FINTECH | Islamic finance digitalization will increase dramatically as spending surges
Professionals believe digitalisation will speed up the adoption of open banking and Islamic finance.
Source: TechSabado file photo
New research with leading Islamic finance professionals is predicting a dramatic increase in the digitalisation of the sector as spending on technology and new digital financial services surges.
The research was conducted by IslamicMarkets.com, a leading platform that provides
access to expert knowledge and financial opportunities, to support the Global Islamic
Finance Forum 2022 (GIFF2022).
The event, themed as ‘Take the Reins’, is organized by the Association of Islamic Banking
and Financial Institutions Malaysia (AIBIM), in partnership with Bank Negara Malaysia (the
Central Bank of Malaysia) and aims to generate an active discourse on the work required
to strengthen Islamic finance’s global leadership position.
The study found more than half (57%) of Islamic finance professionals expect a
dramatic increase in digitalisation over the next three years with another 40%
predicting a slight increase. There is prediction in increased spending and investment by
Islamic finance institutions on technology and building new digital financial services over
the next five years, with 50 percent of Islamic individuals forecasting a dramatic rise and
41 per cent a slight rise. Just 5 per cent predict spending on technology and new digital
financial services will stay the same or fall over the next five years.
Greater digitalisation is central to the growth of open banking, open finance and
embedded finance, the study found, with 88% of Islamic finance professionals
questioned saying adoption will accelerate as a result of increased digitalization.
“Digitalization is on the march in the Islamic finance sector and the research reflects
the impact of increased spending on technology and new digital financial services,” said Arsalaan Ahmed, GIFF2022 chairman and chief executive of Al Rajhi Bank Malaysia. “Increased digitalisation is central to the adoption of open banking, open finance and
embedded finance in Islamic finance and our study shows professionals in the sector are
expecting rapid expansion.”
