Islamic banking and fintech

The 3 June Economist article “Catching Up: the race heats up to become a Middle Eastern fintech hub” reports that only 1% of the USD 50 b invested in fintech globally has gone to the MENA. This is despite the pervasive presence of smartphones (at least in parts of the region). The article however cites some competing sites for fintech investment:

  • two accelerators in Cairo, launched to facilitate start ups
  • Abu Dhabi’s “regulatory sandbox” allowing for early testing of products for two years without the requirement of full regulatory compliance
  • Abu Dhabi’s agreement with the Monetary Authority of Singapore to undertake joint fintech products
  • A fintech accelerator in Dubai is now accepting applications
  • Qatar and Bahrain have held fintech conferences

Wamda (a website on regional entrepreneurship) states there were fewer than 20 fintech start-ups in MENA and 105 by 2015. Particular opportunities are remittances from workers abroad, the unbanked, as well as expatriates in the region. 40 of the largest Islamic banks have approved investment of USD15-50 m for digital initiatives.

As the Economist points out “Fintech, especially block chain technologies, ought to be a boon for Islamic finance, because it can streamline transactions between institutions that apply different versions of Sharia law. Islamic-banking users are keen: three out of four say they are ready to look elsewhere for a better digital experience.”

Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: