Financial Service Industry

The financial services (FS) sector, accounting for nearly 12% of Malaysia GDP, continues to play an important role in driving Malaysia’s economic growth, both as strategic sector as well as a mobiliser of funds for investment. Over the next 10 years, the finance and insurance sector is expected to have continue strong growth of 8.3% and to continue an estimated 13% of GDP.

Leveraging on Malaysia’s strength in the Financial Service sector and its strategic location that straddles between two international financial hubs of Singapore and Kuala Lumpur, The Federal and state government Johor and private sector are in collaboration to accelerate and transform Iskandar Malaysia into a Financial Shared Services Outsourcing (FSSO) in the region.

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With the world finance restructuring and reshaping and continuous challenges in the global financial service industry, there will be more consolidation of banks, stringent credit policies and greater market trading supervision around the globe. There are trend of growing usage of online banking and investment online in Asia Pacific. Higher education, higher income and appetite for higher risk and diversied range of financial and investment products also creates a need for advisory assistant in wealth and financial products in the region. Foreign banks are also tapping into opportunities and growing wealth individuals in the emerging countries.

Globally, Islamic finance has been making strong inroads into the mainstream financial market, growing at around 20% on average annually over the last 10 years. Rising market awareness of Islamic finance products, national government initiatives and oil wealth have transformd Islamic finance into an industry of USD1 trillion in asset globally. I the next 10 years, the global Islamic finance industry is expected to quadruple to USD4 trillion.

The Iskandar Malaysia financial sector is identified and segmented into two major categories, namely the core financial products and the ancillary services related to financial institutions as following:

1. Financial Shared Services and Outsourcing

  • Business process operations
  • Back-office operations
  • Call centre
  • ICT support or data center
  • Wealth management
  • Human resource management
  • Processing and administrative support activities

2. Islamic banking and finance

  • Retail banking and wholesale banking
  • Asset management
  • Takaful and retakaful
  • Capital market

3. Financial and other professional services

  • Accounting and auditing
  • Tax consultancy
  • Legal consultancy
  • Market research
  • Management services
  • Advisory services
  • Corporate secretarial services

4. Offshore financial services

  • Offshore companies
  • Operational headquarters
  • Incubators

5. Knowledge development and research hub

  • Higher learning institution
  • Collaboration between financial institutions and regulators

There are many catalysts project, policies and infrastructure being built and done to provide the ideal environment for investors to invest in financial services Iskandar Malaysia as following:

1. Comprehensive : Integrated financial infrastructure

The development of Islamic finance in Malaysia has been supported by comprehensive regulatory framework and human capital development programme.

2. Capabilities : World-class workforce at affordable cost

Availability of multi-lingual and quality workforce at affordable cost with several local and foreign higher learning institutions including Islamic finance studies catering to Financial Services industry meeds.

3. Cost competitiveness : Affordable quality

Affordable quality from experienced talent pool, available real estate (ample land and building like Medini Business District, MSC Malaysia Cybercity and MSC Malaysia Cybercentre) and cost-effective facilities and amenities.

4. Catchment : Gateway to Asia and Middle East markets

Being in the center of large Muslim nations (Indonesia, west Asia), Malysia has sone market proximity to major Islamic financial institution and Shariah investors

5. Connectivity : World class and integrated network

World-class infrastructure with excellent multi-modal connectivity linking two international airports, four international seports, integrated rail and road networks, and ICT-high speed broadband highways supporting fast connectivity to global markets.

6. Conducive environment : Dynamic and stable

Aside from stable government, resilient economy, easy and competitive place for doing business, the Financial Services sector has strong government support, with varios fiscal and non-fiscal incentives.

Johor Islamic Finance

Johor Islamic Finance

Islamic Finance Hub

Islamic Finance Hub

Facts of Islamic Finance in Malaysia

Facts of Islamic Finance in Malaysia

Source from IRDA

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