Moody’s: Digitization drives Islamic banking


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Digitization and regulatory support are driving the growth of Islamic financial products in Malaysia and Indonesia.

“Due to its high profitability, Islamic banks in Malaysia and Indonesia are investing more in digitization, which will allow the industry to expand at lower cost” said Simon Chen, Moody’s vice president and senior analyst.

Digitization helps banks cut operating costs by streamlining and automating internal processes and reducing the cost of customer acquisition and support. Another advantage of digitization, especially for Islamic banks, is that they could overcome their low physical presence in increasing revenue.

Countries’ regulators, according to Moody’s, not only drive growth, but also steer banks to address emerging environmental, social and corporate governance (ESG) risks while delivering positive growth aspire.