Five strategic measures identified, says Labuan financial body
Published on: Monday, October 21, 2019
By: Iffah Dilaney
LABUAN: Labuan International Business Financial Centre (IBFC) will focus on five strategic thrusts which have been identified by Labuan FSA to intensify its business focus on emerging opportunities.Labuan Financial Services Authority (Labuan FSA) Director-General Danial Mah Abdullah (pic) said the regulatory body has identified these strategies for moving forward.ADVERTISEMENT
“Labuan IBFC should not rest on its laurels despite its encouraging statistics and it is imperative for us to intensify our business focus on emerging opportunities and to be sensitive to the changing market demands.
“Therefore, as the international business landscape becomes increasingly competitive, Labuan IBFC must be able to distinguish itself from other international centres moving forward,” he said at the Labuan Annual Industy Dinner on Saturday.
Danial shared that the strategy include enhancing the banking industry.
“As the banking industry is the largest financial sector in Labuan IBFC, we will accord greater regulatory impetus to inject innovation and spur the sector’s growth development.ADVERTISEMENT
“This includes attracting and facilitating the establishments of innovative banking institutions and financial services especially in the digital banking space,” he said.
He said they will also be focused on embracing digital driven businesses as one growth potential which Labuan IBFC is focusing on is FinTech.
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“Labuan IBFC has seen an influx of digital business set ups into the centre with 25 approvals given in 2019 alone which included the nation’s first digital bank and a new digital asset exchange.
“More is in the pipeline as interests keep coming in for Labuan entities to be used to undertake these innovative businesses,” he cited.
To cater for this new business demand, Labuan FSA has put in place key requirements and business guidance in the second half of 2018, he said.
“We are now firming up a more holistic regulatory framework which will be released by end-year to better guide these digital business which include digital banking, virtual currency trading, insuretech and tokenisation.
“We will evolve the licencing requirements and enhance regulations to better suit digital business setups,” he added.
Danial disclosed that another key strategy would be to reinvigorate Labuan IBFC’s product and service offerings.
“This entails rationalising licensing requirements for existing Labuan structures to make them more attractive which includes creating new insurance intermediary licences, and promoting green, social and sustainable (GSS) financing via Labuan sukuk issuances,” he explained.
Another strategic thrust would be to nuture human capital and talents.
“Labuan FSA will continue to collaborate with the market and training providers for talent upskilling and knowledge enrichment in Labuan IBFC.
“With the numerous training events that Labuan FSA had organised over the years, there shall be more in the coming year,” he said.
Finally, Danial said the Labuan IBFC will also be improving its delivery system.
“Labuan FSA will continue to improve its delivery process by leveraging on IT capabilities and technology.
“For example, the current trust officer paper examinations will soon be converted into computer-based to allow for a real-time marking and candidates can receive immediate results.
“The digitisation initiatives that we are planning would also be timely with the rollout of the National Fiberisation & Connectivity Plan for improving the island’s internet infrastructure,” he added.
Meanwhile, in terms of market prospecting, Labuan IBFC’s strategy remains on bridging the Asia economies by leveraging on Labuan’s optimal geo-position.
“It is also in tandem with one of the Budget 2020’s initiatives to promote investment inflows from China.
“This is consistent with Labuan IBFC’s own China Strategy as the Centre’s structures can be used to attract Chinese investors especially prominent financial institutions and firms,” he cited.
Danial said while intensifying its business focus, Labuan FSA will continue to uphold its supervisory and regulatory role to ensure that the soundness and stability of the market are always preserved.
He said higher supervisory oversights and more on-site examinations will be conducted on sectors which have been identified as “high risk” under the Labuan Sectorial Risk Assessment framework.
“This is all necessary to evident our seriousness in addressing AML/CFT matters especially when Malaysia including Labuan will be assessed again by the Financial Action Taskforce (FATF) early next year.
“We need to ensure that Labuan IBFC is ready and demonstrate that measures are in place to preserve our positive ratings of the assessment and maintain Labuan IBFC’s credibility as reputable centre,” he shared.
He said as the Labuan’s financial sector enters its 30th year next year, it needs to be agile and adaptive to international regulatory changes, global competition and technological advancements.
“We are fortunate to be in the fastest-growing region in the world – Asia Pacific – allowing us to grow in tandem with the region, so we should continue to promote our niche sectors that have gained market confidence and international recognition,” he added.
He noted that Labuan IBFC was named the Best Asian Captive Domicile in the Asian Captive Review Awards for 2018 and 2019.
“Against this backdrop, to stay relevant and vibrant, we need the support of all stakeholders. We will continue to collaborate with our stakeholders including the relevant ministries, government agencies, industry players, intermediaries and other service providers to develop the centre further,” he said.
He said the visit by Finance Minister Lim Guan Eng in July 2019 has provided the assurance of governmental support for the development of Labuan IBFC.
“We will certainly do more, and the recent positive media coverage on Labuan is a testament that the centre is still very visible and relevant to the nation,” he said.
Today, Labuan IBFC is home to more than 6,000 active companies which includes top-ranked financial institutions comprising 55 banks, 217 insurance companies, 61 trust companies, more than 300 leasing companies and 43 commodity trading companies.Stay up-to-date by following Daily Express’s Telegram channel.
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Labuan IBFC entities now employ more than 6,000 people, making the IBFC the largest employer compared to other industries in the island.