Experts call for better awareness of the potential of Islamic fintechs

ISLAMIC finance players keen on tapping into the financial technology (fintech) sector need to consider investment challenges, lack of awareness and regulatory considerations, said experts at a recent Islamic finance forum. 

One of the hindrances to users downloading or accessing Islamic banking savings or investment applications was not due to lack of funds, but rather the lack of interest, said Muslim money app Kestrl co-founder/COO Daeng Saifullah Termizi. 

“Investment is easy, but the level of percentage (of customers) to start an investment is low. We question why this is happening because the barriers to entry were not dollars and cents, it’s the mindset, people have to have an investment mindset to be able to download the app and take the next step,” he told the Global Islamic Finance Forum 2022 in Kuala Lumpur recently. 

The London-based Kestrl aimed to help Muslims budget, save and invest in line with their values. 

Speaking at the same event, Ethis Global Group co-founder/ group MD Umar Munshi said leaders or founders of Islamic finance start-ups or fintech applications must set an example, to 

help alter the perception of the viability of Islamic fintech apps or companies. 

“If participants (or customers of fintech apps) come from the market movers, finance leaders and industry players themselves, it can set a trend to get more peers or friends to participate,” he said. 

Rizq Financial Technologies Ltd co-founder Shahid Amin, also operating in Britain, saw the value 

in having large institutions or well-known brands support new fintech applications. 

“Often investors are demanding interest (profitability in conventional banking) within one year, and that is difficult for new players who want to get into the Islamic finance or fintech space,” he shared on some of the challenges. Rizq is a financial services provider of ethical banking. — TMR 

  • This article first appeared in The Malaysian Reserve weekly print edition