The newly released Islamic Finance Development Report 2018, compiled by Thomson Reuters and the Islamic Corp for the Development of the Private Sector, shows buoyant figures for the Islamic finance industry and is positive for further growth in the near future. According to the study, the global Islamic finance industry grew by 11% in 2017 compared to the previous year to $2.4tn in assets and showed compounded annual growth of 6% since 2012. These figures are based on data collected from 56 countries with Islamic finance industries, mostly in the Middle East and South and Southeast Asia, and there from a total of 1,389 fully-fledged Shariah-compliant financial institutions and windows. Of the entire assets, Islamic banking accounted for 71%, or $ 1.7tn, of the industry’s total assets in 2017. Based on the report’s findings, the global Islamic finance industry will reach a total global asset volume of at least $3.8tn by 2023, which translates into further double-digit annual growth from 2018 onwards and represents an annual growth rate of 9.5% over the past decade. The growth is mainly driven by expansion of Islamic finance into new territories, as well as by new and innovative capital market products and the development and adoption of sector-specific financial technology. However, while the growth is seen to be sustainable, the number of Islamic financial institutions is expected to drop owing to a continuing consolidation within the Islamic banking sector, with some large mergers and acquisitions to take place in the dominant markets such as Malaysia and the GCC. Regionally, Africa is seen as a particular area of potential growth for Islamic banking, as a growing number of governments there is laying out roadmaps for the industry’s development and providing respective regulatory frameworks. For example, Northern African countries such as Morocco and Algeria have seen the launch of several Islamic banking subsidiaries and windows in the recent past, while sub-Saharan countries such as Nigeria, Senegal and Kenya have also implemented banking, legal and regulatory frameworks to spur growth in the Islamic banking sector. Because only Sudan and Djibouti have so far reached meaningful levels of Islamic banking assets as a proportion of total banking assets in Africa, growth potential is huge in all other countries where the continent’s estimated 250mn Muslims live. As per asset size, Iran, Saudi Arabia and Malaysia remain the largest Islamic finance markets worldwide according to the study, while Cyprus, Nigeria and Australia saw the most rapid growth. As per another important valuation, Thomson Reuter’s specially developed Islamic Finance Development Indicator score, or IFDI, which aggregates indicator scores for quantitative development, knowledge, governance, corporate social, responsibility and awareness, shows that Malaysia, Bahrain and the UAE led the 131 countries assessed. The emerging Islamic finance markets which had most improvements in their financial and supporting ecosystems include Iraq, Suriname, Nigeria and Ethiopia. The study also points out that the digital revolution is beginning to transform the Islamic banking sector. There have been launches of several Islamic online banks, and a fast-growing number of startups are focusing on a broad range of fintech solutions for Islamic banking and are also innovating with new technologies such as blockchain. New digital banking channels mean for traditional banks that they can increase their outreach to more underbanked regions, and with the rapidly growing popularity of mobile banking, particularly among younger people, a growing number of disruptive digital-only banks with no physical branches have emerged that are attracting a sizeable number of clients and are becoming serious competition for established Islamic banks. The advent of robo-advisers and digital wealth management services give the industry another innovative momentum, while the supporting ecosystem sees innovations such as digitised learning or new methods to digitise complex Islamic finance contracts by facilitating blockchain. Such new developments are particularly encouraged by countries such as the UAE and Bahrain, while Shariah scholars across the industry are now busy with reviewing Shariah compliance of fintech innovations, the study finds.