KLIFF 2014 - Digitization of Islamic Banking

ISLAMIC BANKING

the innovation frontier inRaja Teh Maimunah

Chief Executive OfficerHong Leong Islamic Bank

Chief Operating OfficerDigital Innovation & Transactional Banking

Hong Leong Bank

First, a little bit of HISTORY

The MUSLIM empire

was once SYNOMYMOUS

with

INNOVATION

COFFEE

15TH

CENTURY

YEMEN/ETHIOPIA

ALGEBRA

750-850AD

PERSIA/IRAQ

UNIVERSITIES

859AD

MOROCCO

CAMERAS

11TH

CENTURY

CAIRO

NUCLEAR

POWER

1942

ENRICO FERMI

(ITALY)

COMPUTER

1833-71

CHARLES BABBAGE

(ENGLAND)

AUTOMOBILE

1769

NICOLAS-JOSEPH

CUGNOT

(FRANCE)

AIRPLANE

1903

WRIGHT BROTHERS

(USA)

COFFEE

BREWER

1925

GERHARD MARCKS

(GERMANY)

… then we stayed dormant,

and of late, the western world picked up where we left off…

"Islamic finance has proven successful

in poverty alleviation and promoting

sustainable growth in many countries,

including the United States, and it is very

relevant in our country (India) where 20

million people are starving“

V.R. Krishna Iyer

India Supreme Court Judge

With Islamic Finance, we’re back in the innovative front… and the world believes it

“Islam is not only concerned with the

relationship between man and God but it is also

a system of beliefs, justice, equity,

fairness and morality, these being the

values that underpin the entire Islamic way of

life, which is, not surprisingly, the basis for the

creation of Islamic financial products.”

Brian Kettel

Renowned Author

17.6%growth rate

in the last 4

years

total value of Islamic

banking assets

78%contributed by

QISMUT countries

105countries have

Islamic FIs

38millioncustomers

worldwide

1.7trillion

Why should Islamic FIs turn to DIGITAL BANKING

… growing in

customer base -

incurs costs to grow

human capital

… shouldering

additional process

steps before

products are

introduced to

consumers

… lower in cross-

selling despite

having same data

with conventional

ISLAMIC

BANKS

are…

Countries with

Muslim

majority

population

contribute

8%

to the world’s

GDP

32%

of their population

comprise of

under 15-year

olds

Becoming

more affluent in

nascent

lifestyles –

tourism, fashion,

cosmetics etc.

($13.7b spent by

Muslim tourists last year)

Already armed

with the latest

tech

gadgetries as

part of their

daily rituals

MARKET

READIN

ESS

What we’re already doing at Hong Leong Bank

Peer-to-peer Mobile Money Transfer function that allows HLB Connect users to send money to a

phone number, no sharing of account details necessary.

Merchant payment function where customers can pay for their

purchases using their Connect Mobile app.

Connect Mobile app users can generate their own collection code

on their mobile phones to withdraw cash from ATMs without

using their ATM cards

…and the numbers are encouraging!

thank you

terima kasih