3rd Annual Islamic Finance Conference

Enhancing The Role of Islamic Finance within Digital Economy Era:
"Opportunities and Challenges"

Four Points Hotel Makassar, July 4 - 5 2018


Digital technology is rapidly becoming the biggest driver around the world of economic innovation, competition, and growth (ADB, 2017). However, digital technology creates both opportunities and challenges for finance industry. Digital technology in financial sector (fintech) has changed the landscape of the industry, enabled the ecosystem for financial inclusion, and produced innovations. Nevertheless, fintech emerges critical issues to anticipate such as technology failures, employment, regulatory gaps and consumer protection. Therefore, well-coordinated policies and regulations are demanded to ensure the financial market is becoming more efficient and stable while technological innovation in the industry keeps developing at all levels. In the context of Islamic finance, fintech must also comply with sharia rules.

McKinsey Global Institute in 2016 projected that the role of digital finance will be becoming more significant in the future. Using its various platforms such as P2P lending and crowdfunding, fintech has enabled financial services to operate with greater efficiency, innovative and accountable. Digital technology also widens opportunity for the industry to tap new market with lower cost structure and wider coverage, and increases chances for entrepreneurs and MSMEs to access capital as alternative to accessing traditional lending institutions.

According to McKinsey, fintech holds the potential to increase the inclusion of about 1.6 billion people in emerging economies by providing more access to financial services, thanks to nation-wide coverage telecommunication infrastructure. Fintech will benefit stakeholders by increasing volume of loans to businesses and individuals up to USD2.1 trillion; contributing to save government budget up to USD110 billion per year; saving $400 billion for direct costs; and increasing the balance sheet by USD4.2 trillion. By going digital it is expected that the annual GDP of all emerging economies will improve by USD3.7 trillion (6%) by 2025. Nevertheless, the future economic impact of the application of digital finance may vary significantly depending on countries' starting position. In Indonesia's case, it is estimated that there will be USD150 billion in growth - or 10 percent of GDP - by 2025 if Indonesia digitizes its economy effectively and efficiently.

As well as financial sector in general, Islamic finance is also exposed to disruptions due to technological changes. Major Islamic centers such as Malaysia, Bahrain and UAE have embraced and anticipated the disruptions by issuing a regulatory sandbox framework; or by introducing Innovation Testing License in Dubai for the new products and business models to be tested within the Dubai International Financial Center (DIFC). In addition, on January 8, 2018, the Abu Dhabi General Market (ADGM) and the Bahrain Economic Development Board (EDB) signed a Fintech Cooperation Agreement, the fist in the MENA region, which will allow for a closer collaboration on the exchange of information on trends, services and products, and building a closer relationship between the development of Islamic finance and fintech initiatives across the region.

In Indonesia, there are currently about 115 startups, 23 financial institutions and 7 association partners collaborating and making the best use of technology for business platforms. Among 115 startups, 30 companies are registered, and one is registered as a sharia-based fintech company. Another one company has a business license from the Indonesia Financial Services Authority (OJK). OJK and Bank of Indonesia as regulators for financial services and payment system have issued sets of regulations, including sandbox, as legal basis to support development of fintech and at the same time protect consumers' interest.

According to the ICD-Thomson Reuters Islamic Finance Development Report (2017), Islamic finance has recorded 7% growth in the last decade in terms of total global assets or equal to USD2.2 trillion. The report shows that banking still dominates Islamic finance industry with 73% of total Islamic finance assets, while Sukuk (16%), Islamic Mutual Funds (4%), Takaful (2%) and other Islamic financial institutions (6%). The rise of fintech, though regarded as an industry disruptor, brings huge potential for innovative partnerships and developments for Islamic finance in areas such as regulatory technology, P2P takaful platforms, or automated Islamic wealth management portals. As a result, Islamic finance will able to compete and increase its market share. Finally, broadening access to Islamic financial institutions through digital technology will not only contribute to financial inclusion but also unlock productivity and investment, reduce poverty, empower women, and improve the economy for sustainable development.

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Speakers


Sri Mulyani Indrawati
Minister of Finance of Indonesia
H.E. Prof. Bambang P.S. Brodjonegoro
Minister of National Development Planning, Republic of Indonesia, Chairman of Indonesian Association of Islamic Economist
H.E. Dr. Bandar M. H. Hajjar
President of IDB Group
Prof. Suahasil Nazara
Chairman of Fiscal Policy Agency - MOF
Prof. Dwia Aries Tina Pulubuhu
Rector of Hasanuddin University
Prof. Dato’ Azmi Omar
President and CEO, INCEIF
Dr. Humayon Dar
Director General of IRTI – IDBG
Gabriele Vigo
Senior Partner at McKinsey & Company
Adiwarman Karim
Karim Consulting Indonesia
Dr. Mohamed Damak
Director, Global Head of Islamic Finance, S&P
Ameriza Ma’ruf Moesa
Deputy Director, Bank Indonesia
Sarjito
Deputy Comissioner, Otoritas Jasa Keuangan (OJK)
Mohd. Sani bin Mohd. Ismail
Senior Financial Sector Specialist, Asian Development Bank (ADB)
Prof. Basri Hasanuddin
Faculty of Economics and Business, University of Hasanuddin
Abayomi A. Alawode
Head of Islamic Finance, World Bank
Suminto, S.Sos., M.Sc., Ph.D
Ministry of Finance, Republic of Indonesia
Prof. Habib Ahmed
Durham University
Maritz bin Mansor
Commissioner, Ethis Indonesia
Triyono
Group Advisor, Digital Finance Innovation and Micro Finance Development, OJK
Dr. Hylmun Izhar
Senior Economist, IRTI-­IDB
Ronald Yusuf Wijaya
Chairman, Indonesian Sharia Fintech Association
Mulia Salim
Vice President Director, BTPN Syariah

Moderators


Shaima Hasan
Research & Bespoke Solutions Manager, Thomson Reuters
Ashraf Arshad
Financial Sector Specialist, World Bank Office Malaysia
Ashraf Gomma Ali
Director and Regional Head Shariah, CIMB Group
Kahlil Rowter
Prospera

Guest Lecture Day 1


Prof. Dato’ Azmi Omar
President and CEO, INCEIF

Guest Lecture Day 2


Prof. Habib Ahmed
Sharjah Chair in Islamic Law and Finance in the Business School, Durham University

Agenda


Time StartTime EndAgenda
15:3017:00

Call for Paper, Parallel Presentation

PIC: Faculty of Economics and Business, Universitas Hasanuddin

15:2015:30

Coffee break

10:2010:30

Coffee Break

12:0013:30

Dhuhur Prayer & Lunch Break

13:3013:50

Guest Lecture

“Balancing Innovation, Competition and Consumer Protection for Financial Services Institutions in Digital Era”

Prof. Dato’ Azmi Omar, President and CEO, INCEIF

09:4009:55

Keynote 1

H.E. Dr. Bandar M. H. Hajjar, President of IDB Group (represented by Director General of IRTI-­IDB, Dr. Humayon Dar)
“Digital Economy and Sustainable Development in IDB Member Countries: Brief Review and Policy Recommendations

09:5510:10

Keynote 2

H.E. Dr. Sri Mulyani Indrawati, Minister of Finance of Indonesia
“Enhancing the Role of Islamic Finance in Achieving Sustainable Development in Digital Economy Era: Opportunities and Challenges”

10:1010:20

Opening, Photo Session and souvenir presentation

(MoF proceeds to Press Conference Room)

09:1509:25

Opening

National Anthem : Indonesia Raya

Quran recitation

10:3012:00

Panel Session 1: Digital Economy in OIC Member Countries: Challenges and Opportunities

This session will discuss the current condition of economic and finance of OIC member countries,
and challenges as well as opportunities emerged from technology disruptions.

  1. Digital Finance and the Future of Islamic Banking and Finance,
    Gabriele Vigo, Senior Partner McKinsey & Company
  2. Managing the Impact of Fintech: Case of Indonesia Islamic Banks,
    Adiwarman Karim, Karim Consulting Indonesia
  3. The Impact of Digital Economy on OIC Member Countries, 
    Dr. Mohamed Damak, Director, Global Head of Islamic Finance, S&P

Discussion Chair:

Shaima Hasan,  Research & Bespoke Solutions Manager, Thomson Reuters

13:5015:20

Panel Session 2: FinTech, Islamic Finance and Regulatory Issues

This session will discuss regulatory issues on Islamic finance and financial tecnology.

  1. Regulatory Framework on Sharia-based Fintech: Current Issues,
    Prof. Dato’ Azmi Omar, President and CEO, INCEIF
  2. Regulatory Sandbox and Payment System in Indonesia, 
    Ameriza Ma’ruf Moesa, Deputy Director, Bank Indonesia
  3. Fintech and Consumer Protection in Indonesia,
    Sarjito, Deputy Comissioner, Otoritas Jasa Keuangan (OJK)
  4. Regulatory Issues in Financial Technology,
    Mohd. Sani bin Mohd. Ismail, Senior Financial Sector Specialist, Asian Development Bank (ADB)

Discussion Chair:

Kahlil Rowter, Prospera

08:3009:15

Registration

19:0021:00

Welcome Dinner

Performance (Unhas’ traditional dance group, IAEI etc.)

09:2509:40

Welcome remarks

  • Tautoto Tana Ranggina, Acting Secretary, Province of South Sulawesi,
  • Prof. Suahasil Nazara, Chairman of Fiscal Policy Agency - MOF
  • Prof. Dwia Aries Tina Pulubuhu, Rector of Hasanuddin University
Time StartTime EndAgenda
08:3009:00

Registration

09:0009:05

Opening

09:0510:45

Panel Session 3: Islamic Digital Finance for Sustainable Development

This session will discuss the role of Islamic finance for sustainable development in digital economy era.

  1. Green Economic for Sustainable Prosperity: What the University Can Do?,
    Prof. Basri Hasanuddin, Faculty of Economics and Business, University of Hasanuddin,
  2. Connecting Islamic Finance to Real Sector within Digital Era,
    Abayomi A. Alawode, Head of Islamic Finance, World Bank
  3. Green Sukuk: Financing the Future,
    Dr. Suminto, Ministry of Finance, Republic of Indonesia.

Discussion Chair:

Ashraf Bin Arshad, Financial Sector Specialist, World Bank Office Malaysia

10:4510:55

Photo Session and souvenir presentation

10:5511:25

Guest Lecture

“The Future of Islamic Finance: Between Sharia Principles and Innovation”

by: Prof. Habib Ahmed, Sharjah Chair in Islamic Law and Finance in the Business School, Durham University.

11:2511:55

Keynote Speech :

H.E. Prof. Bambang P.S. Brodjonegoro,
Minister of National Development Planning, Republic of Indonesia, Chairman of Indonesian Association of Islamic Economist

"Social Impact in Digital Economy : Islamic Finance Development Strategy"

11:5512:00

Photo Session and souvenir presentation

Announcement and Call For Paper Awards Presentation

(MoDP proceeds to Press Conference Room)

12:0013:00

Dhuhur Prayer & Lunch Break

13:0014:30

Panel Session 4: Sharia Compliance for Fintech Services

This session will focus on the issues of sharia compliance of technology-based Islamic finance products and transactions.   

  1. Maqhasid Sharia in Digital Economy Era, 
    Prof. Habib Ahmed, Durham University,
  2. Sharia Standards on Fintech,
    Dr. Humayon Dar, Director General of IRTI – IDBG,
  3. Sharia Compliance for Islamic Fintech in Indonesia,
    Dr. Oni Sahroni, Indonesian Ulama Council (DSN-MUI),
  4. Islamic Fintech Worldwide: Sharia and Compliance Issues,
    Maritz Mansor, Commissioner, Ethis Indonesia

Discussion Chair: 

Ashraf Gomma Ali, Director and Regional Head Shariah, CIMB Group

14:3014:40

Photo Session and Souvenir Presentation

14:4016:10

Panel Session 5: Fintech for the Inclusion, Development, and Efficiency of Islamic Finance

This session will discuss the role of fintech for Islamic financial market development.

  1. Fintech for Financial Sector Developmen in Indonesia,
    Triyono, Group Advisor, Digital Finance Innovation and Micro Finance Development, OJK ,
  2. Innnovation, Risk Management and the Way Forward for Islamic Banking and Finance,
    Dr. Hylmun Izhar, IRTI-IDB,
  3. Fintech and the Inclusion of Islamic Finance in Indonesia,
    Ronald Yusuf Wijaya, Chairman, Indonesian Sharia Fintech Association,
  4. The Impact of Technology Revolution for Islamic Banking Development: BTPN Syariah Experience,
    Mulia Salim, Vice President Director, BTPN Syariah

Discussion Chair:

Dr. Muhammad Yusri Zamhuri, Hasanuddin University

16:1016:20

Photo Session and Souvenir Presentation

16:1016:30

Closing

Arif Baharudin, Assistant of Minister for Financial Services and Capital Market Policy and Regulation, Ministry of Finance


Location


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