MICROLINK Solutions Bhd (MSB) is hopeful of securing its first client to offer software solutions for Islamic banking services in Indonesia this year, its top official said.
Chief executive officer Peter Yong Kar Seng said the company sees tremendous potential in the republic after setting up office there in mid-2008.
"We are hopeful that this year we can secure something," he told Business Times in an interview.
Apart from its close proximity, Indonesia is the largest Islamic nation in the world but is far behind the curve in terms of Islamic banking penetration.
"We think there is tremendous potential for banks in Indonesia to move into offering Islamic banking services," Yong said.
MSB is an information technology (IT) solutions provider to the financial services sector, but has carved a niche in providing dedicated Islamic banking solutions.
"Indeed, not a day goes by where there are no enquiries from a conventional bank in Indonesia that is starting up a subsidiary offering Islamic banking services," he said.
MSB is exploring ways to offer its solutions on a "on demand basis", unlike in Malaysia where the industry is usually dedicated and not shared.
Yong explained that in Indonesia the central bank has a more relaxed policy since it won't be economically viable for each bank to have a dedicated system due to the country's huge geographical spread.
Hence, each bank and its branches are allowed to rent software from service providers whereby the costs and database among others are outsourced.
"This allows tremendous flexibility for service providers like MSB. We are able to scale very quickly unlike traditionally a dedicated offering that could take six months to a year to set up.
"This is an area that we are exploring in Indonesia and we see tremendous potential," he added.
Riding on its Islamic banking solutions, the company has so far secured two clients in the Middle East and one in Brunei.