Zeti Akhtar Aziz: Into the next chapter – transformative changes to strengthen industry linkage with the real economy Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Global Islamic Finance Forum 2014 “Into the Next Chapter: Transformative Changes to Strengthen Industry Linkage with the Real Economy”, Kuala Lumpur, 2 September 2014. *  *  *  It gives me great pleasure to welcome you to this fourth Global Islamic Finance Forum. In this new era of great transformative change in the world, the growth and evolution of Islamic finance has continued to be very much part of the changing configuration of the global financial system. An important part of this ongoing change, is the growing internationalisation of Islamic finance, that has resulted in greater cross-border financial flows which has in turn facilitated greater and more diversified economic inter linkages between countries. With this increased pace of the internationalisation of Islamic finance, the total global financial assets of the Islamic financial industry is now estimated to be more than $ trillion. The growth has continued to gain scale with its geographical outreach now extending beyond Muslim countries to the more established international financial centres and to other emerging economies. Across continents, Islamic finance is therefore having an increasing role in intermediating funds across borders and creating greater financial and economic interlinkages. The increasing international dimension of the global sukuk market, in particular, affirms its offering as a distinct platform upon which international inter-linkages are fostered.

The introduction of its Finance Qualifications Structure that will be launched today has strategic significance, as it aims to link the various qualifications relevant to financial practitioners under a cohesive framework which will allow for greater mutual recognition on qualifications and provide clear and systematic learning path for financial professionals. Complementary to this initiative is the launch of the Learning Standard to ensure more global consistency for learning contents across the financial services industry in line with international industry benchmarks. Technology can also be explored to remove barriers or impediments in promoting greater interconnectedness in Islamic finance as we aim to create stronger linkage with the real sector. As a catalyst to improve market access and enhance outreach, technology has the potential to disseminate information more efficiently, to promote greater market transparency and price discovery. Today, the launch of the digital application for Islamic finance is a further pioneering platform to facilitate sharing of information and for greater engagement, including between industry players that transcend borders. Such innovation is an impetus for raising greater awareness on benefits of Islamic finance as a form of financial intermediation. Realising cross-border business opportunities for greater linkages The next frontier of Islamic finance beckons the global Islamic finance marketplace to evolve its business models to that which would strengthen the nexus of Islamic finance with the real economy.