Doha: The Fintechs in Qatar, Malaysia and UAE are gearing towards export market and are launching solutions that are being used domestically and globally. The Fintech hubs in these countries are promoting the development, mentoring, and guiding innovators in the streamlining of business models within the Islamic Fintech, said an expert at the Qatar Fintech Summit recently.
Hamid Rashid (pictured), Founder of Finterra, a Malaysian fintech company that specialises in blockchain solutions for Islamic social finance shed light on the topic of ‘The Future of Islamic Fintech’.
Qatar is among top ten countries in the Fintech market according to Global Islamic FinTech Report 2021. The GIFT Index of 64 key Islamic Fintech markets show OIC countries dominating in top 10 while non-OIC countries dominated next 20. The Islamic Fintech market size in the OIC countries was $49bn in 2020 and is projected to grow at 21 percent CAGR to $128bn by 2025.
Rashid said, “The top 20 countries that are recognised in contribution towards Islamic Fintech with top country being Malaysia followed by Saudi Arabia, UAE, Indonesia. Qatar is one of the top ten countries, one of the reasons that Islamic Fintech Industry is growing so fast is because in the last two years Islamic Fintech hubs have been created and one of the recognised Islamic hubs is the Qatar Islamic Fintech hub that is promoting Islamic finance very widely all over the world as it is launching solutions globally and not just locally.”
On OIC hubs opportunities he noted, while Malaysia leads the maturity model Saudi Arabia, Pakistan, Indonesia, Qatar, and Kuwait are exciting hubs that should be on the investors’ horizons.
He said, “For Fintechs to start off there is always a technology and industry collaboration where financial institutions are collaborating with Fintechs to pilot a specific solution. We are seeing such industry innovation collaborations in Malaysia, Singapore, UAE and Qatar where certain Islamic banks are partnering with Fintechs to pilot their solutions. We are seeing more inclusion of technologies like business intelligence, blockchain, tokenization, smart contracts, and AI.”
According to Islamic Finance network research organization, 255 Islamic Fintechs have been registered and recognised in operation globally whether it is cryptocurrency and block chain, lending or crowd investment, they have been segmented. Raising funds, deposits and lending, wealth management, payments and alternative finance are leading categories accounting for 77 percent of Islamic Fintech firms.
He discussed about the state of Islamic Fintech industry and how it has evolved in the last five years and the outlook for it in next three years, highlighting the pandemic was a blessing in disguise for the Islamic Fintech space as the new rules forced the users, innovators, and the industry into changing their behaviour. Under the new norm we can acquire every service online, he said.
“For the first time in 2020 because of COVID digitisation was put under litmus test. A lot of banks and established financial institutions felt their system was not up to date and they were not able to grasp the attention of users. This is where Fintech got the acceleration that innovators, and founders were able to create new revolutionary applications to fill those gaps. Fintechs are here to service, compete and create innovation in the financial services industry and space,” he added.
He said, as we brace ourselves for what the World Bank is forecasting to be the worst recession since the second World War, this year the Islamic fintech sector may be one of the few that could stand to gain more rather than lose out from the crisis.
