Page 62 - CMA Journal (Mar-Apr 2025)

Focus Section

For instance, a customer can open a halal savings account
using a mobile app, invest in a Shariah-compliant mutual
fund through a robo-advisor, and apply for an
interest-free home loan based on Murabaha (cost-plus
financing) or Ijara (leasing) structures. Each transaction is
reviewed and approved by a certified Shariah Board to
ensure full compliance with Islamic principles.
Remarkably, all of these services can be accessed without
ever visiting a physical bank branch.

Benefits of Digital Islamic Fintech
U.S.-based halal robo-advisor operating in several
This fusion of faith and technology is not just a cool
countries. Hello Gold enables users to buy and save gold
innovation—it has real-world impact, especially in
with full Shariah compliance. Beehive, based in the UAE,
regions where traditional banking systems fall short.
offers peer-to-peer Islamic lending. Muzn Islamic Banking
a) Expanding Financial Inclusion - Around 1.7 billion in Oman is a fully digital Islamic bank providing savings,
adults worldwide remain unbanked—without investment, and financing solutions. These pioneers
access to basic financial services. Many of them live demonstrate that Islamic Fintech can be smart, scalable,
in rural areas, conflict zones, or countries with and socially impactful.
unstable banking infrastructure. Digital Islamic Challenges Faced by Islamic Digital Finance
banks can reach these individuals through mobile
phones and offer services in a way that aligns with
Like any fast-evolving industry, digital Islamic finance
their religious and ethical beliefs. This builds trust
faces its own set of challenges.
and accessibility.
a) Regulatory Challenges - Fintech innovation often
b) Convenience at Your Fingertips - People no longer
outpaces legal frameworks. There is a pressing need
have to stand in long lines at bank branches or deal
for updated regulations that safeguard consumers
with paperwork. From making zakat donations to
and guide institutions—without stifling innovation.
investing in sukuk (Islamic bonds), everything can be
done in minutes with just a few clicks. b) Cybersecurity Risks: Online platforms are
vulnerable to data breaches, phishing, and
c) Lower Costs and Greater Efficiency - Digital
cyberattacks. To build and maintain client trust,
banking cuts out the middlemen and eliminates the
Islamic digital banks must invest heavily in
need for physical infrastructure—resulting in lower
cybersecurity.
overheads. That’s great news for customers, who can
enjoy lower fees and better rates. c) Digital Access Issues: Not all users have internet
access or the digital literacy to use fintech solutions.
d) Enhanced Transparency - Technologies like
Bridging this gap requires awareness campaigns,
blockchain offer tamper-proof records of financial
education, and broader technological access.
transactions. This is a perfect fit for Islamic banking,
where transparency and honesty are d) Challenges with Shariah Compliance: Modern
non-negotiable. financial products are often complex, and ensuring
compliance with Islamic principles can be
e) Innovation in Product Offerings - Fintech has
challenging. This makes Shariah audits and strong
enabled a wave of new Shariah-compliant tools that
governance essential.
are reshaping the financial ecosystem. These include
crowdfunding platforms that support ethical What Does Shariah Compliance in Finance Mean?
startups, robo-advisors that build personalized halal
investment portfolios, digital sukuk issuance by Islamic finance is not just about ideals—it relies on
governments and corporations, and microfinance institutions, checks, and controls that ensure those
platforms designed to empower women and small values are applied in practice. Shariah compliance
businesses. involves prohibiting interest (riba), speculation (gharar),
and unethical investments. It supports profit-and-loss
Examples of Islamic Fintech in Action sharing over fixed returns and demands transparency in
contracts and transactions. This is not merely a branding
This is not just theory—numerous platforms are already
claim—it is upheld by rigorous internal processes and
putting these concepts into action. Wahid Invest is a
external oversight.
60 ICMA’s Chartered Management Accountant, Mar-Apr 2025