This article is produced and sponsored by New World Group. It was first published in the Global Islamic Fintech Report 2021 produced by DinarStandard and Elipses. The report can be downloaded from here.
The Islamic Finance ecosystem needs to undergo its own disruption for it to truly compete with the conventional markets.
This means that Islamic Finance must strive to become an outward looking industry - with a global appeal transcending borders - that presents unique solutions for real world problems. The potential for Islamic Fintech is immense as the world’s next great success story; it is a young industry with huge, profitable opportunities within untapped emerging and frontier markets.
Islamic Fintech can act as an enabler to growth and development, where the fastest growing major economies in the world are home to 1bn of the world’s 1.8bn Muslims. Within these economies, we currently see a dislocation between conventional markets and the broader Islamic ecosphere at large. This presents tremendous uplift opportunity for proven industry-wide model ecosystems – like we have seen with Tencent – to be developed for the Islamic ecosphere, incorporating finance, education and healthcare among others.
In this age of disruption and digitisation, the Islamic Finance industry must close this gap with the conventional markets by deploying widely smart, efficient and strategic capital towards robust and scalable businesses, led by driven and able entrepreneurs. The industry should place emphasis on businesses operating with a profit and growth mindset – where operational flexibility is underpinned by experienced, capable and aligned management teams that capitalise on the growth supply chain; from origination to execution to value realisation.
To date, a lack of access to capital, a wider spread between the rich and poor, disconnected markets and the over-servicing of high net worth individuals versus the larger customer base has rendered Islamic Finance as an insular and limited industry. The leaders of the Islamic financial services industry must do more to nurture the innovators and disruptors of tomorrow as has been done with their conventional counterparts. We must back the changemakers of our generation, fueled by passion and purpose to build Islamic Fintechs for the entirety of the world’s unbanked, uninvested and uninsured, and benefitting traditional Islamic Finance consumers in the process.
It is only with an inclusive and well-rounded approach will we be able to tap the opportunities present across diverse industry sectors where Islamic Finance and Islamic Fintechs can play a role in bettering the lives of millions around the world.
Copyright Global Islamic Fintech Report 2021