Moody's: Digitisation and regulatory support drive growth of Islamic finance in Malaysia, Indonesia | Malay Mail

PublishedMalaysia, which has led the Asean region in regulatory efforts to support Islamic banking, has introduced a framework to incorporate ESG values in Islamic banks’ operations and risk governance. — Picture by Ahmad Zamzahuri

“Backed by strong profitability, Islamic banks in both Malaysia and Indonesia are stepping up their investments in digitisation, which should help the industry expand at lower costs,” said Moody’s vice president and senior analyst Simon Chen, in a statement here. Another benefit of digitisation, for Islamic banks, in particular, is that it helps them overcome their small physical presence in boosting revenue, it said.

Moody’s said regulators in the countries are not just promoting growth, but are also steering banks to tackle emerging risks related to environmental, social and corporate governance values while pursuing growth, a credit positive.

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