would include underserved groups and segments that are currently deemed too ‘ risky ’ by traditional risk metrics. advancements of any sort always come with trade - offs. for one, with the rapid progress of genetic sciences, it is only a matter of time before chronic diseases such as cancer and diabetes can be predicted even before birth, thereby potentially denying affected individuals of insurance coverage. automation and artificial intelligence may also result in the displacement of certain segments of the workforce or some segments of society being denied medical protection. finance, when used properly is an enabling tool. but if abused, it can be a destructive tool with devastating consequences. finance without ethical considerations will magnify the negative aspects and lead to lasting consequences as the global financial crisis demonstrated. technological progress would mean excesses can be magnified even further, spreading the risks to a wider segment of the society. regulators, therefore, stand at the nexus between magnifying the benefits of access to finance and managing the excesses of finance. there are moral and ethical considerations that regulators and policymakers will have to confront as we go forward. four possible future scenarios let us conceptualise these themes into four scenarios, an approach that could provide a peek into what is in store, as we visualise the future. the first scenario is “ tech - savvy incumbents ” a. the pace of technology adoption by incumbent banks is high, while level of fragmentation among finance providers is low. this is a more ambitious, albeit possible, scenario where banks successfully adopt the best strategies and emerge as the dominant winner in all finance segments ; b. here we see banks as incumbent institutions responding quickly to technology shifts, realigning their business processes and delivery channels to meet customer expectations. they succeed in nurturing both tech - literate management personnel and digitally - savvy talent ; c. emerging tech firms remain important sources of innovation but are acquired by the incumbents. as a result, these institutions can successfully retain and expand their customer base ; and d. in this scenario, although we will not see a dramatic change in terms of players in our financial system, the functions and ways in which they conduct businesses will be dramatically different. the second scenario is “ plugged - in finance ” a. both technology adoption by incumbent banks and fragmentation among finance providers are high. finance is marked by an ecosystem of “ co - dependence ” between banks and tech start - ups that target specific, profitable segments of the market rather than the whole suite of financial services

mohd razif bin abd kadir : islamic banking products – theory, practice and issues opening remarks by mr mohd razif bin abd kadir, deputy governor of the central bank of malaysia, at the 2nd foundations of islamic finance series conference : “ islamic banking products – theory, practice and issues ”, kuala lumpur, 8 march 2011. * * * i am delighted to be here today and would like to thank the organisers for inviting me to deliver the opening address at this 2nd foundations of islamic finance series conference. following the success of the inaugural conference held last year in dubai, this years event is a commendable collaboration between the organisers ; the international centre for education in islamic finance ( inceif ), the international shariah research academy for islamic finance ( isra ) and the university putra malaysia, to provide an avenue for discussions on various literatures in islamic finance by eminent practitioners and scholars, with the aim to produce quality publications for the industry. the theme of this years conference, “ islamic banking products : theory, practice and issues ” is most timely as waves of innovation are pervasive in islamic finance in the recent years, fostering the generation of a wide spectrum of islamic financial products and services. as the next frontier of development in islamic finance evolves through innovation, we have to be mindful that innovation within an environment of constant change and increasing uncertainties is indeed a challenge. joint efforts between academia and industry to conduct research, to explore and deliberate on issues relating to the development of new islamic financial products, such as the efforts that have led to this conference can therefore provide a point of reference for the industry in ensuring that new and better products are developed to match the diverse and discerning needs of customers, while meeting the requirements of the shariah. the ability of islamic finance, as a form of financial intermediation that provides a range of high quality financial products and services, reflect the innovative and dynamic nature of the industry that contributes to its role as a facilitator of economic activity. together with the fundamental requirements in islamic finance that an underlying productive economic activity accompanies financial transactions, a close link is formed between financial transactions and productive flows. given that islamic financial instruments reflect the underlying economic activities and that such instruments inherently have the potential to provide tangible returns to investors, there have been significant demands on such products. this gives rise to the competitiveness of islamic finance, which is further spurred by the