Islamic Fintech Firms Should Go Mainstream

ONE of the growth areas that Islamic financial technology (fintech) companies should capitalize on is to broaden their reach and attract all users — Muslims and non-Muslims — to their platforms.

“This demonstrates the company’s global reach and that it’s not just catering to a segment of the population,” microLEAP founder and CEO Tunku Danny Nasaifuddin Mudzaffar said during a parallel session of the World Halal Business Conference 2021 entitled “Fostering A Robust Islamic Finance Ecosystem Through Digitalisation” last week.

Tunku Danny said microLEAP has both Muslim and non-Muslim investors. He explained that because ethical investments and Islamic principles go hand in hand in Islamic financing, it will reach out to non-Muslims users as well.

In terms of growth plans, he said microLEAP is reaching out to partnerships and also regional expansion, particularly to Indonesia which he views as having a lot of opportunities but also a lot of risks involved.

“Regionally, we want to be strong in Malaysia and the first step for most Islamic fintech is we want to go to Indonesia, it is the largest Muslim population in the world but it is also very fragmented,” he said.

Also commenting on growth areas to capitalize on, Bank Islam Malaysia Bhd CFO of strategic management division Noor Farilla Abdullah said Bank Islam is concentrating on digitalization to drive business sectors.

“Digitalisation is at the core of most of our investments. Bank Islam is committed to being a value-based intermediary; hence we want to enable the nation to produce internationally competitive businesses.

“Halal businesses are the natural sector for us, these are businesses that do good to the environment, are socially responsible, and have high standards of governance. We want to finance their growth and provide liquidity for them to be the regional champions,” she said.

Seeing how philanthropic funds and Islamic social financings such as zakat, sadaqah, and wakaf are deployed to those in need during this pandemic, Bank Islam also focuses on promoting effective wealth circulation.

“Bank Islam has gone a step further by providing micro-financing to enable small entrepreneurs or potential entrepreneurs to get skills and seek capital to start small so that they can be transformed from being a zakat recipient to a zakat giver ultimately,” said Noor Farilla.

Meanwhile, Malaysia Digital Economy Corp (MDEC) director of fintech and Islamic digital economy Ruslena Ramli said MDEC is looking out for the Islamic digital economy and that Islamic fintech and social finance will be featured very strongly.

“We are talking to other different stakeholders as well, as we grow in building this digital economy that can facilitate more tech and fintech players in addressing the problem statements within Islamic banking, whether its takaful or asset management, in helping to see how Malaysia can continue to be at the forefront for Islamic finance,” she added.

Originally published on www.themalaysianreserve.com