Financial technology has been there in both developed and emerging economies since last few years aiming to target 1.8 Billion Muslims around the globe. Fintech is focused on offering digital technology enabled financial services anywhere, anytime through any device. The use of new tools and technologies in the finance domain has also resulted in introducing new business models for all channels such as B2C, B2B, B2B2C etc. The remaining part of this article focuses on the Islamic fintech that enables Sharia-compliant businesses to offering Islamic finance services by using emerging technologies to reach their customers.
What is Islamic Fintech?
Islamic fintech is not different from a widely used fintech term except it focuses on the product and services that are based on shariah-compliant principles. Such as Islamic finance prohibits the use of interest payments and also investing in any businesses that do not use ethical practices. Therefore Islamic fintech is making use of the digital technologies such as KYC/AML, Machine Learning, AI, Big Data, Block-chain etc to deliver Islamic finance products.
The financial technology has helped to improve the existing long-running business processes, integrating multiple systems, solving complex business problems in fraction of time, providing Users access to the financial services through the mobile devices and offering highly streamlined user experience. Fintech has enabled cross-border transactions, enabling Users to invest in global equities, free movement of the money in any part of the world and a matter of minutes is a dream come true. Fintech also helped various sectors and industries to gain access to the financial services through a native user experience. Open-banking has enabled anyone to offer banking services to their own customers through their own brand name. Another value addition by Fintech is its focus on the Millennial whose expectations are different than traditional customer using the financial services.
Islamic Finance Domains served by Fintech
– Sharia-compliant Digital Banking
– Sharia-compliant investment products such as Mutual Funds, ETFs and Bonds
– Sharia-compliant financial advisory
– Sharia-compliant crowd-funding
– Sharia-compliant P2P payments or business financing
– Sharia-compliant Remittance & FX
Islamic Fintech Startups working in the Emerging Economies
As-Sidq is an Islamic Trading Platform based in Malaysia. This is the only sharia-compliant trading platform in Malaysia that uses a fintech platform to deliver islamic financing.
United Arab Emirates
1- Wahed Invest
Wahed Invest is originally a US based firm that works as a halal digital investment platform. Investors can invest into halal equities and assets with the minimum capital amount when paying very small fee.
1- Haseed Investing
Haseed Investing is a Robo Advisory Platform that will offer automated investment services to the Millenial consumers. It is yet working in the sandbox environment provisioned by the Regulator.
2- Wahed Capital
Wahed Capital is a global fully automated Robo Advisory platform that is also testing its services in the Sandbox environment provisioned by the Regulator.
Yielders is a UK’s Islamic FinTech crowdfunding platform which is also regulated by the Financial Conduct Authority (FCA). Yielders works on Sharia compliant principles and deals with the real estate assets such as property market.