Page 61 - CMA Journal (Mar-Apr 2025)

Digital Islamic

Focus Section

Banking and

Fintech

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In the current digital era, technology is transforming Fintech is empowering
almost every aspect of our lives, including how we people who were
manage, save, and spend our money. The financial previously excluded
industry is evolving at breakneck speed—from AI-driven from the financial
investment platforms to smartphone apps that allow you system—especially in
to transfer money with a tap. However, despite all this underbanked or rural
innovation, there is a growing demand for inclusive and areas. When combined
ethical finance, particularly in countries with a Muslim with the ethics of
majority. This is where Fintech (financial technology) and Islamic finance, it
digital Islamic banking come in, offering a unique blend creates something even
of modern convenience and traditional moral principles more powerful: Digital
based on Shariah law. Islamic Fintech. Muhammad Afzaal, FCMA
Let’s explore this exciting intersection of tradition and Understanding CEO, Affan Afzaal & Company
Practicing CMA Professional
technology, and see how it’s reshaping the global Islamic Finance
financial landscape.
Islamic finance is not just “banking without interest.” It is a
What is Fintech — and Why is it a comprehensive financial philosophy built around
Big Deal in Banking? fairness, justice, and social responsibility. Key principles
include:
Imagine being able to open a bank account, apply for a
loan, invest in halal businesses, and even track your • No Riba (Interest): Money shouldn’t make money just
spending habits—all from your smartphone. That’s the by existing. Profit should come through effort, trade, or
magic of Fintech. At its core, Fintech refers to the shared risk—not by charging interest on loans.
integration of technology into financial services to make
• No Gharar (Uncertainty): Transactions should be
them faster, more efficient, and more accessible. It
clear, transparent, and free from ambiguity.
includes innovations such as Mobile banking and digital
wallets; Peer-to-peer lending; Robo-advisors for
• Halal Investments Only: Money should not be
investments; Smart budgeting apps; Blockchain and
invested in industries such as gambling, alcohol,
cryptocurrency; and Crowdfunding platforms
pork, tobacco, or anything considered harmful.
• Profit and Risk Sharing: Lenders and borrowers
should share both the profits and the risks of a
venture.
• Social Equity: Wealth should circulate fairly and not
be hoarded or concentrated among a few.
Islamic finance aligns deeply with the values of many
communities—Muslim or not—who seek ethical and
meaningful ways to manage their money.
What is Digital Islamic Banking?

Digital Islamic Banking is the modern, tech-driven
version of Islamic finance that retains the core values of
Shariah-compliant financial principles while leveraging
digital platforms, mobile apps, and online services.

ICMA’s Chartered Management Accountant, Mar-Apr 2025 59