Good Morning! Distinguished Participants, Ladies, and Gentlemen

It is a great honor for me to deliver, on behalf of the United Nations Capital Development Fund, a keynote speech at the launching event of "FIKRA – Islamic Fintech Accelerator." I would like to first congratulate the Securities Commission of Malaysia for this excellent initiative and would also like to recognize the tremendous efforts of both SC and UNCDF colleagues who have worked very hard to prepare for this, particularly in conceptualizing its substance.

We are all well aware that the Islamic Capital Market (ICM) is a vital component of the overall capital market in Malaysia. Therefore, it plays an essential role in generating economic growth for the country. Today, the ICM accounts for over 60% of the total capital market and plays a crucial role in the country's dual financial system. The ICM functions as a parallel market to the conventional capital market and plays a complementary role to the Islamic banking system in broadening and deepening the Islamic financial markets of the country.

Throughout the globe, financial technology companies—FinTechs—have made huge strides in redefining the way we engage with financial services and products. They have time and again simplified the access to sophisticated FSPs and taken them to mass markets previously untouched/unexplored. Capital markets across the world have experienced this and so have the more rapidly evolving Islamic Capital Markets.
Conventionally, the ICM has primarily evolved from—focusing on offering basic Shariah-compliant products and services as alternatives to conventional offerings—to providing comprehensive financial solutions for different market segments' needs. However, this evolution has mainly focussed on revere engineering the conventional financial products to meet the sharia-compliance requirements. This approach has limited the focus on innovations around standalone Islamic fintech solutions.

At a global level, Malaysia continues to maintain its leadership in the international Islamic capital market. Its capital market regulator, the Securities Commission Malaysia (SC), has paved the way for it through a supportive regulatory framework. However, to spearhead the further evolution of the Islamic capital market in Malaysia, the Islamic fintech industry must come to the forefront.

The road ahead to turn Malaysia into an Islamic fintech hub is not without its challenges. To accelerate its progress, we must take a more cohesive approach, spearheaded by a national authority—like the SC—to champion the Islamic fintech agenda. In addition, a dedicated roadmap for the Islamic digital economy will help facilitate a pragmatic sequential approach to the overall strategic initiatives.

This is where "FIKRA – Islamic Fintech Accelerator" comes in. This is a first-of-its-kind accelerator for fintech solutions in the Islamic Capital Market of Malaysia. It will act as an avenue for sustainable development needs, advancing financial health and well-being agenda and accelerating responsible investing innovation.
As a regulator-led accelerator program, FIKRA aims to become Malaysia's testbed for innovations in the Islamic Finance fintech solutions space. Therefore, FIKRA is an opportunity call to the brightest talents in this segment for innovations and investments. FIKRA's purpose and role are to develop and improve business ideas and solutions that will boost the fintech development in the Islamic Finance ecosystem. FIKRA will work towards:

1. Creation of products or services that are based on the principles and values of Islamic Finance;
2. Innovation, digitization or automation within Islamic Capital Market;
3. Designing Solutions that support financial inclusion and sustainable and responsible investing; and
4. Integrating Islamic Social Finance instruments into the capital market.
5. Greater Accessibility and relevancy of ICM leading to greater inclusivity

Islamic Capital Markets (ICM) has been championing the agenda that supports the UN's SDGs – whether through investments in SRI (including ESG & green Sukuk and bonds), ensuring financial inclusion, and promoting Islamic social finance through the introduction of unit trust and wholesale funds with waqf feature.
The accelerator program will explore innovations that can deliver solutions to the problems that are faced by the Islamic community. In this regard, innovations integrating traditional Islamic social finance institutions with fintech and existing capital market service providers would be a great place to start.

The Securities Commission has chosen to collaborate with UNCDF to organize and run FIKRA. The alignment of values and direction shared between the ICM and UNCDF's agenda in upholding Sustainable Development Goals (SDGs), Sustainable and Responsible Investing (SRI), and financial health of the public; makes UNCDF and SC a viable partnership for FIKRA. In addition, UNCDF brings along the valuable experience of running various 'innovation challenges' through their Financial Innovation Lab (FinLab). Through our broad network and unique facilities, we help start-ups find innovations and drive impact through scale.
As part of our current work in Malaysia under the Financial health program, UNCDF too is exploring new collaborations to test solutions addressing the needs of the Low-middle-income (LMI) segment. Given that Malaysia has a significant Muslim population that demands sharia compliant financial services and products, the Securities Commission has been quite active in supporting new models, especially those that extend public participation.
Under UNCDF's existing program, we intend to work on three aspects around Islamic capital markets (ICM):

1. Create new ICM offering around value proposition of Islamic Finance principles
2. Access to ICM to drive inclusion and address financing gaps
3. Integration of Islamic Social Finance into ICM.

For this will provide the much-needed market to pilot, iterate, and improve their solutions; and at the same time unlocking huge capital for investment. These are the kind of win-win solutions that UNCDF always aspires to create. This engagement in Malaysia would serve as good learnings which could be taken to other markets across the globe specially in least developed countries (LDCs)

At UNCDF, where we do not want to leave anybody behind in the digital era, we want to work with all of you to help make Islamic Capital Market more inclusive and accessible to the masses. Our mission is to reach a range of customer segments such as Muslim women, youth, seniors, informal workers, migrants, and refugees to help them solve their financial challenges as a community. And we cannot do this without our partners -both the private sector and regulators- as well as our counterparts – other multilateral and donors

In closing, I'd like to extend my thanks to the Securities Commission of Malaysia, represented by Chairman Datuk Syed Zaid Albar, for your support of UNCDF's vision on financial health, SDGs, and SRI. UNCDF is proud of this effort to pioneer the ICM fintech industry to much bigger heights in the time to come.

To the private and public sector present here, we promise UNCDF's support and partnership in perpetuating an inclusive digital economy that puts us at the forefront of the new Islamic Finance era.