The essence of Islamic finance is to integrate finance with real economic activities in order to foster socio-economic development. The technological revolution being witnessed today, especially the emerging disruptive financial technologies, is helping Islamic Finance to achieve exactly that. For example, blockchain technology allows financial transactions to be transparent and verifiable. Nevertheless, to take optimal advantage of the technological revolution using Islamic Finance as a tool, stakeholders need to change their ways of doing things.
Since its establishment, IRTI has focused on successfully leading initiatives for mainstreaming Islamic Finance primarily through research and capacity development. However, the emerging developmental challenges facing IsDB member countries, and indeed the world in general, require IRTI to re-strategize so that its programs and activities align more properly with the IsDBG 10-Year Strategy and President's 5-Year Plan (P5P). Both the 10-Year Strategy and the P5P focus on supporting diversification of the economic base, enhancing competitiveness, building capacities, improving infrastructure, and promoting financial stability and economic sustainability. In light of this, IRTI is refocusing its programs to utilize the opportunities provided by disruptive technologies to harness Islamic Finance towards addressing development issues facing IsDB member countries.
IRTI is exploring new opportunities in capacity development and research to better serve the varying needs of its stakeholders. The objective is to leverage learning for development solutions, and innovation in research for the development of Islamic Finance. IRTI will seek to achieve relevance, influence and impact, enhance strategic collaboration, and ensure efficiency and sustainability.
The IsDB Global Forum on Islamic Finance has become an iconic event held every year during the IsDBG Annual Meeting to discuss the most recent developments in the field of Islamic Finance. This year's forum, which is the 14th edition, was an opportunity for IRTI to discuss its new initiatives being proposed to help IsDB member countries take advantage of technological innovations towards fostering socio-economic development. The initiatives are: (i) Development of Future Knowledge Leaders and (ii) Developing Smart Economies for Member Countries. The forum had two panel sessions to discuss the two initiatives.
Session 1: Developing Future Knowledge Leaders
Following the presentation of the initiative proposed by IRTI, the session discussed several topics related to the development of future knowledge leaders. These topics included the definition of future knowledge leaders, the best practices in developing leadership, entrepreneurship and communication skills, and the main challenges facing IsDB member countries in developing future leaders.
Extensive discussions during this session has brought up new ideas and the key messages highlighted by the panelists emphasized the need for supporting the youth, especially women, in their path to success. The modern approach to business is that of an environment of experimentation and tolerance of failure. This approach should be based on an activity-based learning, which should replace theoretical learning. While the rapid development of new technologies makes blended learning the best option for developing capacities among new entrepreneurs, there a consensus that the role of business incubators is key in helping these entrepreneurs in developing their business.
Another consensus also emerged among the experts about the relevance of the components proposed by IRTI, including leadership, entrepreneurship, communication skills and Islamic Finance. However, there is a need to adopt a new model focusing on a comprehensive approach tackling these issues simultaneously, and not separately as was the case in the previous policies.
Session 2: Developing Smart Economy for Member Countries
The Smart Economy Initiative aims to help IsDB member countries to identify key segments of the economy suitable for digital transformation for maximum value. The initiative was presented during this session, followed by a discussion on the following areas:
• The need to create a program that facilitates deep links with different government ministries for funding FinTech and smart startups;
• The role of case studies with transformational indicators that communicate the gist of success and failure;
• Creating short strategy papers on smart economy for member countries. A set of different relevant things for different countries; and
• A survey of smart economy potential in each country along with landscape of FinTech regulations.
The importance of the smart economy initiative, which was emphasized by the discussants, lies in the gap separating IsDB member countries from other advanced countries in harnessing the potential of new technologies around the fourth revolution. Nevertheless, this initiative requires further details, benchmarking and key performance indicators (KPIs). Furthermore, the role of partnership between IRTI and other major stakeholders is key for the success of such initiative.