Among the global wave of innovations in financial technology, a growing number of companies are looking to modernize Islamic finance.
Against that backdrop, Malaysia has emerged as the world’s top hub for Islamic fintech startups, with 18 companies operating in the sector, according to new findings from the Dubai Chamber of Commerce and Industry, which based its analysis on recent data from IFN Fintech.
Malaysia was followed by the U.K. and Indonesia, with 16 and 15 Islamic fintech startups, respectively. The U.A.E. ranked fourth, serving as home base for 12 startups specializing in the field, just ahead of the U.S., which had 11 companies.
Source: Dubai Chamber, IFN Fintech 2017
Crowdfunding makes up over a third of the global Islamic fintech market, according to the Dubai Chamber, followed by banking software, which made up 17%. Other major segments tracked included payments, remittances and foreign exchange, along with alternative and peer-to-peer finance.
Looking ahead, Gulf countries are vying to become fintech hubs in general, with the U.A.E. and Bahrain in particular establishing regulatory sandboxes and business accelerators targeting the sector.
According to a report from S&P Global Ratings, Islamic finance is set to expand slowly this year and in 2019, but fintech could provide a boost by unlocking new avenues for growth and enhancing the security of transactions.
The Dubai Chamber released its findings on the top Islamic fintech hubs ahead of the Global Islamic Economy Summit in Dubai, which was held in late October 2018.