In 2016, AMBD published the Brunei Darussalam Financial Sector Blueprint 2016-2025 (FSBP) that outlines the framework and measures to develop the financial sector.
The FSBP identifies five key pillars that form critical components of a sustainable financial ecosystem, including competitive and innovative financial insti- tutions and services. An area that Brunei views as a key driver of growth within the financial services sector is Islamic finance.
In the last few years, Brunei’s Islamic finance sector has seen significant growth. In the banking sector, as of Q2 2017, Islamic banking assets account for 61.8 per cent of the total market share of assets (BND17.3 million) while in the capital market sector, the share of the Islamic fund market expanded from 31 per cent in Q2 2015 to 50 per cent in Q2 2017.
Brunei reached yet another milestone with the coun- try attaining a spot among the top 10 performing Islamic finance markets in the ICD-Thomson Reuters Islamic Finance Development Report 2017.
The Islamic Finance Development Indicator provides rankings and profiles for different Islamic finance markets around the world, drawing on instrumental factors grouped into five broad areas of develop- ment as the main indicators, namely Quantitative Development (Islamic Banking, Takaful, Other Islamic Financial Institutions, Sukuk and Islamic Funds), Knowledge (Education and Research), Governance (Regulations, Syariah Governance and Corporate Governance), Corporate Social Responsibility (CSR Activities and CSR Funds Disbursal) as well as Awareness (Seminar, News and Conferences).
There have been vast improvements in Islamic finance, which include the launching of the Brunei Darussalam Islamic Finance website (www.bdif. com.bn) and smartphone application, both of which serve as a gateway to Brunei’s Islamic finance, pro- viding information on its comprehensive end-to-end regulation, the market players and their products, the people who drive this development and the education and training available for continuous pro- fessional development.
These are some of Brunei’s initiatives that contrib- uted to the 410 per cent increase in the Awareness Indicator to 51 points, from 10 points in 2016, the report noted.
The country’s other significant development is in the Knowledge Indicator, which increased by 154 per cent from 22 to 56 points. The report attributed this to the involvement of higher education institutions and Islamic finance institutions in supporting Islamic finance activities in Brunei.
Moving forward, the FSBP outlines strategies that will elevate the reputation and quality of Islamic finance in Brunei. These include policy directions in developing a secondary market for Government Sukuk through a securities exchange and providing institutional and retail investors with alternative investment opportunities.
It also aims to develop a Syariah Governance Framework to help ensure that the structure, processes, products and services of Islamic financial institutions are in accordance with Syariah principles.
The use of alternative distribution channels includ- ing the use of technology in improving efficiency and access to takaful products and services are also being investigated, while structuring the fund management industry around core propositions that leverage Brunei’s competitive advantages such as Islamic Fund Hub offering Syariah Compliant Products and Sustainable are another way for the country to move forward.
It is also hoped more responsible and impact invest- ing can be encouraged as well as introducing more innovative Syariah compliant financial products and services, to meet the more diverse global demands for Syariah-compliant financial institutions and finally to cultivate local talent and expanding the pool of Islamic scholars so that there is an orderly succession planning.
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