Experts call for strategy to use fintech in Islamic finance

KARACHI: Shariah-complaint banks have been urged to adopt a strategy to make effective use of financial technology, which is triggering big changes to global financial markets, a statement said on Wednesday.

“At present, the Islamic finance industry has a share of 13.5 percent in the country with approximately five million Islamic finance customers from a figure of 110 million bankable customers. Out of which, we have 40 million potential mobile-using customers,” Ahmed Ali Siddiqui, director of Centre for Excellence in Islamic Finance at IBA, said at a seminar held recently.

“For Islamic finance to benefit from the technological advancements in the continuously changing marketplace today, there has to be a strategy for Islamic finance in the digital world,” he added.

Ashar Nazim, a fintech expert and managing director of Finocracy spoke about the changing industry dynamics and beginning of a new era with prevalence of fintech. Praising the efforts of Pakistan’s Islamic finance industry, Nazim said, “Pakistan is doing phenomenally well in the Islamic finance arena. Internationally, many Pakistanis are leading the Islamic finance institutions. But Pakistani Islamic finance industry has to adapt to fintech.”

He also elaborated on the importance of fintech, saying: “fintech is doing two things; it is making access to financial technologies a lot simpler and a lot convenient and provides a level-playing field to each and every player in the industry; be it big or small.” Market Link Executive Director Ishan Kanji said that using fintech will support the agricultural sector by providing easy access of loans and facilities to farmers.

He stressed on the need to tap into the informal economy, which is twice the size of formal economy in Pakistan. Hasan Bilgrami, CEO of BankIslami, said: “Technology is an enabler; you can pretty much do anything you want with the technology.”

“You just have to take care of what your customer wants and provide them with efficient, customer centric and value-added solutions. People at the bottom of the pyramid are using technology in a more sophisticated way.” He added. He also shared the success story of BankIslami being the first bank in Pakistan to use biometric technology.