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Digitisation of #Indonesian Banks

Consulting firm Solidiance launched its new report entitled Digital Evolution in Indonesia's Banking Industry. In this report millennials are projected to account for around 58% of Indonesia's total population by 2027. Indonesia has a population of more than 260 million people and only 36% of the population are connected to financial institutions, leaving in the region 150 million citizens unbanked. The report also noted that digitalization helps provide greater opportunities for banks to seize the market share. The market will be soon occupied with digital-native millenials who prefer to use the new channels available them. The Solidiance report estimated the number of Internet users in Indonesia is expected to explode in the coming years from as low as 35% of the population in 2015 to an estimated 68% in 2020.

#Malaysia's Lead in Shariah #Funds

Malaysia remains a frontrunner in Southeast Asia's Shariah fund market, with $24 billion in Islamic mutual fund assets under management for the year ending May 2017. Global analytics firm Cerulli believes that Malaysia will preserve its pole position in Southeast Asia, while Indonesia will take a longer time to catch up, given the bias toward domestic investments. Malaysia's lead is largely due to its government's support of expertise in regional and Shariah investments. In January 2017, the Malaysian Securities Commission unveiled a five-year Islamic and wealth management blueprint to become an international Islamic finance center. Global firms have been encouraged to set up Islamic units in Malaysia through tax incentives and signing mutual recognition agreements with Dubai, Hong Kong, Ireland, and Luxembourg. The country is also embracing financial technology with new initiatives and regulatory support. Kuala Lumpur-based Farringdon Group recently launched a Robo-adviser service which follows Shariah investment guidelines.

Shariah Compliant #Robo to Launch

#Malaysia's Farringdon Group is about to launch its new Robo-adviser service which follows Shariah investment guidelines. Their new system branded Algebra relies on smart beta trading algorithms to derive its active equity portfolio. It blends the data with fixed interest Exchange Traded Funds (ETF’s) or Sukuk bond funds to derive a risk weighted portfolio suitable for any investor. Its shariah investment strategy is approved by Shariah Scholar Datuk Dr Daud Bakar of Amanie Advisors, the official launch date is set for July 10th 2017. By asking questions online, Algebra can complete a fact find and calculate its clients risk attitude and this cuts out the need for expensive consultants. Together with the Shariah version of this platform Farrington have also built and incorporated a Non-Shariah option.

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