Indeed, we have seen numerous individuals who have made significant efforts and contribution to make Islamic finance what it is today. In creating such an award which will be given once every two years, it is our fervent hope that the conferment of this award will be inspirational to such involvement and contribution to Islamic finance. Malaysia’s experience in Islamic finance officially began with the establishment of the Pilgrimage Fund or the Tabung Haji in 1969 as an Islamic savings institution. Then, the first Islamic bank was set up in 1983 and in the following year, the first Takaful operator was established. Today, we have a comprehensive Islamic financial system that operates in parallel with the conventional financial system. Following liberalisation initiatives in this decade, there has been an increased foreign presence in our Islamic financial system. In particular, there has been greater foreign participation in Malaysia’s Islamic financial markets. The diversity of market players has contributed to increased competitiveness of the Malaysian Islamic financial services industry. To ensure the sustainability of our Islamic financial system, it is also supported by a robust regulatory and supervisory regime, legal and Shariah framework, and payment and settlement systems. In this decade, greater focus was particularly given to the institutional arrangements to develop the sukuk market. The sukuk market now accounts for more than fifty percent of our bond market. The market has drawn the participation from a wide range of international corporations and multilateral agencies in raising funds and investing in the sukuk issuances out of Malaysia.

Digitalisation is a broad concept that covers different aspects, and it needs to be clearly defined and specified for each institution. And second, the importance of establishing a robust operational resilience framework. The current pace of digital transformation at financial institutions is unprecedented. But increased digitalisation also entails greater ICT and cyber risks. Not only are malicious 3  attacks against financial institutions and their customers on the rise, but the enormous complexity of these institutions’ ICT systems makes operational errors more likely. In addition, institutions’ increasing reliance on specialised third parties, very often involving a multi-tiered supply chain, makes operational risk management even more challenging. Of course, we cannot talk about digital transformation and IT environments without mentioning data quality. Reliable data is the starting point for properly quantifying, identifying and monitoring any risk, to ensure that potential weaknesses can be identified in a timely manner and that any necessary measures can be coordinated. Climate and environmental risks are another area that supervisors have identified as a source of risk in the medium term, which should be closely monitored in order to properly understand and recognise these risks. Overall, both ESG and regulatory compliance are becoming more relevant due to their high reputational impact, and banks need to pay close attention to them. Internal control functions Another issue I would like to highlight is the key role of internal control functions in the smooth functioning of institutions, complementing the role of the first line of defence.