic banking industry has continued to record double-digit growth rate of about 20 percent. It is also an important contributor to the strong levels of profitability recorded by the banking groups. In terms of assets, the Islamic banking sector now accounts for 12 percent of the total banking system. It is envisaged that by year 2010, the Islamic banking industry will constitute 20 percent of the overall banking industry market share. Financing extended by the Islamic financial institutions to SMEs has shown an encouraging upward trend, growing at an average annual rate of 34.2% for the period 2001-2006. As at end-2006, Islamic financing to SMEs reached RM10 billion, accounting for 9.6% of total SME loans outstanding of the banking system. This is a significant increase compared with the amount of Islamic financing extended to SMEs at end-2000, which was only RM1.7 billion or 2.4% of total SME loans outstanding of the banking system. Indeed, there is great potential for Islamic financial institutions to play a more significant role in providing greater choice to SMEs to meet their financing needs. Increasingly now, SMEs from the different sectors require more customised and differentiated financial products and services that accommodate their unique requirements. This reflects the more highly diversified nature of the Malaysian economy.

Technology is akin to Porthos, the fearless musketeer who is eager to try new ways for a better future. In a similar vein, Technology presents us opportunities to revitalise Finance: the opportunity to enhance customer experience; the opportunity to strengthen risk management; and the opportunity to improve cost efficiency. Let me elaborate on each of these opportunities. First, enhancing customer experience. This has become a critical success factor in many industries, including finance. Why? Basically, technology firms have reshaped the way businesses interact with customers. They have empowered customers and set higher bars for customer satisfaction. Whether they are established Big Tech firms or small FinTech start-ups, they pose a competitive challenge to financial institutions. If I have to name one thing these technology firms do very well, much better than financial institutions, it would be that they are obsessively customer-centric. Tech firms embed themselves in the customer journey and use data analytics to deeply understand customer needs. They then provide end-to-end solutions, often customised to individual circumstances. They have agile IT systems, efficient processes, and a culture that emphasises speed. Essentially, tech firms think of themselves not as being in a particular industry, but as platforms, upon which they provide access to the services their customers need. Traditional banks tend to be largely product-centric. The credit card division tries to sell you unsecured credit, the wealth management division tries to sell you mutual funds, the lending division tries to sell you a mortgage.