by S BIRRUNTHA / pic by TMR FILE

LACK OF research, data and insufficient information in Islamic finance industry are seen as the key challenges that stagnate the industry, says Islamic Development Bank VP finance and CFO Dr Zamir Iqbal.

“If you try to replicate some studies purely based on Islamic finance (but) you don’t have the available data, and even if you have the data, it is kind of contaminated or it sometimes does not serve that purpose,” he said during Maybank Islamic Bhd’s virtual Global Connect Forum yesterday.

Zamir pointed out that the Islamic finance industry is still very much at an infancy stage and has not taken off to explore different kinds of potentials and opportunities.

He said the industry is trying to survive in a conventional financial environment which has matured and has been rooted in each kind of aspect of the society, whether it is the legal framework or the constitution and others.

Monash University professor and consultant Professor Paresh Kumar Narayan said there has been an inability to access information and data on Islamic finance industry over the years.

He added the inability is seen as one of the key challenges faced by researchers in the field due to insufficient resources to update the industry and develop its growth further.

This lack of access to data was due to the lack of interest shown by the Islamic institutions in disclosing their information and data.

“They (Islamic institutions) need to give access to the data for us to do robust research. So, the question is, unlike conventional finance, why are Islamic financial institutions fearful of disclosing information or hiding their data?

“If the Islamic financial institutions are not willing to provide the data, that in itself puts a question mark on the sustait nability of Islamic finance,” he said during the forum.

Paresh Kumar said one area Islamic finance practitioners can focus on is developing databases that are readily available and easily accessible.

He emphasised this would establish a research culture that talks about the robustness of the industry.

Speaking on the issues of environmental, social, and governance (ESG), Maybank Islamic CEO Datuk Mohamed Rafique Merican shared the Covid-19 pandemic highlighted the need to incorporate ESG considerations into business models is crucial if the halal economy and Islamic finance are to maintain their strong growth.

Maybank Islamic, launched its three-day inaugural global thought leadership virtual conference on Monday, themed Driving Sustainable Impact Through Islamic Finance.

The forum is expected to drive more conversations among industry players and market observers alike, on how Islamic finance can play a big role in the areas of sustainability and inclusivity.

Over the three days of the forum, three thematic sessions were covered, namely, the integration of ESG and Islamic finance, digital and technology propositions, and building the global halal economy and its ecosystem.

Mohamed Rafique hoped the forum would bring diverse perspectives from experts in the Islamic finance ecosystem, to create connection, as well as drive collaboration.

“This would provide an impetus to reset and re-prioritise resources to re-steer our economies and financial systems to be more sustainable and inclusive.

“Islamic finance has large potential in this space,” he said.