Saudi Chief Central Banker Delivered Opening Speech

Governor of the Saudi Central Bank Dr. Fahad bin Abdullah Almubarak delivered the opening speech of the summit, welcoming the attendees, and expressing the honor of the Saudi Central Bank, to play host to this edition of the summit, falling in this year.

“The summit seeks to focus on the development of the Islamic financial industry and digital transformation, from the perspective of a balance between the ability to benefit from innovation and, at the same time enhance the strength and stability of the financial sector, and that the Islamic financial industry has proven to be able, in a short period, to maintain steady growth, and able as well to spread geographically, as it is, nowadays, present in all continents of the world, he highlighted..”

 “In this context, modern technologies have provided a wide scope for Islamic financial institutions to provide products and solutions and adopt digital transformation, in a way that enhances the experience and satisfaction of their customers, and despite the importance of these multiple advantages, we must realize that they represent a challenge for the regulators that must deal with any risks, he stressed.

They may arise from the use of these technologies, including cybersecurity risks, money laundering and terrorist financing risks and information privacy, he stated..”

Islamic financial industry experienced remarkable developments, at the global level, as it achieved an annual growth of more than 10%, according to the report of the Islamic Financial Services Board for the Year 2021, bringing Islamic finance to about volume to $2.70 trillion, during the Year 2020, from $2.44 trillion in 2019, he drew attention.

 In the midst of the health consequences of the Covid-19 pandemic, that the world witnessed, the industry was able to deal with it effectively and reduce its negative effects, thanks to monetary and financial policies, as a result of financial reforms and precautionary banking legislations, following the global crisis of 2008, which enhanced customer protection, maintaining financial stability in a financially parallel manner, with a robust system for responding to global crises, he commented..

On the most important challenges facing the Islamic financial industry, in the short term, he noted that one of them is the disparity between countries in recovering from the consequences of the Covid-19 pandemic, adding that would emphasize the need for continued cooperation between all actors, including regulatory and legislative bodies, Islamic financial institutions, coordination and integration between fiscal and monetary policies..

Regarding the Islamic financial industry, in the Kingdom, he explained that it has witnessed developments, during the past year that brought the Kingdom to the global lead, in terms of the volume of financial assets that comply with Islamic Sharia, in various financial and commercial sectors.

The total assets of Islamic financial services, in the interrelated sectors of banking, sukuk, insurance and investment funds, in the Kingdom, amounted to nearly $800 billion, which represents approximately 28% of the total Islamic financial assets, globally, according to the report of the Islamic Financial Services Board, issued this year.

The main indicators of the Islamic banking sector, in the Kingdom, witnessed rapid growth, as the total Sharia-compliant financing, amounted to more than $430 billion, while the total volume of Sharia-compliant deposits, amounted to $433 billion, by the end of the second quarter of this year, he explained.

Growth and such an advanced rank in the Islamic financial industry, in the Kingdom, would achieve the objectives of the Kingdom’s Vision 2030, under the guidance and follow-up of the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud and HRH Crown Prince, he commented.

For example, but not strictly limited to, the Islamic financial industry contributes to achieving a number of the vision’s goals, such as providing a life thriving in a healthy environment, by financing a green and sustainable economy, enabling social responsibility, through the endowment sector, developing and diversifying the economy, by developing the financial market, in general, and the stock exchange, in particular, in addition to the bond and debt market, and increasing employment rates, through participatory financing solutions and supporting small and medium-sized enterprises, he remarked..

Expressing his pride in the fact that the Islamic financial industry is part of the global financial system; given its wide geographical spread and its tangible quantitative and qualitative development, across the global financial markets, he called for benefiting as much as possible from the technical solutions, provided in an unprecedented way by the financial technology sector, so that Islamic finance benefits from them to increase financial inclusions and provide act.

Regarding the summit’s agenda, Al Mubarak said: The proceedings of this summit will discuss financial technology, its role in Islamic finance, and the associated opportunities, challenges and regulatory policies also will be revisited.

At the conclusion of his speech, he invited the audience to review the joint report of the Islamic Financial Services Board, which was issued to coincide with this global occasion..