FIN4245_Individual Assignment by Soh Shi Qian https://padlet.com/i19017524/d63h2ld8xb2nmwex en-us 2022-09-14 09:54:40 UTC 2025-11-09 18:22:09 UTC hello@padlet.com The digital transformation of Islamic Banking i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2296191821 2022-09-14 11:50:47 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2296191821 What is the digital transformation in banking? i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2296214928 Digital transformation in banking is a process that the bank largely entails the shift to offering online and digital services as well as the massive number of backend changes required to support this transformation (Everfi, n.d.)]]> 2022-09-14 12:09:39 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2296214928 i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2296289481 People nowadays are more dependent on using the internet and mobile technology. According to Kmeid (2017), millennials are less likely to seek out banking services in physical branches than previous generations. Using mobile wallets and social media platforms, they conduct banking transactions without compromising privacy or security, which leaves a digital footprint. ]]> 2022-09-14 12:56:52 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2296289481 Technology Crime i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2302219582 If the Islamic banks do have not many experiences in digital transformation, it may be a lot of technology crime problems caused. In fact, technology crime is the most tricky problem that is faced by most banks not only Islamic banks but also other conventional banks. Online crime activities such as wiretapping, burglary, and cybercrime in financial transactions have frequently occurred in our life and these activities made the customers afraid to use the digital platform to make the online transaction (Baidhowi, 2018). ]]> 2022-09-19 03:00:11 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2302219582 The Challenge of Digital Transformation in Islamic Bank i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2307804107 2022-09-22 01:13:43 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2307804107 i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2309986215 Digitalization will help Islamic banks become more efficient in order to reduce human errors and build customer loyalty (Iqbal, n.d.). This is because when Islamic Bank is digitalized, the accuracy of the banking process will increase. Digitalization can also help to shorten the process of applying for a loan so the customers can immediately enjoy the credit and facilities that have been promised (Baidhowi, 2018). Therefore, the satisfaction of the customers will be maximized and they will complain too much to the customer services of the banks. ]]> 2022-09-23 05:47:59 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2309986215 Lack of Human Resources i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2312885503 According to the IFSB survey, there are 57% of respondents agree on there is a lack of human resources to carry out the digitalization of Islamic Bank (Zahra, 2022).

Innovation cannot be successful without human capital development. Therefore, if there is a lack of human resources in the digital transformation of Islamic Banks, it cannot be successfully transformed digitally because digitalization needs a high professionality and knowledge in the digital areas to make sure the security of the digital platform is guaranteed. Domain experts and highly specialized human capital are required for the digital transformation process. The automation of most banking operations, for example, would call for a new competency model in the human capital strategy of the IBs (Asafa, 2021).
]]> 2022-09-26 03:14:00 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2312885503 Legacy Infrastructure and Technologies i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2312887863 There are 72% of respondents agree on that legacy infrastructure and technologies will affect the digitalization of Islamic Bank based on the IFSB survey (Zahra, 2022).

Using legacy technology infrastructure to cope with the rate and speed of technological transformation may cause Islamic Banks concerns about mitigating operational risks (Baidhowi, 2018). Islamic Banks that still rely on outdated legacy infrastructure, outdated applications, siloed data platforms, an overextended branch network, disparate data sources, and rigid internal operations and cultures will be under even more pressure (Asafa, 2021).]]> 2022-09-26 03:16:15 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2312887863 i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2313070408 Digitalization can also bring convenience to the customers to save their time because they do not need to queue for a long time to solve their banking process such as opening a banking account, transferring a large amount of money, paying a credit card loan or changing the transaction phone number (Strohm, 2021). 

Digitalization has benefitted customers by facilitating cashless transactions (HCLTech, n.d.). Therefore, the customer can store less cash in hand and they can make transactions online anytime and everywhere (Baidhowi, 2018). ]]> 2022-09-26 06:14:49 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2313070408 The Benefits of the Digitalization of Islamic Bank i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2313082147 2022-09-26 06:25:18 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2313082147 Time Consuming Process i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2313643507 Digitalization in Islamic banks is a time-consuming process (Iqbal, n.d.). It spends a long time to adapt, improve and enhance. It is difficult to transform faster into digital because Islamic banks need time to train their employees to be familiar with the system. 

Moreover, the reason that digitalization is a time-consuming process is that Islamic banks need complete planning to have further growth in the digital sector. If they have not planned, they may not know what they need to do for the next step and all the effort is in vain. Therefore, Islamic banks need to have a sufficient preparation to transform themselves into digital.]]> 2022-09-26 13:27:36 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2313643507 The Digital Transformation of Islamic Banks in the World i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2313711082 According to the survey data from IFSB (2020), there are 13% of Islamic banks completely transformed to digital during pre-Covid-19 and 4% of Islamic banks completely transformed to digital during the Covid-19 pandemic and there are 77% of Islamic banks still in the progress of digitalization. ]]> 2022-09-26 14:01:30 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2313711082 i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2315559183 Digitalization can also increase the competitiveness of Islamic banks among financial institutions (Kmeid, 2017). The World Islamic Banking Competitiveness Report 2016 has shown that Islamic banks have lower customer penetration in digital banking services compared to conventional banks. 

When digital is applied in Islamic banks, automation, blockchain technology and electronic contracts will make banking faster and easier. Islamic banks can provide their customers with better services and no need to worry about losing out to the established competition (Iqbal, n.d.).]]> 2022-09-27 13:22:59 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2315559183 i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2315579720 Digitization has brought banking to the doorstep of the customer. Services include access to financials, instant viewing of transactions and statements of account, payments, funds transfers, and end-to-end loan management.]]> 2022-09-27 13:32:41 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2315579720 Malware i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2316895449 Malware is the short form of malicious software and is a blanket term for viruses, worms, trojans and other harmful computer programs (Fruhlinger, 2019). Hackers use malware to wreak destruction and gain access to sensitive information.

In online banking, the Banker Trojan is a type of malware that hackers use to gain access to steal the financial information of the users; the hacker will use the spoofed website of a financial institution to get the data of the users (Hayes, 2022). ]]> 2022-09-28 06:06:38 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2316895449 Conclusion i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2318417712 In a nutshell, I encourage the Islamic Banks in Malaysia to transform themselves into digital to make them competitive with other conventional banks that are good at digital. Digital transformation in Islamic banks can also help them to build customer loyalty because digital transformation in Islamic banks will bring convenience to customers such as they can make transactions anywhere and anytime. Besides, the regulators of the banks need to also be aware of potential new risks that pose a threat to digital Islamic banking, such as data privacy, cyber security, consumer protection and others (Fong, 2022). I hope that the Islamic Banks in Malaysia can grow in the digital sector in the future to lead them to become the world well-known Islamic Banks and can be listed in the Global Finance’s World’s Best Islamic Financial Institutions. ]]> 2022-09-29 00:22:06 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2318417712 Reference i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2319095100 1. Vincent, F., 2022. How Malaysia’s Oldest Islamic Bank Is Reinventing Itself Against the Wave of Digibanks. Available at: https://fintechnews.my/31836/virtual-banking/how-malaysias-oldest-islamic-bank-is-reinventing-itself-against-the-wave-of-digibanks/ [Accessed: 25 September 2022]

2. Zahra, 2022. Digital Transformation in Islamic Banking. Available at: https://feb.ugm.ac.id/en/news/3541-digital-transformation-in-islamic-banking#:~:text=Islamic%20bankings%20tend%20to%20carry,and%20adapt%20to%20existing%20conditions. [Accessed: 25 September 2022]

3. Everfi, n.d. What Does Digital Transformation in Banking Really Mean? Available at: https://everfi.com/blog/financial-education/what-does-digital-transformation-in-banking-mean/ [Accessed: 25 September 2022]

4. Dauda, A, A., 2020. IFSB Working Paper Series. Available at: https://www.ifsb.org/download.php id=5161&lang=English&pg=/index.php [Accessed: 25 September 2022]

5. Rosie, K., 2017. Why Islamic banks must commit to digitalization. Available at: https://www.bobsguide.com/articles/why-islamic-banks-must-commit-to-digitalization/ [Accessed: 25 September 2022]

6. Josh, F., 2019. Malware explained: How to prevent, detect and recover from it. Available at: https://www.csoonline.com/article/3295877/what-is-malware-viruses-worms-trojans-and-beyond.html [Accessed: 25 September 2022]

7. Mitch, S., 2021. 5 Benefits Of Digital Banking. Available at: https://www.forbes.com/advisor/banking/benefits-of-digital-banking/ [Accessed: 27 September 2022]

8. Raheel, I., n.d. How Islamic Banks can capitalize on Digital to Drive Growth. Available at: https://www.codebtech.com/how-islamic-banks-can-capitalize-on-digital-to-drive-growth/ [Accessed: 28 September 2022]

9. HCLTech, n.d. What are the advantages of digitalization in banking? Available at: https://www.hcltech.com/technology-qa/what-are-the-advantages-of-digitalization-in-banking [Accessed: 30 September 2022]

10. Adam, H.,2022. Banker Trojan. Available at: https://www.investopedia.com/terms/b/banker-trojan.asp#:~:text=A%20banker%20Trojan%20is%20a%20piece%20of%20malware%20that%20attempts,client%20data%20to%20the%20attacker. [Accessed: 30 September 2022]

11. Baidhowi, 2018. Sharia Banking Opportunities and Challenges in the Digital Era Available at: https://www.atlantis-press.com/article/25903159.pdf [Accessed: 30 September 2022]

12. Abi, T, T., 2021. What is Cybersecurity Risk? A Thorough Definition. Available at: https://www.upguard.com/blog/cybersecurity-risk#:~:text=Cybersecurity%20risk%20is%20the%20probability,or%20reputation%20of%20an%20organization. [Accessed: 30 September 2022]

13. Technode Global, 2022. Malaysia's Bank Islam launches digital banking app. Available at: https://technode.global/2022/07/18/malaysias-bank-islam-launches-digital-banking-app/ [Accessed: 1 October 2022]

14. Mohammad, B., A., 2021. The Best Digital Banks in Malaysia. Available at: https://www.trustedmalaysia.com/best-digital-banks-malaysia/ [Accessed: 1 October 2022]]]> 2022-09-29 09:55:51 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2319095100 The Way that the Oldest Islamic Bank in Malaysia Reinventing Itself Against the Wave of Digital Banks. i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2325510186 The CEO of Malaysia's oldest Islamic bank, Bank Islam, Muazzam Mohamed has shared how Bank Islam reinvents in the wave of digital banks. 
1. Strengthening their Digital Core
2. Digital Banking Spinoff
3. Leveraging on Strategic Partnerships
4. Driving Inclusion with Digital Not Exclusion
]]> 2022-10-04 11:46:49 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2325510186 Strengthening their Digital Core i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2325901460 A blueprint from 2022 to 2025 has been released by Bank Islam, which includes significant investments in the bank's IT capabilities (Fong, 2022). 

The blueprint focuses on: 
1. The establishment of an IT architecture that is resilient 
2. The acquisition of skills in areas such as machine learning, artificial intelligence, and data analytics
3. Developing new approaches

By strengthening the digital core of the bank, they can make sure that the security of the digital platform and the privacy of the users can be assured. Not only that, but it can also help Bank Islam to retain potential clients and attract more new clients to enjoy the services given by the bank. Bank Islam can also come out with a new strategy to improve the bank itself in the digital sector. ]]> 2022-10-04 15:07:07 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2325901460 Digital Banking Spinoff i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2325925320 To lay the foundation for a fully digital bank and explore uncharted territories, Bank Islam established the Centre of Digital Experience (CDX) in 2021; A full launch of the new digital bank, Be U, is scheduled for mid-July, with downloads available in the Apple App Store and Google Playstore (Fong, 2022). 

Rolling out the new digital bank, Be U, is convenient for customers because the customers can use the digital application anywhere and anytime. ]]> 2022-10-04 15:19:12 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2325925320 Leveraging on Strategic Partnerships i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2325926128 The CEO of Bank Islam, Muazzam Mohamed said "The digital transformation is a journey, not a destination." Therefore, it is important to form a partnership with FinTech and also technology vendors; To accelerate its digital transformation journey, Bank Islam partnered with TM One in 2021  (Fong, 2022).

Bank Islam can cooperate with other organizations to strengthen the digital banking position of the bank by learning and developing with other organizations which are good at technology. ]]> 2022-10-04 15:19:38 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2325926128 i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2327777100 In order to reduce operational costs and marketing costs for Islamic banks, digitization can help them collaborate with financial technology service providers to provide banking products to the public, which will make them more economical for operational costs and marketing costs (Baidhowi, 2018). ]]> 2022-10-05 15:12:31 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2327777100 Cyber Security Risk i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2327844482 Cyber security risk is the main risk that will be faced by the digitalization of Islamic Banking (Zahra, 2022). This is because there are a lot of cyber security cases that occurred during these years.

Cybersecurity Risk is the probability of exposure or loss resulting from a cyber-attack or data breach on your organization (Tunggal, 2022). In the other words, cybersecurity risk is the potential loss or harm related to technical infrastructure, use of technology or reputation of an organization.  ]]> 2022-10-05 15:46:54 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2327844482 Bank Islam Malaysia Berhad and its platform, Be U. i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2328876995 Be U is a fully cloud-native digital banking proposition. The statement claims that the new app facilitates seamless banking transactions, bypassing the inconvenience of visiting a branch, thus broadening financial inclusion among digital-native, younger generations (Technode Global, 2022).

Using Mambu Digital Core as its technology backbone, Be U is hosted on the Amazon Web Service (AWS) cloud; With zero legacies, the app is able to meet customers' needs quickly (Technode Global, 2022).

Users can enjoy a curated, user-friendly and personalized banking experience by leveraging Be U's cloud-based advantage (Technode Global, 2022).]]> 2022-10-06 07:02:06 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2328876995 CIMB Bank Berhad and its platform, CIMB Clicks. i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2329005959 CIMB Clicks is the digital banking service platform offered by CIMB Bank Berhad for their current cardholders. The users can use the platform to check their account balance, view transaction history, transfer money, purchase online, and pay bills and loans. On the other hand, this platform can also help the users can invest in certain investment platforms and can ensure that the investment platforms are safe and secured from malware or hacking (Amir, 2021).]]> 2022-10-06 08:48:08 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2329005959 i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2329060498 2022-10-06 09:30:11 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2329060498 Driving Inclusion with Digital Not Exclusion i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2329062585 Although the inclusion of financial services through digital solutions is all the rage, it is still the digital divide exists. Therefore, Bank Islam considers financial inclusion to be the most important issue to ensure that the underbanked and unbanked have equal access to financial services (Fong, 2022). 

Bank Islam not only needs to take care of digital users but also face-to-face service users. This is because some people are not friendly with digital and they will worry about cybersecurity issues and so on.]]> 2022-10-06 09:31:45 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2329062585 i19017524 https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2329500760 Name: Soh Shi Qian
Student ID: I19017524
Section: 8FN1
Program: BBUS Finance
Course: FIN4245 Islamic Capital Markets
Title: The Digital Transformation of Islamic Banks]]> 2022-10-06 14:36:34 UTC https://padlet.com/i19017524/d63h2ld8xb2nmwex/wish/2329500760