The Growth Of Sharia-Compliant Products In The FinTech Industry

How demand for Sharia-compliant products is creating huge opportunities for fintech...

For Muslims in the FinTech industry means they can't use conventional finance products and must instead use Sharia-compliant alternatives. Demand for these products is increasing across the globe, but legacy providers have failed to keep up. At the same time, advances in technology have made it cheaper and easier to create Sharia-compliant products. That's creating a huge opportunity for financial technology industry.

We highlight some of the key concepts in Islamic finance, explains Sharia-compliant financial instruments in use, and explores how and why these options are struggling to meet demand. It explains the drivers behind increasing demand for newer products, as well as wider trends enabling the fintech opportunity. Finally, it presents case studies that illustrate the ways fintech is already being used to service the global Islamicfinance industry, and outlines the hurdles fintechs face in making the most of the opportunity.

Among the big picture a demand for Sharia-Compliant Products is Creating a Huge Opportunity for Fintech:

Sharia-compliant financial products are approved by Islamic scholars and meet certain requirements like not offering interest or involving any risk. But the legacy Islamic finance industry hasn't kept up with increasing demand for these products from new demographics and for more modern versions.

That, along with broader technical changes, is creating a huge opportunity for fintech. Some fintech concepts such as P2P lending and robo-advice are well suited to the Islamic market, while the agility of others means they can quickly adapt their services to achieve Sharia compliance.

There are still significant hurdles for fintechs to overcome, particularly in the form of education, marketing, and achieving Sharia certification. Fintechs that partner with a legacy Islamic finance institution will find it easier to overcome these hurdles and achieve success.

The biggest opportunity for fintechs in the Islamic finance market for now is in developed countries where awareness of conventional fintech products is high. In particular, fintechs should look to states with active governmental support for the fintech industry.

The key concepts of Islamic finance and outlines some Sharia-compliant products currently in use.

There are factors that are driving demand for Sharia-compliant products.

A mass growth in the opportunity sector but with hurdles for fintech in the Islamic finance market.

Explores some case studies where fintech is already being used to deliver Sharia-compliant products.

Sharia-compliant financial products are authorized by Islamic scholars and accommodate certain mandate like not charity seductiveness or involving any risk. But the bequest Islamic financial industry hasn’t kept up with augmenting direct for these products from new demographics and for some-more complicated versions.

That, along with broader technical changes, is formulating a outrageous event for fintech. Some fintech concepts such as P2P lending and robo-advice are good matched to a Islamic market, while a lively of others means they can fast adjust their services to achieve Sharia compliance.

There are still poignant hurdles for fintechs to overcome, quite in a form of education, marketing, and achieving Sharia certification. Fintechs that partner with a bequest Islamic financial establishment will find it easier to overcome these hurdles and grasp success.

The biggest event for fintechs in a Islamic financial marketplace for now is in grown countries where recognition of required fintech products is high. In particular, fintechs should demeanour to states with active bureaucratic support for a fintech industry.