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Professionals believe digitalisation will speed up the adoption of open banking and Islamic finance
New research* with leading Islamic finance professionals is predicting a dramatic increase in the digitalisation of the sector as spending on technology and new digital financial services surges.
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The research was conducted by IslamicMarkets.com, a leading platform that provides access to expert knowledge and financial opportunities, to support the Global Islamic Finance Forum 2022 (GIFF2022).
The event, themed as ‘Take the Reins’, is organised by the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), in partnership with Bank Negara Malaysia (the Central Bank of Malaysia) and aims to generate an active discourse on the work required to strengthen Islamic finance’s global leadership position.
The study found more than half (57 per cent) of Islamic finance professionals expect a dramatic increase in digitalisation over the next three years with another 40 per cent predicting a slight increase. There is prediction in increased spending and investment by Islamic finance institutions on technology and building new digital financial services over the next five years, with 50 per cent of Islamic individuals forecasting a dramatic rise and 41 per cent a slight rise. Just 5 per cent predict spending on technology and new digital financial services will stay the same or fall over the next five years.
Greater digitalisation is central to the growth of open banking, open finance and embedded finance, the study found, with 88 per cent of Islamic finance professionals questioned saying adoption will accelerate as a result of increased digitalisation.
GIFF2022 Chairman and Chief Executive Officer of Al Rajhi Bank Malaysia, Arsalaan Ahmed said, “Digitalisation is on the march in the Islamic finance sector and the research reflects the impact of increased spending on technology and new digital financial services. Increased digitalisation is central to the adoption of open banking, open finance and embedded finance in Islamic finance and our study shows professionals in the sector are expecting rapid expansion.”
