January 9, 2020
As stated in the previous article, Islamic finance is meant to effectively serve close to 2 billion people, covering a combined economic GDP of nearly 10 trillion dollars. With the Islamic world’s demographics being quite young with a median age of 24 years globally (according to Pew Research Center), technology is starting to play a significant role in Islamic finance. With the use of technology to deliver specific sharia-compliant as well as regular financial services, Islamic FinTech will be a key driver for financial inclusion and digitizing of Islamic finance in the coming decade. Though a relatively newer segment of FinTech, there has been a substantial growth in FinTech solutions and the use of digital offerings by Islamic banks and startups globally.
According to the IFN FinTech’s research, there are over 130 Islamic FinTechs globally as of October 2019, spread across major sectors such as Digital Banking, P2P Finance & Crowd Funding, Payments & Remittance, Trade Finance, Personal Finance, Wealth Management, and Blockchain. Indonesia, Malaysia, the UAE, the United Kingdom, and the United States are the major hubs where these startups are based. The number of Islamic FinTechs has steadily increased in the last few years, from 116 in 2017 to 136 in 2019. This trend will only grow as more Islamic finance institutions start undergoing digital transformation and look to partner and work with FinTechs.
To achieve a faster rate of growth, there is a need for more startup incubation and acceleration hubs in the leading centers ...