5. Rise of Islamic Finance

Islamic finance is transitioning from a domestic strength to a regional growth engine, supported by expanding cross-border corridors and rising demand for ethical, Shariah-aligned financial products. In 2026, institutions will need to invest in modern Shariah-compliant operating models that can support digital product delivery, ESG-linked offerings, and real-time verification. Growth will depend on the ability to harmonize standards, develop talent, and create platforms that enable interoperability across markets. With Malaysia and Indonesia shaping the next wave of Islamic finance innovation, the sector is poised to expand its influence across ASEAN and beyond.