Brunei to accelerate FinTech and green finance

Deputy Minister of Finance and Economy (Economy) Dato Paduka Seri Awang Haji Khairuddin bin Haji Abdul Hamid delivering his keynote address

BANDAR SERI BEGAWAN (Borneo Bulletin/Asia News Network): Green finance and financial technology (FinTech) can transform the country’s economy and society at large, to be more inclusive, resilient and sustainable, said Deputy Minister of Finance and Economy Khairuddin Abdul Hamid (pic) at the Brunei Economy Programme held at Anggerek Desa Technology Park on Thursday (Aug 11).

“The opportunities that FinTech could offer to advance green finance is tremendous,” said the deputy minister during a keynote address at the event.

“It could help to address the pain points in developing green finance such as requirement of real-time data, complex risk assessment and documentation as well as trustworthiness of the ‘greenness’ of the projects or investments,” he said.

The deputy minister said the topic of sustainability, which includes climate change, is of heightened importance as a global agenda.

With the demand from the global and domestic markets for the alignment towards the Sustainable Development Goals (SDGs), especially in the fields of green finance initiatives, the deputy minister believes it is time for relevant entities to explore how the country could benefit from the industry, in line with the Brunei Vision 2035’s third goal – a dynamic and sustainable economy.

He said the country’s sustainability agenda is closely aligned with the objectives of Maqasid Syariah – to preserve wealth, faith, lives, lineage and intellect.

“Islamic finance, therefore, is a natural fit to spearhead the sustainability agenda and has the potential to play a major role in plugging any gaps towards achieving sustainability goals,” he added.

Khairuddin said Brunei Darussalam is recognised for strong Islamic finance regulations opportunities for Islamic FinTech.

Another area important in supporting sustainability is the development of a sustainable financial sector.

“Its development is paramount as it provides an avenue to channel funds into ‘green’ initiatives thus ‘greening the financial sector’,” said the deputy minister.

One strategic area that the nation is working on is to encourage the development of financing green products such as electric vehicles (EVs) to incentivise the purchase, which could help increase the total share of EVs, while another example would be the issuance of ‘green’ bonds or sukuk to support renewable energy projects such as solar power stations to shift and increase the use of renewable energy.

Meanwhile, the deputy minister said the recently published Asean Taxonomy for Sustainable Finance which serves as a common building block on fostering sustainable finance adoption and provides guidance to attract more investments and financial flows into ‘green’ projects in the region.

The deputy minister also outlined new digital financial products developed to meet the rising demand for convenient and low-cost services, mainly in the areas of digital payment, as well as insurance and remittance, such as DSTPay, ProgresifPAY, MoneyMatch, Beep Digital Solutions and Takaful Brunei Mobile, as well as the establishment of a National Digital Payment Hub (DPH) – a project jointly implemented by Darussalam Assets Sdn Bhd and local banks.

He also mentioned a white paper State of FinTech in Brunei Darussalam – launched in late 2020 – which outlined recommendations to advance the development of the FinTech ecosystem in the country.

Progress has been made to strengthen the FinTech ecosystem including the soon-to-be established FinTech Association.

Meanwhile, Brunei’s entry into the Global Financial Innovation Network could also broaden the partnerships and possibilities for local developers to establish connection with international players and markets, he said.

“However, we are not exempted from roadblocks in our journey towards successfully accomplishing our sustainability and FinTech goals,” said Khairuddin, noting the recent episodes of economic and financial crises stemming from the pandemic and global inflation that have impacted development momentum.

“Despite these challenges, it has shown our ability to break limits and harness our potential to innovate, thus, teaching us to leverage the current crisis as a continuous learning opportunity by building competence and strengthening stakeholder engagements.”