The global Islamic banking and finance industry continues to go from strength to strength and is expected to experience further growth in the coming years. The Global Islamic Finance Report 2018 expects the global size of the industry to reach US$3 trillion by 2020. ISFIRE had the opportunity to speak with Esam Alkheshnam, CEO of International Turnkey Systems Group (ITS), about the new age in Islamic banking, and ITS’s role in supporting the industry’s progression.
How is fintech shaping up the islamic banking and finance industry?
Fintech is revolutionising the banking landscape the same way Uber disrupted the taxi industry and Airbnb shook up the hospitality sector. In the past few years, fintech has emerged as one of the primary challengers and disruptors of the once-traditional banking industry. Within the Islamic banking and finance industry, fintech is undoubtedly the most significant driver of change in the new Islamic banking era, one that will have considerable social and economic impact across the globe. Fintech encourages financial inclusion, substantially elevate customer banking experience, and improves organisational efficiency. In the area of social development for instance, fintech has ushered in a new paradigm in the design and implementation strategies of financial inclusion. Smartphones for mobile banking and investing services are technologies that are making financial services much more accessible to the general public.
Fintech also has the ability to break down barriers and open doors unhindered by the constraints of geography. Electronic invoicing and factoring, digital banking, smart contracts, blockchain technology, and digital authentication processes are all driving efforts toward more inclusive financial institutions in Islamic banking. But the biggest potential impact of fintech on Islamic banking and finance would be the wider outreach of Islamic financial services, especially in markets where Islamic finance has yet to evolve beyond a concept or where market penetration is still low and have yet to achieve any significant level.
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