The United Arab Emirates is ahead of Malaysia and the United Kingdom in terms of the number of Islamic FinTech startups per market, according to analysis conducted by Edmond Christou of Bloomberg Intelligence.
The analysis finds that tailored regulation and clarity of rules could help the medium size and small FinTech viewpoint. Crowd funding and peer to peer (P2P) financing could be a game changer in Islamic finance, which gives a wider reach and has a bigger potential to close the gap for SMEs. Small Medium Enterprises were said to have generated about 60 percent of UAE’s GDP in 2014.
Edmond Christou’s study highlights new opportunities are available to invest in gold as emerging Islamic FinTech blockchain technology may revive and boost demand for the precious metal.
According to Bloomberg Intelligence, consumer demand for the metal in Saudi Arabia and the United Arab Emirates fell by 5 percent in 2017 compared to the previous year.
Following the introduction of the Sharia Gold Standard, development of Sharia-compliant gold-backed products may encourage investors to put their money in gold, seeing it as a safe-haven metal. Sharia compliant assets are expected to increase to $6.5 trillion by 2020; this according to the predictions of the Islamic Financial Services Board.
In an effort to enhance the United Arab Emirates’ Islamic FinTech ecosystem, The Dubai International Financial Center signed a Memorandum of Understanding with the Dubai Islamic Economy Development Center.
With the United Kingdom and Indonesia following Malaysia in the race in Sharia compliant FinTech companies, major Islamic Financial markets such as the United Arab Emirates and Bahrain are also following suit. As smart phones and other sophisticated gadgets flood the Middle East, the latecomers have now seen the effects of what can become a revolutionary implementation.
Only one percent of the $50 billion global FinTech investment went to Middle East and North Africa (MENA) since 2010; this according to the consultancy firm Accencure.
A Muslim man from Baghdad in the 9th century could cash his check in China. These checks were delivered from an Arabic instrument, which is a written oath that goods would be paid upon delivery, as a way of protecting the traders from traveling with huge amounts of money that left them exposed to thieves.
Making that historical connection, Khalid Al Rumaihi, the head of Bahrain’s Economic Development Board pointed out that innovation in Islamic Financial systems has always been a tradition.