Description Our Response Future Priorities Risks and Opportunities Islamic financial services are expanding as banks diversify their Shariah-compliant offerings, including Sukuk, takaful, and social finance solutions, to foster financial inclusion for underserved segments like microentrepreneurs and SMEs. This expansion is closely linked to the rise of VBI, which integrates sustainability and ethical investment principles and reinforces the role of Islamic finance in driving inclusive economic growth. Digital transformation and evolving regulations further support this shift, enabling banks to scale their offerings, enhance accessibility, and compete more effectively in the growing Islamic finance market. • Identified and explored untapped markets for communities seeking financially inclusive solutions. • Introduced Hal-Cube in collaboration with strategic partners as a social finance initiative, supporting Halal certification for cottage industries, with a focus on Malaysia’s underbanked microentrepreneurs. • Established Hab Usahawan iTEKAD through partnerships with universities, creating a central hub to engage local collaborators and deliver ongoing development and support programmes for customers nationwide. • Enhancing our Shariah-compliant offerings by incorporating sustainability and climate-aligned financial solutions while strengthening integration with traditional financial ecosystems. • Broadening the Islamic capital market to support government funding projects, infrastructure development, and expand our reach into non-Muslim markets. Risks • Increased pressure on profit margins and differentiation challenges due to intensifying competition with conventional and Islamic banks. • Slower adoption rates and limited customer base due to low awareness and understanding of Islamic finance. Opportunities • Providing our customers with more ethical and responsible banking options by diversifying our Shariah-compliant financial products. • Strengthening financial inclusion and ensuring long-term sustainability by expanding our expertise in social finance and VBI. EXPANDING MARKETS FOR ISLAMIC FINANCIAL SERVICES Key Alignments Capitals FC IN Stakeholders CU GR Material Matters SRF CX GGC Strategies SP SR IV CE D Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2024 46 Operating Environment
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