For 2024, the global economy is anticipated to grow more slowly, affected by high interest rates and a slowdown in China, the world’s second-largest economy. Despite these pressures, a gradual normalisation of economic conditions is expected in the latter half of 2024, with inflation easing and monetary policies becoming more accommodating. Domestically, Malaysia’s slower GDP growth in 2023 creates a favourable base for 2024, supported by the global tech upcycle, tourism revival, and robust investment approvals. While the first half of 2024 may pose challenges, the second half is expected to see significant growth acceleration, underpinning Bank Islam’s optimistic GDP growth forecast of 4.7%, driven by a rebound in the manufacturing sector and export-oriented growth. Nevertheless, external developments could present risks to these projections. OPERATING ENVIRONMENT (KEY MARKET TRENDS SHAPING OUR BUSINESS) MARKET CONDUCT Providing customers access to unbiased and relevant information to make informed financial decisions suited to their preferences. Potential Impact How We Responded • Balancing transparency with customer privacy protection requires careful consideration and robust data security measures. • Distinguishing itself through transparency and focusing on customers’ needs has the potential to draw in new customers and set Bank Islam apart from its competitors. • Focused on educational resources and tools to empower the customers to make informed decisions on their finance management. • Transitioned towards automated services including robo-advisory services as well as the mechanism to ensure customers protection from unfair or deceptive business practices. Outlook • Increasing emphasis on financial literacy, with customers becoming more digitally savvy and having access to a vast amount of information. • Growing demand for personalised financial services due to the advancements made in AI and data analytics. 45 1 2 3 4 5 6 7 8 9 www.bankislam.com MANAGEMENT DISCUSSION AND ANALYSIS – STRATEGIC REVIEW
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