Two areas I wish to highlight in which the Bank sees room for the industry to demonstrate immediacy and act together. First, mainstreaming Value-based Intermediation (VBI). The Islamic finance industry has demonstrated commendable progress through the VBI Community of Practitioners (COP) in developing frameworks and guidance that support the implementation of VBI. This momentum should continue into other implementation areas such as 'collaborative pilot' solutions, and impact monitoring and reporting with even greater rigour. As envisioned in the Blueprint, collaboration should also be extended beyond Islamic finance as VBI principles are universally applicable to the whole financial sector. For stakeholders of financial institutions, these initiatives should only be measured as "accomplished" once the benefits of value-based finance are genuinely experienced and felt, especially by financial consumers. To achieve this, business strategies, operations and manpower must be aligned to impact-driven corporate value intent. Finance solutions goes beyond providing economic benefits, it extends into delivering tangible social and environmental benefits. Another area is Open Data. A multi-stakeholder collaboration involving the financial industry, government agencies and even the third sector such as NGOs is crucial in advancing open data arrangements. This year, open data initiatives will focus on identification of high priority use cases by the industry, which can then be immediately worked on together. Through initiatives such as VBI and open data, financial institutions can augment its contribution to wider stakeholders in promoting economic and social developments. The third imperative, (and this is a viewpoint close to heart), is that value-based leadership requires empathy.
Suhaimi Ali: Leading change through Value-based Impact Opening remarks by Mr Suhaimi Ali, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Sustainability Leadership Programme for Financial Institutions, Kuala Lumpur, 24 May 2022. *** While domestic economy is expected to improve further this year, risks to Malaysia's growth momentum remain. Beyond economic factors, adverse developments surrounding COVID-19 as well as environmental and social risks continue to heighten volatility. The December 2021 flood event for example, hailed as the worst since 1971, demonstrated specific vulnerabilities and intricacies in how risks are to be managed: 1. Structural reforms are needed to improve Malaysia's flood risk mitigation infrastructures; 2. Large-scale relief efforts need strong coordination to be effective; and 3. Finance solutions must be expedient and impactful to help those affected. This recent flood episode goes to show that sustainability-related risks are inherently volatile, uncertain and complex, and would require a change in how finance is structured and consumed. Allow me to offer some perspectives on leadership imperatives for financial institutions to catalyse and support a more orderly transition to a sustainable economy. Firstly, the financial sector must actively respond to critical needs through innovation-led growth. Demographic shifts, rapid technological change and climate change will continue to place new and evolving demands on the financial industry. In navigating the challenges ahead, agility in finance response is key.