Our Sandbox is unique as it is the first to include Islamic finance. Thus, industry players can be assured of the regulatory support by the Bank in expanding their frontiers of innovation. We would therefore expect to see more technological platforms to be introduced and infusion of technology to take place not only to disrupt the way we do things, but at the end of the day, to be able to significantly enhance values and experience for the consumers. The third and final key area relates to the measurement of the industry’s contribution to society and the wider economy. Islamic finance has more to offer beyond the confines of the conventional parameters of Sustainable, Responsible and Impact Investing (SRI); as well as the Environmental, Social and Governance (ESG) considerations. A natural alignment between Islamic finance and SRI already exist, given that the principles of fairness; equality; and ethics are embedded in Islamic finance which are associated with social well-being of the people. Given these common core values, there are certainly vast opportunities for Islamic finance to broaden its investor portfolio to access the global SRI funds that stands at more than USD3 trillion. In broadening the horizon of Islamic finance by tapping into socially-conscious investments, the industry can actively spearhead efforts to promote and reach out to investors whom are value driven. We envision that investments through Islamic finance products would meet the aspiration and needs of this group of investors.

By embracing and embarking on digital innovations, it opens up new and ample opportunities for our industry players to re-ignite productivity growth and increase efficiency of processes. Technology will certainly redefine the future financial landscape; and fintech is progressing by leaps and bounds in the conventional sphere; and rapidly changing consumer behaviour and needs. Islamic finance, being a relatively young industry, has vast opportunities to leverage on technology as a catalyst to scale up businesses and enhance operational efficiency. This includes understanding the potential of blockchain technology and its associated risks to enable its effective adoption that is both cost and time-saving. The integration of digitisation strategies in the business model of our domestic players is already taking place with the recent launch of the Investment Account Platform. Another important area of growth for industry players to optimally use technology to increase process efficiency is Islamic trade finance that currently has a domestic market share of only 4% of total Islamic financing. A more advanced trade execution leveraging on technology is expected to further stimulate crossborder trade and growth of the real economy. From the regulators’ perspective, disruptive innovations in the industry are very much welcomed. Financial regulators in Australia, China, Singapore, United Kingdom and the United States are amongst those that have positively embraced the infusion of technology in their financial industries. For Malaysia, the issuance of the Regulatory Sandbox policy document in October provides regulatory clarity; lowers barriers to entry; and accelerates the time-to-market for productive innovations.