Changes also create difficulties It is positive that the market for payments is developing and can meet the new payment requirements that arise. Payments are increasingly based on technology and this trend will probably continue and expand. However, at the same time this development leads to new problems and tensions that need to be overcome. The problems we have identified include the following: Households and companies need even better access to different payment services. The capacity in the mobile network is not always adequate to manage temporary peaks and it may then be difficult, for instance, to make a card payment for a hot dog and soft drink at a sports event attended by several thousand people. Some groups in society, such as the visually impaired and very short people, can face problems as card terminals and ATMs are not always adapted to their specific needs. Other problems concern to a greater extent the tensions that may arise in relation to new payment services. Households may also have access to the technology needed to use a new payment service, but nevertheless prefer to use the old technology. As the latter technology becomes less accessible, tension may arise when the individual feels that his or her needs are not met. For instance, an elderly person may want to continue depositing and withdrawing cash over the counter in a bank or to pay payments there, but as fewer bank branches handle cash manually; this is becoming more difficult in practice.

Takaful companies will also be given the flexibility to enter into strategic tie-ups with foreign partners through higher foreign equity limit of up to 70%, to further strengthen resilience and competitiveness. In addition, international Islamic financial institutions can be established to offer the full range of Islamic financial services to residents and non-residents in international currencies. Another further measure announced is the liberalization of legal profession to allow up to five top international law firms with expertise in international Islamic finance to offer legal services in international Islamic finance in Malaysia. Internationalisation of Islamic finance Several factors are important in sustaining the internationalisation of Islamic finance. Firstly, is the development of international Islamic financial markets to enhance the liquidity of the instruments and the risk management capacity of the players. This is important to promoting the efficient functioning of the markets and thus facilitate cross border capital flows thereby strengthening global financial integration. However, it can be observed that in most jurisdictions that have Islamic financial institutions, Islamic money and capital markets remain relatively less developed. Consequently, Islamic banking institutions face the challenge in their day to day management of cash, arising from the lack of a comprehensive Islamic interbank market with highly rated short-term tradable instruments. Without access to such a market, it is difficult for these institutions to manage their short-term liquidity needs in an efficient and effective manner. This would in turn require them to maintain a larger amount of liquidity compared to their conventional counterparts.