Qatar Leads Fintech Innovation in the Region with Advanced Technology

The 9th Islamic Finance Conference, entitled ”Islamic Finance and Challenges of Web 3.0,” commenced at the Sheraton Hotel in Doha yesterday. The conference focused on the growing significance of Islamic Finance worldwide and the impact of Metaverse on the financial sector.

During the conference, the exponential growth of Islamic Finance and the adoption of advanced technology in the financial sector were highlighted as critical factors that have helped Qatar to be ahead of other countries in the GCC region. The event underscored the numerous initiatives the State took to develop a vibrant financial sector in line with its 2030 National Vision.

The Minister of Commerce and Industry, H.E. Sheikh Muhammad bin Hamad bin Qassim Al Thani, emphasized that the financial sector is a vital pillar in Qatar’sQatar’s economy, one of the fastest-growing economies in the region. The Minister attributed this growth to adopting advanced technology and digital transformation, which has paid rich dividends to the State. He noted that the State had made great strides in the digital sphere of the financial sector, helping to put the country on top in the GCC region. The Minister added that the country notched an economic growth rate of four percent, with a budget surplus surpassing QR89bn last year.

H.E. Sheikh Muhammad bin Hamad bin Qassim Al Thani further stated that the State has been resilient to many external shocks and has comfortably withstood global economic challenges during the past years, making it one of the most vibrant economies in the globe. He noted that Qatar had become the world’sworld’s fifth-largest market for Islamic finance and stated that the State would always strive to adopt the best technology that would benefit the financial sector and the economy at large.

Dukhan Bank Chairman, Board of Directors, Sheikh Muhammad bin Hamad bin Jasim Al Thani, stated that technology represents a crucial part of the economy and the transition of the financial sector. He highlighted the significant growth in the quality of services by banks in recent years. However, he noted that there are challenges that may arise when the cooperation relationship turns into competition led by giant technology companies to enter financing operations, provide financial services, and compete with the banking sector, which may lead to confusion in the work of banks and the economic and banking environment.

The General Director of the Directorate of Endowments and The Ministry of Endowments and Islamic Affairs, Sheikh Dr. Khalid bin Muhammad bin Ghanim Al Thani, noted that the world of technology is moving very fast and added that the world has now reached the decade of the virtual world and AI. He emphasized that endowments need scientific research and partnered with the conference to support research and development in the financial sector and its development. He added that this year’syear’s Islamic conference would shed light on the opportunities and challenges as we advance.

The World Bank-USA Director of the Prospects Group, Dr. Ayhan Kose, said that one could say that the cup is half full or half empty, applying that to the global economy today. Many who say the cup is half full see the world economy as showing resilience and on the path to recovery, while those who see it as half empty look at it otherwise.

Dr. Kose stated that the global economy would record the weakest growth of 1.7 percent in 2023 after a long time. The reopening of China, the Euro area growth turnaround, and US consumption growth could have upside growth boosting the global economy this year. However, proper calibration and implementation of monetary and fiscal policy with social protection systems, addressing gender equality, efficient food systems, ending the war in Europe, finding energy solutions, and mitigating climate effects are crucial to driving global economic growth.

Islamic finance refers to providing financial services following Shariah Islamic law and rules, which do not permit receipt and payment of interest, excessive uncertainty, gambling, short sales, or financing activities considered harmful to society. 

Instead, the parties must share the risks and rewards of a business transaction. The transaction must have an economic purpose without undue speculation and not involve exploiting either party. Islamic finance encompasses banking, leasing Sukuk (securities), and equity markets. 

Investment funds, insurance, and microfinance but the banking and Sukuk assets represent about 95 percent of the total Islamic finance assets.