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(October 31, 2024 – Dubai, UAE): The Islamic Fintech sector is rapidly evolving, reshaping financial landscapes by blending technology with Shariah-compliant financial services. As digital platforms and innovative tools gain traction globally, Islamic Fintech stands out as a vital force for economic inclusion, offering ethical and inclusive financial solutions to underbanked and unbanked populations across both Muslim and non-Muslim regions.
Currently, the 512 Islamic Fintech companies worldwide are segmented into several categories, reflecting the industry’s diversity and wide-ranging capabilities. Key categories include 72 companies focused on P2P, Payments, Remittance, and FX; 56 companies in Trading and Investment; 59 in Robo Advisor AI and Metaverse; 65 in Neo, Digital, and Challenger Banking; 58 in Crowdfunding; 44 in Blockchain, NFT, Cryptocurrencies, and CBDC; 33 in Islamic Enablers, Data, and Analytics; 109 in Personal Finance and Alternative Finance; and 16 in Taka tech and Banca Takaful. These categories illustrate the breadth of Islamic fintech and its dedication to providing comprehensive, Shariah-compliant financial services that cater to the unique needs of consumers worldwide. Islamic fintech stands as a bridge, connecting traditional finance with digital innovations that emphasize ethics, transparency, and inclusivity.
A recent report by Dinar Standard highlights the booming nature of this sector, showing that the global Islamic fintech market size reached USD 138 billion in 2022/23. It is projected to expand further at a compound annual growth rate (CAGR) of 17.3%, aiming to hit USD 306 billion by 2027—a rate significantly higher than the conventional fintech industry’s CAGR of 12.3%
Finance” sector holding the largest volume at 224 companies, followed by “Save & Invest” with 103, “Give & Protect” at 31, and “Other” at 59. This categorization reflects the sector’s strong foundation in financial services, with increasing diversification across various financial solutions. Within the top sub-sectors, “Alternative Finance” leads with 64 companies, indicating high demand for crowdfunding and peer-to-peer lending. “Payment” services follow closely with 63 companies, demonstrating significant activity in digital payment solutions. The “Raising Funds” category, at 62 companies, shows growing interest in capital-raising mechanisms, while “Wealth Management” includes 57 companies focusing on Shariah-compliant investments. “Deposit & Lending” records 49 companies, showing the rise of Islamic banking solutions worldwide.
During the Money 20/20 event meetings and various dialogues, Mr. Zubair Mughal, the CEO of Alhuda CIBE, emphasized the transformative potential of Islamic fintech, stating, “The Islamic fintech industry is poised to reshape the future of finance by offering sustainable and inclusive financial solutions. This industry enables ethical innovation across sectors such as alternative finance, Blockchain, crowdfunding, and digital banking, enhancing financial inclusion while adhering to Shariah principles.”
Mr. Zubair Mughal further emphasized, “Islamic fintech is not only a financial solution; it is a bridge to a more inclusive economy. By combining ethical standards with technological advancements, we can create opportunities that extend beyond borders, foster entrepreneurship, and promote responsible investment.”
To support this industry’s growth, AlHuda CIBE has established a department specializing in Islamic fintech that provides comprehensive consultancy and Shariah advisory services for financial institutions and start-ups looking to develop Shariah-compliant fintech solutions. This department offers support in areas such as blockchain, digital banking, cryptocurrency, AI-driven robo-advisory, central bank digital currencies (CBDCs), regtech, and insurtech. With a focus on innovation and ethical financial solutions, AlHuda CIBE helps institutions build secure, efficient, and compliant Islamic fintech products, empowering them to thrive in a rapidly evolving digital landscape.
In further efforts to foster industry growth and collaboration, AlHuda CIBE is organizing the Global Islamic FinTech Forum 2024 on December 9, 2024, at the Dusit Thani Hotel in Dubai, UAE. This event will bring together industry experts, innovators, and stakeholders from around the world to discuss key trends, challenges, and opportunities in the Islamic fintech sector. The forum aims to serve as a platform for networking, knowledge-sharing, and developing new strategic partnerships, strengthening the Islamic fintech ecosystem at a global level.
