Positive transformations taking place around us will continue to pave the way for new growth opportunities for the industry. Collectively, we need to understand these developments and leverage on them to advance economic and social goals, and manage the attendant risks. Today, I would like to touch on three key issues, the rise of fintech and its impact on Islamic finance, the growing importance of responsible, inclusive and sustainable finance and the preconditions necessary to sustain a value-based financial system. One of the most significant transformational developments of our era is the technological revolution. More specifically, the fintech revolution was made possible by maturing social, mobile and cloud technologies. The digital revolution and widespread penetration of technology-driven applications in nearly every segment of the financial sector is already upon us. Fintech innovations are fundamentally altering the way we experience and deliver financial products and services. According to a recent McKinsey report, the number of fintech start-ups globally has now exceeded 2,000, more than twice the number less than a year ago. Such growth is expected to continue as innovators tap into the preferences of millions of technology savvy millennials who are more receptive to new ways of consuming financial services. Fintech is challenging the status quo of the financial industry. New business models will emerge. Delivery channels will challenge existing norms. Transaction costs will be reduced. Rather than looking at the fintech revolution as unwelcoming, financial institutions ought to embrace it as an opportunity.

In at least 10 jurisdictions, Islamic banking now represents more than 20% of total banking assets – a feat that has been achieved in under a decade. And in many more countries, Islamic financial services are now available alongside conventional financial services. These developments underscore a clear and sustained trend in which Shariah-compliant financial products and services have continued to gain traction among businesses and individuals from all walks of life. In fact, the value propositions of Islamic finance has extended beyond faith and origins that appeal to the global community. It is the intrinsic qualities of Islamic finance that are multifaceted that have pulled interest from diverse backgrounds. At the core of Islamic finance lies virtues that encompass both moral and commercial aspect in deriving potential solutions for economic and financial stability. The values and principles that Islamic finance carry have opened new pathways towards achieving economic prosperity while safeguarding the interest of the public. What used to be a novel idea has become mainstream. Indeed, Islamic finance is for all. In Malaysia, efforts led by the Central Bank to develop Islamic finance spans over three decades. The invaluable contributions by earlier Governors of the Central Bank laid the foundations for the development of an international Islamic financial centre in Malaysia, serving both global and domestic demand. Their visionary leadership in this journey not only ensured that our fundamentals were strong, they had significantly raised the global profile of Islamic finance with Malaysia setting an example that would encourage development in other countries.