CLIMATE CHANGE & SUSTAINABILITY ADVANCING THE DIGITALISATION OF THE FINANCIAL SECTOR Growing demand for green financing options along with the mandate for Malaysian financial institutions to adopt TCFD recommendations by 2024. Transforming operations and services through technology improves efficiency and personalisation while also posing new security challenges. Potential Impact Potential Impact How We Responded How We Responded • Redirecting investment to progressively allocate capital from carbon-intensive industries towards more environmentally friendly or sustainable sectors. • Enhancing transparency and disclosure requirements with a focus on environmental considerations, alongside financial and climate resiliency. • Cultivating an environment conducive to technological innovation by prioritising and supporting greater use of technology such as machine learning and AI. • Enhancing product offerings and service delivery channels to ensure a streamlined customer journey and greater customer satisfaction. • Reassessing the rationalisation of physical product and channel offerings, ensuring their continued relevance to customers’ needs. • Adopting practices that enable us to be agile and respond quickly to changing customer demands. • Improving the customer proposition by exploring new opportunities in digital business. • Developed reports and disclosures in compliance with the latest regulatory standards and enhanced climate risk monitoring. • Explored the conversion of sukuk programmes to align with ESG principles for potential issuance of Bank Islam’s first Green Sukuk. • Prioritised supply chain management to embed ESG and minimising environmental footprint. • Implemented digital upskilling programmes to keep the workforce competitive and current in the dynamic digital financial sector. • Introduced a digital onboarding process for customers, eliminating the need for physical branch visits. • Prioritised technology resilience and platform development, leading to a significant reduction in critical incidents reported. Outlook • Stricter reporting and transparency are required from institutions. • Need for financial institutions to integrate sustainable practices and apply the use of advanced financial technologies for ESG data management. Outlook • Growing digital comfort widens Bank Islam’s consumer base but demands consistent digital accessibility and userfriendliness in product updates. • The combination of Islamic finance and digital technology provides an opportunity for Bank Islam to lead in Shariahcompliant digital financial solutions. • Rising dependence on digital technology increases the risk of cyberattacks; Bank Islam must prioritise security measures and cyber awareness to safeguard customer data and uphold trust. 46 Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2023 Operating Environment
RkJQdWJsaXNoZXIy NDgzMzc=