Artificial intelligence (AI) is rapidly emerging as a transformative force within the Islamic economy, driving innovation across sectors from finance and food to tourism and education. 

By enhancing Shariah compliance, improving accessibility, and enabling personalized services, the technology is reshaping how the Islamic economy operates, while preserving its ethical foundations.

More broadly, the technology’s potential economic impact is substantial - AI could contribute up to $320 billion to the Middle East's economy by 2030, according to PwC.  

“The synergy between AI and the Islamic economy is immense,” says Badr Saidi, quality manager and technical auditor at Halal Consulting S.L., a Spain-based halal certification body.  

“By leveraging AI in areas like Shariah compliance, ethical finance, halal supply chains, smart cities, tourism, and education, we can drive sustainable growth while staying true to Islamic ethical principles.”

To succeed, Saidi emphasizes the need for collaboration between AI developers, Islamic scholars, and industry leaders to ensure technological advances align with religious values.

Transforming Islamic finance

AI’s most visible impact is unfolding in Islamic finance, where it is streamlining compliance processes, improving fraud detection, and fostering financial inclusion.

“With AI, Islamic banks and financial companies can better understand their customers - how they invest, what they need, and even their risk tolerance,” says Sara Husain Hammad, innovation and technology project manager at Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI). 

“This helps create personalized financial products that comply with Islamic guidelines while still being innovative,” she says.

AI-powered tools are already transforming traditional processes. According to Saidi, machine learning algorithms are now automating the verification of financial transactions to ensure they adhere to Shariah law, avoiding elements such as Riba (interest), Gharar (excessive uncertainty), and prohibited investments.

He adds that AI-driven robo-advisors are also curating tailored halal investment portfolios, while predictive analytics are optimizing Sukuk (Islamic bonds) issuance and improving fraud detection in Takaful (Islamic insurance).

Banks across the Muslim world are already deploying AI. Dubai Islamic Bank (DIB) is using AI tools to assess the Shariah compliance of companies and financial instruments. Bahrain Islamic Bank has launched a digital platform offering access to more than 1,800 Shariah rulings to help simplify complex regulations and encourage industry collaboration. 

Outside of the GCC, Bank Muamalat Malaysia has partnered with Google Cloud to to deploy generative AI and advanced data analytics to help it evolve into a fully digital Islamic institution. Egypt’s Faisal Islamic Bank has embraced AI to modernize and expand its services.

AI is also helping extend financial services to underserved communities. By analyzing alternative data - such as mobile payment history and social behaviour - AI can help individuals with limited credit histories, including those in rural areas or small business owners, to qualify for financing. This supports Islamic finance’s mission of ethical and inclusive banking.

“Combined with Islamic finance’s focus on ethical and community-centered banking, AI can open doors for more people to access financial services in a way that respects their beliefs,” says CIBAFI ‘s Hammad.

Securing the halal supply chain

Beyond finance, AI is shoring up the halal economy by ensuring product traceability, authenticity, and safety. One of the biggest challenges in halal certification is verifying that ingredients and production processes comply with Islamic dietary laws. 

“AI can assist in several ways, including in ingredient label analysis. AI-powered Natural Language Processing (NLP) can scan product ingredient lists and detect potential non-halal components like gelatin, alcohol, or animal-based enzymes,” says Saidi.

AI-powered blockchain platforms now provide end-to-end tracking of halal products, from source to shelf, while computer vision systems monitor production lines for contamination, he adds. Image recognition tools are detecting fraudulent halal logos, and IoT sensors help safeguard halal-certified goods during transportation and storage.

AI is also playing a crucial role in laboratory testing. Advanced spectroscopy and chemical analysis, supported by AI, can identify traces of non-halal substances in food, cosmetics, and pharmaceuticals with high accuracy. Meanwhile, AI-driven analytics are helping businesses forecast demand for halal products, ensuring better inventory management and reduced waste.

However, standardization remains a challenge. According to Saidi, differing certification criteria across countries make it difficult to create a universal AI model, and smaller enterprises may struggle with the costs of adopting these technologies.

Enhancing Muslim-friendly travel

The Muslim-friendly travel market is another area where AI is making strides. According to the State of the Global Islamic Economy Report 2023/24, AI is enabling personalized travel experiences and improving customer service with virtual assistants and predictive analytics.

“Platforms can now generate customized itineraries for Muslim travelers, factoring in prayer times, halal food, nearby mosques, and Muslim-friendly accommodations,” says Saidi.

The Saudi Tourism Authority is pioneering AI-powered services, having recently launched "Sara," a virtual tour guide offering real-time travel advice. The authority has also partnered with Visa to create a Tourism Data Lab to analyze visitor behaviour and spending trends.

Facilitating Islamic education

AI’s role in Islamic education is growing rapidly. NLP models can help scholars and students in deepening their understanding of Quranic and Hadith texts, while AI-based edtech solutions can offer personalized Islamic education and smart learning platforms for different age groups, according to Saidi.

Innovators are developing AI-powered Islamic chatbots, voice assistants, and digital Da’wah tools to facilitate knowledge sharing.

Startups are already making an impact. Pakistan’s Xeven Solutions recently launched Shahada GPT, offering Quranic translations, Hadith explanations, and halal guidance. Similarly, India-based QuranGPT answers religious queries. 

“The primary motivation behind developing QuranGPT was to bridge the gap between religion and modern individuals,” says Raihan Khan, an AI applications engineer and creator of QuranGPT. 

“Nowadays, people don’t want to spend hours flipping through books to find an answer or determine if something aligns with the teachings of the Holy Quran. QuranGPT simplifies this process by providing instant responses in natural language.”

However, combining AI with religious guidance carries significant risks. Without human oversight, AI can easily misinterpret Islamic teachings, spread misinformation, and inadvertently cause harm.

“While AI has the potential to enhance various aspects of the Islamic economy, its intersection with religion must be approached with extreme caution,” Khan warns.

“The biggest concerns lie in the inherent biases of AI models, the risk of misinformation, and the challenge of ensuring religious authenticity. Without strict monitoring, AI could do more harm than good in this space,” he adds.

Limited adoption

Despite AI's promise, adoption in the Islamic economy remains in its early stages. Most Islamic tech startups have yet to fully embrace AI, focusing instead on basic automation rather than sophisticated, AI-driven innovation.

“As of now, AI’s role in fostering innovation in the Islamic economy - particularly in tech startups or digital finance - is minimal,” says Khan. “While AI has the potential to enhance areas like Islamic banking, halal certification, and ethical investment screening, most Islamic tech startups have yet to fully explore or implement AI-driven solutions.”

Pakistan is aiming to implement an interest-free Shariah-compliant banking system by January 2028. While the ambition reflects a momentous shift toward an Islamic values-based financial system, practitioners caution that unresolved challenges could undermine the transition.

Renewed political will
In April 2022, the Federal Shariat Court (FSC), the country’s constitutional Islamic religious court, ruled that the entire banking system must be completely free of riba – more commonly known as interest - by the end of 2027. The court instructed federal and provincial governments to amend relevant banking laws to comply with the Shariah legislation. 

The directive, however, wasn’t the FSC’s first attempt to push for a fully Islamic banking system. The religious court made an initial declaration in 1999, notes Dr Sanaullah Ansari, CEO of Al-Iqtisad Consulting, only for it to be delayed by later governments through appeals and legal reviews. 

“This process continued and finally, in April 2022, FSC ordered the government to convert the current conventional banking system by December 31, 2027,” he says. 

However, this time there is adequate political will to introduce Islamic banking, complemented by a clear roadmap accorded by the State Bank of Pakistan (SBP), the country’s central bank. Following the FSC’s decision, the SBP released its five-year plan (2023–2028), setting ambitious goals to transform the conventional banking sector. 

There are currently 22 banks operating in Pakistan, including six fully-fledged Islamic lenders. Many of the remaining conventional banks either operate Islamic windows or have started planning for a full conversion. United Bank Limited (UBL) and Faysal Bank have transitioned, while Bank of Khyber and National Bank of Pakistan are en route. Others like Bank of Punjab are also exploring the shift.

In parallel, the Securities and Exchange Commission of Pakistan (SECP) - the country’s financial regulatory agency - introduced the Shariah governance guidelines in January 2023.

These apply to non-banking financial companies, Takaful operators, and private pension funds, with the aim of deepening Islamic capital markets.

Sovereign debt, coordination mar outlook 
Pakistan is the second-largest Muslim-majority country in the world. However, despite strong numbers, financial inclusivity across the country is fairly tepid. The country’s sovereign debt profile is another critical factor; the IMF notes that government debt stands at 71.4% of the Southeast Asian nation’s GDP, much of which is denominated in conventional, interest-bearing instruments.

“Most of the government’s liabilities are in conventional form,” says Mohamed Damak, head of Islamic Finance at S&P Global Ratings. “The government could choose to issue only sukuks going forward to refinance all commercial debt and net new borrowings, assuming that the market appetite for these instruments will be there.”

Damak adds that a significant portion of the debt is in the form of multilateral loans, bilateral loans, and central bank swap lines, with some of the multilateral loans having very long-term tenors. “It remains to be seen if and how these can be converted or structured in a Shariah-compliant format,” he adds.

Farrukh Raza, CEO of Islamic Finance Advisory & Assurance Services (IFAAS), believes that renegotiation is likely to take time due to legal and risk concerns from creditors, as well as the complexity of restructuring existing debt. “Stakeholders need to stay focused and resolve these matters as soon as possible.” 

Despite steps taken by the SBP and SECP, several market practitioners highlight a lack of coordination between key institutions and an absence of clear, realistic timelines.

“There needs to be a more well-thought-out process with a realistic plan and determined goals,” says Raza. “There needs to be better coordination with policies and implementation among the different entities in the country.”

He outlines three critical requirements for a successful transition.

“There needs to be a political will to genuinely support this transition and all stakeholders to be aligned on making it happen,” he says. 

“Secondly, you need a well-structured roadmap with clear targets and timelines for everyone to understand and work towards. Thirdly, you need to create a national champion among state institutions to own, lead and deliver this transition.”

This lack of coordination is closely tied to insufficient communication. Public engagement has been limited, with few workshops, conferences, or awareness campaigns to educate stakeholders about what this transition entails, according to Ansari.

“While the SBP and SECP have done valuable work, the broader market is still unclear about how this transition will play out,” he says. “Without consistent messaging and cooperation between players, implementation by 2027 will be difficult.”

Changing perceptions
A significant challenge lies in public perception. Many consumers raise doubts on the veracity of the Islamic banking system, considering it a repackaged version of the conventional banking system. This lack of trust dents its uptake as well as its credibility. 

Ansari notes that many banking customers question whether there is a meaningful distinction between Islamic and conventional products. “Whilst a lot of work has been done to facilitate Islamic banking, there is still a perception that it is merely a replication of conventional banking,” he says.

Sceptics also point to challenges in countries that have adopted Islamic financial systems, including Iran, Sudan and Afghanistan, though Raza believes comparisons with those countries to be unfair. 

“It’s not fair to compare Pakistan’s transition with these countries because all of them remain challenged on the international stage,” he says. “The issues they face are political in nature and not due to their financial systems being Shariah-compliant.”

Creating goodwill through education and awareness in addition to a clear timeline and roadmap to assimilate these changes thus remains key. 

Each year, Muslims around the world donate tens of billions of dollars in Zakat, the obligatory almsgiving that is one of the five pillars of Islam. 

While the generosity of these donations remains undisputed, the challenge lies in how to effectively organize and manage a massive flow of funds to ensure they reach those in need.

A particularly significant spike in donations occurs during the month of Ramadan. Though Zakat can be given at any time of the year, many Muslims choose to disburse it during the holy month, believing the spiritual rewards are multiplied. 

According to a survey by the Muslim Philanthropy Initiative, nearly 70% of US-based Muslims prefer giving Zakat during Ramadan, often through community events like fundraiser Iftars or group prayers. The same pattern is observed across the globe. Islamic Relief Canada, for instance, sees a 500-700% increase in Zakat donations during Ramadan. 

“This surge is driven by the spiritual significance of giving in Ramadan, religious obligations, and the trust donors place in organizations to distribute funds effectively to those in need,” says Mashaal Saeed, media and campaigns lead at Islamic Relief Canada.

Similarly, the National Zakat Foundation Australia experiences a surge of up to 90% in Zakat contributions during Ramadan, according to Ismail David, CEO of the National Zakat Foundation Australia. 

But the question arises: How can stakeholders harness this increased generosity to benefit the worthiest recipients? By leveraging digital platforms, technologies such as AI and blockchain, and offline community-based efforts, charities can ensure that Zakat not only reaches the right people but also makes a lasting impact on communities in need.

Partnerships, offline strategies for efficient disbursal 

Zakat serves as a powerful tool for social support, providing Muslims with an organized methodology to assist the needy with essential resources like food, shelter, and healthcare. 

Saeed emphasizes the importance of pre-planned distribution systems that can handle the influx of donations quickly and efficiently. Many donors earmark their Zakat for urgent humanitarian aid, so rapid-response mechanisms are key to ensuring that funds reach those in crisis.

Building partnerships with local NGOs, mosques, and community organizations can also ensure that Zakat funds are distributed to vulnerable populations without delay. 

Ardiansyah Ihsan, an associate at the Indonesia-based Zakat Foundation Institute highlights the importance of traditional strategies, such as mosque-to-mosque campaigns and public talks by religious scholars, which remain effective. 

“Despite the dominance of digital channels, offline strategies still account for 40-50% of the overall campaign efforts during Ramadan,” notes Ihsan.

In addition to addressing immediate needs, many charities are focusing on long-term empowerment, combining direct aid with sustainable development programs. This includes offering skills training, microfinance initiatives, and other services aimed at improving the financial independence of recipients. 

By adopting a holistic approach to charity, Zakat can not only provide immediate relief but also help break the cycle of poverty for the long term, according to Ihsan.

Digital solutions re-envisioning Zakat collection

The rise of digital platforms has revolutionized the way Zakat is collected and managed. 

According to Saeed, online payment gateways, mobile apps, and automated recurring donations make it easier for people to contribute, while data-driven tools help identify and prioritize communities in most need. 

To raise funds this Ramadan, Islamic Relief Canada is organizing more than 10 community Iftars across the country in support of Palestine and Sudan, with the NGO selling tickets through its website.

David notes that digital platforms offer a more efficient and scalable way to collect donations, especially among the digital-savvy generation.

The National Zakat Foundation Australia is launching an online campaign - Z Connect - in Ramadan aimed at educating the community about the power of Zakat and the importance of collaboration. Moreover, the foundation is enabling users to customize and automate their daily giving for Ramadan via its app. 

Social media has also emerged as a crucial tool in Zakat campaigns. Platforms like Instagram, Facebook, and Twitter allow non-profits to engage with a global donor base, raising awareness through educational content and beneficiary stories.

“Social media is instrumental not only in raising public awareness through educational content on Zakat, storytelling of beneficiaries, and promoting organizational transparency but also in facilitating direct donations,” says Saeed.

Ihsan builds on it: “The presence of influencers and religious figures strengthens donors' decision-making processes. These figures help build trust and direct their audiences toward contributing to credible organizations.” 

Leveraging advanced technology

Beyond traditional digital solutions, advanced technologies such as artificial intelligence (AI) and blockchain are beginning to transform Zakat collection and distribution.  

AI helps charities assess and prioritize aid more efficiently by processing demographic, economic, and environmental data, pinpointing regions where assistance is most urgently required. 

“At National Zakat Foundation Australia, we use AI to help with Zakat distribution to improve and speed up the assessment process of applications,” says David.

According to Nicolas Merle, cofounder of On The Shoulders, a France-based design studio specializing in guiding investors in sustainable finance, AI can also predict future needs and proactively deploy resources to prevent crises.

Blockchain, with its transparent and immutable ledger, offers a new level of accountability, allowing donors to track the journey of their contributions from donation to disbursement. 

Hubert Knapp, managing partner at Chavanette Advisors, believes that smart contracts on blockchain platforms could automate the entire Zakat process, from calculation to distribution, reducing the need for human intervention and ensuring timely assistance to recipients. 

However, regulatory challenges remain, especially regarding cryptocurrency and blockchain technologies. 

Islamic scholars are divided on the use of digital currencies for Zakat, which has slowed adoption in the sector. Ihsan believes that in the medium term, there is hope for further integration.

“It is essential for stakeholders, scholars, and policymakers to engage in discussions to establish regulatory frameworks that maximizes the potential of these technologies in Zakat management,” he says.

In today’s digital age, the way we give and receive charity is evolving.

Shariah-compliant digital wallets are emerging as powerful tools to facilitate donations in a manner that aligns with Islamic finance principles.

Whether it’s Zakat, Sadaqah, or Waqf, these digital solutions offer a seamless, transparent, and accountable method for Muslims worldwide to fulfill their charitable obligations.

The role of Shariah-compliant digital wallets in donations
A Shariah-compliant digital wallet operates as an electronic repository for halal financial transactions.

These wallets are designed to avoid interest (riba), ensure ethical investment of stored funds, and provide secure payment options. When used for donations, they offer several benefits:

1. Ease of giving – With a few taps on a smartphone, donors can contribute instantly, eliminating the logistical challenges of handling cash or setting up manual bank transfers. Recent studies indicate that digital donations have increased by over 40% globally due to the accessibility of digital wallets.

2. Transparency and accountability – Blockchain and digital ledger technologies can ensure that donations reach their intended recipients without unnecessary intermediaries taking excessive fees. According to the World Bank, digital transactions reduce corruption and mismanagement by 30% in charitable giving. 

3. Automated Zakat and Sadaqah payments – Digital wallets can be programmed to calculate Zakat obligations and automate payments, ensuring that donors never miss their contributions. Reports indicate that automated Zakat contributions have grown by 25% annually in several Islamic countries. 

4. Global reach – Donations can be made across borders in real-time, helping those in need without delays associated with traditional banking systems. Islamic Relief Worldwide has reported a 50% increase in international donations via digital wallets.

5. Integration with Waqf management – Long-term charitable endowments (Waqf) can be efficiently managed and distributed via digital wallets, ensuring sustainability and ongoing impact. Data from Islamic financial institutions show that digitized Waqf management has improved fund utilization efficiency by 35%.

However, as with any financial innovation, there are key challenges that must be addressed to ensure compliance, trust, and long-term sustainability.

Challenges facing Shariah-compliant digital wallets for donations
Despite the many advantages, several hurdles must be addressed before digital wallets can fully revolutionize charitable giving within Islamic finance.

1. Shariah compliance and certification
Not all digital wallets that claim to be Shariah-compliant undergo rigorous scrutiny. Donors need confidence that their funds are being stored, processed, and invested in a way that fully adheres to Islamic financial principles.

Obtaining certification from reputable Shariah boards and ensuring compliance audits will be essential to gaining trust. A study by the Islamic Financial Services Board found that only 60% of digital financial platforms meet full Shariah compliance standards. 
 

2. Regulatory and legal constraints
Financial regulations vary by country, and some governments impose restrictions on digital payments and cross-border donations. Compliance with local financial laws while maintaining adherence to Islamic principles presents an ongoing challenge for wallet providers. Research from the Global Islamic Finance Report indicates that regulatory barriers prevent 40% of potential digital transactions from being processed efficiently. 
 

3. Fraud prevention and fund misuse
Ensuring that donated funds reach the right beneficiaries requires robust tracking mechanisms. While blockchain can improve transparency, full adoption remains a challenge due to regulatory uncertainty and technical limitations.

Fraud-related losses in digital transactions are estimated to be over $4 billion annually, highlighting the need for enhanced security measures in donation platforms. 
 

4. Digital accessibility and financial literacy
In many regions where donations are most needed, digital literacy remains a significant barrier. Many individuals either lack access to smartphones or do not fully understand how to use digital wallets securely.

Investment in education and simpler user interfaces will be necessary to bridge this gap. The Financial Inclusion Report by the Islamic Development Bank states that only 55% of Muslims in developing countries have access to digital financial tools.

5. Integration with Islamic Banking and financial ecosystem

Digital wallets should be seamlessly integrated with Islamic banks and other Shariah-compliant financial services to ensure that funds remain within the halal financial ecosystem. This will prevent the risk of funds being stored in interest-bearing accounts or invested in non-halal activities.

According to industry experts, 70% of Islamic financial institutions are looking to develop digital solutions that integrate with fintech platforms to improve accessibility. 

Faysal A. Ghauri is a doctorate student in cybersecurity leadership and founder/CEO of Halal Payments Network in Canada

As markets swing wildly and ethical concerns grow around conventional finance, Muslims face a vital question: How can we build wealth while staying true to our faith?

Shariah-compliant investing isn’t just a niche concept - it’s a necessity for Muslims navigating the complexities of modern finance.

It’s a pathway that not only protects against haram practices like interest but also empowers us to contribute to an economy rooted in ethics, fairness, and social good. Let’s explore why finding Shariah-compliant investment opportunities is essential and how they can help us thrive both spiritually and financially.

The ethical imperative: Beyond profit
In conventional finance, success is often measured solely by returns. The higher the profit, the better the investment. But as Muslims, our approach must differ.

Wealth in Islam is a trust from Allah SWT, and how we earn, spend, and grow it reflects our accountability to him.

Shariah-compliant investments screen out companies and industries engaged in haram activities like alcohol production, gambling, and conventional banking. But it goes beyond avoidance. These investments prioritize industries that benefit society, such as renewable energy, healthcare, and education.

This ethical foundation ensures that your financial growth does not come at the expense of harming others or compromising Islamic values. It’s not just about securing your future; it’s about doing so in a way that serves the greater good and pays it forward for the next life.

The key question, of course, is how Muslims can invest in a way that aligns with their values. While the list of options is extensive, this article highlights a few investment ideas that are often overlooked.

It is important to note that this is not an exhaustive list, nor is it intended as investment advice.
 

Diversifying with crypto: A modern opportunity
One of the most exciting developments in recent years is the rise of cryptocurrency as a Shariah-compliant investment option. Digital assets like Bitcoin have reached new all-time highs earlier this month, crossing $103,000, which demonstrates the acceptance of blockchain technology and the potential for Muslims to participate in this transformative market.

Wondering how cryptocurrencies could be Shariah-compliant? To answer that, let's first take a closer look at the alternative: fiat.

Fiat currency, issued by governments, is not backed by physical commodities like gold or silver. Instead, its value comes from trust in the issuing authority. Central banks have the power to print fiat currency on demand, effectively creating money out of thin air. Those are a lot of red flags from a Shariah perspective.

In contrast, cryptocurrencies like Bitcoin are decentralized and operate on a fixed supply, ensuring scarcity and preventing arbitrary inflation. Unlike fiat, they rely on blockchain technology to provide transparency, immutability, and peer-to-peer transactions without intermediaries. This makes crypto an attractive alternative for those seeking a more stable and equitable financial system.

Cryptocurrencies, when approached thoughtfully, align with Islamic principles by emphasizing decentralization, transparency, and asset ownership. Unlike fiat or speculative trading, long-term investments in established cryptocurrencies or projects with clear utility can provide an good avenue for portfolio diversification.

However, there are big differences between different types of cryptocurrencies, so make sure to thoroughly research any crypto you consider investing in. 

The new halal economy: Building the future
Beyond cryptocurrencies, blockchain-based organizations offer another Shariah-compliant investment opportunity by solving real-world problems and emphasizing transparency.

For example, The LifeDAO is pioneering a Shariah-compliant, community-owned alternative to life insurance that allows Muslims to invest in the financial future of their families by covering burial costs and other short term expenses should a loved one pass away. Plus for a limited time, early adopters also get to participate in the platform’s revenue through exclusive revenue-share NFTs. 

At the same time, halal mutual funds, Islamic real estate investment trusts (REITs), and digital platforms are opening doors for Muslim investors.

Companies like Wahed and Ethis simplify access to Shariah-compliant opportunities, helping Muslims grow wealth ethically. Such innovations demonstrate how modern technology aligns with Islamic ethics, creating opportunities for Muslims to invest in the future while adhering to their faith.

Shielding wealth from volatility and risk
Modern economies are often destabilized by speculative practices and excessive leverage, both of which are prohibited in Islam. These behaviours contributed to major crises like the 2008 financial meltdown.

Shariah-compliant investing avoids these pitfalls by emphasizing tangible assets and real economic activities. This approach not only aligns with Islamic principles but also provides a more resilient foundation for building wealth.

The path forward
So, where do we start? The first step is education. Understand what makes an investment Shariah-compliant and seek out trustworthy advisors and resources. 

Second, take action. Start small if needed, but be intentional about aligning your portfolio with your values and make investing a regular habit. Look for halal options in your local market or explore global opportunities in Islamic finance.

Finally, remember that Shariah-compliant investing is not just about avoiding the haram; it’s about actively supporting what is halal and tayyib (pure and wholesome). By choosing investments that uplift communities, protect the environment, and promote ethical business practices, you become a part of an economy that reflects the principles of our deen.

In today’s economy, finding Shariah-compliant ways to invest is not just important; it’s transformative. It’s a means of preserving your wealth, protecting your values, and contributing to a better world.

And in doing so, it’s a step closer to living a life that truly embodies Islamic principles.

Sharene Lee is chief operating officer and Ameerah Langer is brand & communications head at Takadao

One moment, Ahmed was laughing with his children over breakfast; the next, he was gone.

The whirlwind of his family’s grief was quickly followed by an avalanche of bills and bureaucracy. The funeral director quoted €4,800, probate fees totaled €5,000 to access Ahmed's frozen accounts. Add to that unpaid loans and Ahmed’s savings left his family less than a month’s rent.

Ahmed’s experience is not uncommon; the average cost of death is about two months' salary in the US, three months in Europe, and up to four months in Muslim countries like Malaysia. As Muslims, estate planning is an act of worship and it’s our duty to prepare for death by providing stability for our loved ones in a Shariah-compliant way. Keep reading to learn how you can protect your family and future.

The Islamic mandate for legacy planning
The Qur’an explicitly addresses inheritance in Surah An-Nisa (4:11-12), providing clear guidelines for the distribution of wealth after one’s passing. Unlike secular wills, which may allow total autonomy, the Islamic system is divinely ordained.

It ensures fairness and prevents disputes, emphasizing that estate planning is not just a practical step but a spiritual duty.

The Prophet Muhammad (ﷺ) said, “It is the duty of a Muslim who has anything to bequeath not to let two nights pass without writing a will about it.” (Sahih al-Bukhari). This Hadith is a powerful reminder that preparing for our departure is not morbid; it is an act of foresight and responsibility.

Protecting wealth the Islamic way
Estate planning is not just about dividing wealth; it’s about protecting it in a way that benefits your heirs and upholds Islamic ethics.

One part of safeguarding wealth means addressing debts; an obligation that is often overlooked. The Prophet Muhammad (ﷺ) warned, “The soul of the believer is held hostage by his debt until it is paid off.” (Sunan al-Tirmidhi). 

Planning your estate ensures that outstanding obligations are settled, freeing yourself and providing peace to your family.

Shariah-compliant estate planning solutions are now more accessible than ever. Islamic wills, trusts, and inheritance calculators help Muslims navigate the complexities of dividing assets while adhering to both religious and local legal requirements. Make sure to do your research and consult reputable sources before implementing your plan.

A modern Muslim’s step-by-step plan  
 

- Leverage modern Shariah-compliant wealth solutions

Leverage modern technology to align wealth management with Islamic principles. For example, The LifeDAO offers a Shariah-compliant alternative to life insurance, providing borderless, community-driven coverage inspired by the Aqilah system of the Prophet Muhammad’s ﷺ time. This ensures financial security for your family through collective support.

Islamic will
Without a proper Islamic will, your wealth may be distributed against Shariah laws. Learn about Islamic inheritance principles and ensure your will complies with both Shariah and local laws. Consult scholars and estate planners for guidance.

Appoint guardians for children
Appoint a guardian in your will to ensure your children are raised with Islamic values. Choose someone you trust who shares your beliefs to avoid court-appointed custody decisions.

Healthcare directives
Prepare a living will to ensure your medical care aligns with Islamic principles, like prohibiting euthanasia. Discuss your preferences with family and healthcare providers.

Power of Attorney
Assign a trusted individual to manage your affairs if you’re incapacitated. Ensure they understand and follow Islamic values when making decisions on your behalf.

Charitable giving
Leave a lasting impact through sadaqah jariyah or a waqf by dedicating assets to benefit causes like education or mosques. Seek advice to comply with Shariah and local laws.

Review your estate plan
Regularly update your estate plan to reflect life changes like marriage, divorce, or children, ensuring continued alignment with Shariah.

Resting in peace begins today
As Ahmed’s story shows, planning for your departure is not a luxury for the wealthy or elderly, but a vital obligation for every Muslim. Estate planning is a vital part of our Islamic identity, deeply rooted in the values of preparation, responsibility, and compassion. The question isn’t just whether you can afford to rest in peace - it’s whether your family can afford for you not to.

By using the tools we have to address this responsibility today, we ensure that tomorrow, we leave behind not just wealth, but a legacy of love, care, and adherence to our faith.

Sharene Lee is chief operating officer and Ameerah Langer is brand & communications head at Takadao

Islamic finance, as an industry, often finds itself at a crossroads. While there is much to celebrate -  double-digit growth and the establishment of a global trillion-dollar industry - there is also a need for honest introspection.

Too often, Islamic finance insiders dwell on external barriers: regulators, the global riba (interest-based) system, or the so-called “conventional” competition. These were valid concerns during the foundational years of modern Islamic finance (1970s–1990s). 

Today, however, such rhetoric risks are becoming an excuse for stagnation and complacency. Many conventional financial institutions and financial technology (fintech) companies have solved financial service challenges while adhering to principles far more aligned with the ethos of Islam than the Islamic finance industry has managed.

Yet, my critique comes from a place of deep belief. 

Islamic finance, at its core, is more than an alternative system to conventional finance. It is a mission-driven endeavour rooted in divine guidance, embodying justice, inclusivity, and sustainability. 

The Qur’an repeatedly emphasises these values while cautioning excess, extravagance and hoarding:

“Cooperate with one another in goodness and righteousness, and do not cooperate in sin and transgression.” (Al Qur’an, 5:2)

The Sharīʿah, as a socio-legal and ethical framework, seeks to ensure shared prosperity and justice. Yet, the disconnect between these principles and their application in modern Islamic finance is glaring. Even without accounting for the undisclosed private wealth of the Muslim ultra-rich stashed away in tax havens such as Switzerland or Singapore, there is a major inequality problem. 

The top 5 countries, as measured by total Islamic finance assets such as Saudi Arabia and Malaysia, represented ~81% of the total industry in 2022. None of the five countries with the largest Muslim nations such as Indonesia and Pakistan feature among the top Islamic finance centres. 

The data is clear, Islamic finance is primarily for and used by the wealthiest Muslims. This divergence must be rectified.

Rethinking Islamic finance in Australia
While a significantly smaller and more recent market, Australia’s Islamic finance sector exemplifies some of these challenges.

Australia has lagged more innovative Islamic finance markets like the United Kingdom, the United States and Singapore, where product diversity, robust institutions, and community foundations thrive.

In my reflections on the root causes for the obstacles to a flourishing Australia Islamic finance market, three things jump out:

Right products: Proliferation of “packaged” products
Islamic finance products are often packaged as “Shari’ah-compliant” without a wholesale bottom-up, comprehensive solution. For instance, many Islamic home loans are processed by brokers who repackage interest-bearing contracts from wholesale funders and banks under Shari’ah-approved structures. 

This “middleman” approach where the mortgage broker stands to make windfall risk-free brokerage fees leads to higher financing costs, longer processing times, and opaque pricing.

If we truly aspire to develop sustainable solutions, why haven’t we developed Shari’ah-compliant models like Brighte (green financing), Athena (home financing) or Prospa (business financing) who reimagined financial intermediation using digital innovations? 

Moreover, we need to develop upstream funding markets with securitisation and warehouse funding to create fixed income investment opportunities via sukuk issuances.

Right governance structures: Licensing and regulation
The proliferation of unprofessional, poorly structured schemes has undermined trust in Islamic finance. Reports of financial scandals and collapses highlight the risks of inadequate governance. Establishing properly licensed, well-regulated institutions is expensive and more challenging to launch but non-negotiable for the sector’s credibility and stakeholder protections. 

Right education: Going beyond halal
The assumption that labelling something “halal” will attract customers is fading.

Customers demand competitive, user-centric and value-driven products, especially Millennials and Gen Z customers. For example, there is blind faith in the property market – something that was unfortunately to the detriment of investors in the $200 million Qartaba Homes project who didn’t understand the liquidity and development risks. Over the past 30 years, real estate in Australia has appreciated at an average growth rate of 6.4% (before ownership costs). 

Meanwhile, the S&P 500 has achieved 9.9% over the same period. Over-reliance property investing diverts resources from critical areas like business financing, entrepreneurship and agriculture.

Opportunities for transformation
To bridge these gaps, the Australian Muslim community must work collectively across educational, religious, non-profit and corporate segments to:

1.    Develop talent
We lack tier-1 Islamic financial institutions to train the next generation of financial managers and entrepreneurs. In their midst, encouraging bright minds - particularly women - to pursue careers in finance, albeit with conventional financial institutions is critical. We need to address the stigma with working in finance and counter the unjustified emphasis on medicine, engineering and law that attracts the brightest young minds. Leaders in finance must also step up, taking lucrative pay cuts with new ventures if necessary to build enduring community-focused institutions.

2.    Embrace innovation
Rather than replicating conventional products, we should focus on disruptive models. Take Afterpay, which transformed point-of-sale consumer finance without requiring credit scores (using a trade-based murabaha financing model). Islamic finance needs bold thinking to address systematic financial service gaps.

3.    Educate consumers
Misconceptions about Islamic finance abound. Many believe it prohibits debt outright, ignoring nuanced Islamic rulings. 
Additionally, long-term investment vehicles like awqaf (endowments) or private credit remain underutilised compared to property funds and home financing. Effective consumer education is vital to empower communities and redirect resources toward long-term, impactful initiatives.

Inspiration and progress
Despite its challenges, Islamic finance is evolving. Across the globe, visionary leaders are pushing boundaries in partnership with conventional institutions.

For example, the US recently welcomed its first Islamic bank, Stearns Salaam Bank, incubated by a 110+ year-old institution committed to financial inclusion. 

The initial spark? The large under-served Somali Muslim community in Minnesota.  In Saudi Arabia, the Islamic Development Bank has pioneered blockchain-enabled systems to stabilise prices of assets traded on organised markets with SettleMint. At Wholesum, we are trying to offer a genuinely innovative investment product – passive income investing that pays monthly profit distributions from financing a global pool of small and medium-sized businesses (SMEs). 

The World Bank estimates that SME financing is key to socio-economic development and face a $5.2 trillion annual funding gap. These success stories highlight what’s possible when we embrace innovation and systematic thinking.

We must reframe Islamic finance not as an exercise in fear—avoiding riba out of concern for punishment—but as a vehicle for building a just, inclusive financial system. With inspiration from the Shari’ah, and a coalition of like-minded partners, we can develop products and services that are truly impactful and competitive.

Dr. Tanvir Ahmed Uddin is the founder and CEO of Invest Wholesum

Note: This editorial reflects the personal views of the author and does not represent the views of Wholesum, Wholesum’s affiliates or any other organisation that the author has associated with currently or in the past.

Islamic finance in Kazakhstan continues to develop rapidly, showcasing significant potential for future economic growth and sustainability. Since the adoption of the initial legislative initiatives in 2009, the country has made substantial progress in establishing a legal framework that enables Islamic financial institutions to operate and expand both domestically and internationally.

The establishment of Al Hilal Bank, the first Islamic bank in Kazakhstan, in 2010 was a major milestone that marked the nation’s integration into the global Islamic financial system (recently renamed ADCB Islamic). Following this, the development of supporting legislation facilitated the entry of other Islamic financial entities, such as Kazakhstan Ijara Company, Al Saqr Finance, and the Islamic bank Zaman. 

In 2012 the Development Bank of Kazakhstan (DBK) raised MYR240 million (about $80 million) with the placement of a debut issue of a five-year sukuk. Kazakhstan investors bought 38% of the sukuk, and Malaysian the remaining 62%.

In 2023, the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IsDB) Group, printed its first sukuk denominated in Tenge, raising KZT 2 billion ($4 million) with an auction of a five-year amortized sukuk. The sukuk, rated 'A+' by Fitch Ratings, was the first-ever KZT sukuk globally, the first in the national currency of one of the Commonwealth of Independent States (CIS) and the first KZT sukuk from an international development institution.

The role of AIFC in advancing Islamic finance
Today, the Astana International Financial Centre (AIFC) plays a pivotal role in promoting Islamic finance within the region. The AIFC offers a conducive environment for Islamic banks, asset management companies, brokers, and takaful (Islamic insurance) providers. With support from international bodies, including the IsDB, the Asian Development Bank (ADB), IFSB, AAOIFI, and CIBAFI, the AIFC has built a legal and regulatory foundation that aligns with global best practices.

In September 2024, the Islamic Finance Country Report, prepared with support from the IsDB and CSQ Law, was presented. It offers an in-depth analysis of the Islamic finance industry in Kazakhstan, a significant milestone for the nation.

To attract more companies, the AIFC has reduced the minimum capital requirements for Islamic financial institutions until May 2026. Currently, the requirement for Islamic banks is $6 million, and $100,000 for Islamic finance companies. Additionally, licensed financial services regulated by the AIFC, including Islamic banking, non-banking financial institutions, and takaful providers, are exempt from corporate income tax and VAT.

Islamic banks, financial companies, and takaful operators within the AIFC can offer their services to residents of Kazakhstan, both corporate and individual, in any currency, including the Kazakhstani tenge.

Since its establishment, the AIFC has become a platform for attracting key international players in Islamic finance from countries such as Malaysia, Bahrain, Pakistan, and Tatarstan. A notable development was the licensing of Alif Islamic Bank in December 2022, which actively provides financing to retail and corporate clients, including micro businesses. The bank has extended over KZT 3.6 billion ($7.3 million) in corporate funding and KZT 870 million ($1.76 million) for microbusinesses.

Another significant event was the launch of the Association of Islamic Finance and Business in September 2024. This association aimed to unite professionals and stakeholders in Kazakhstan’s Islamic finance industry and foster new opportunities for cooperation and growth.

New opportunities for issuers and businesses
The AIFC continues to support the development of a viable and competitive Islamic capital market.

In 2023, the rules for subsidising coupon payments on bonds issued under the national entrepreneurship development project were amended to include Islamic securities. This change opens up opportunities for Kazakhstani issuers to raise funds through sukuk issuance, creating a level playing field for Islamic and conventional securities.

A major event in the capital markets was the sukuk listing issued by the IsDB on the AIX official list. In June 2022, the first Shariah-compliant exchange-traded notes, including the iX Gold ETN, which received Shariah compliance certification, were listed on AIX.

These notes are available to retail investors via the AIFC’s Tabys app.

Additionally, in August 2023, the International Trading Platform (ITS) launched the ITS Shariah Index, which includes the 30 largest Shariah-compliant companies.

Islamic investment funds represent additional focus for the AIFC, responding to the rising demand for Shari’ah-compliant investment options in Kazakhstan. This demand is partly fueled by the scarcity of Islamic financial products within the local market. Although there are currently no officially listed Islamic funds, one firm is actively working on setting up an Islamic fund within the regulatory framework provided by the AIFC.

The AIFC has a lineup of potential sukuk issuers, including local and regional corporate entities. Recognising the significance of sukuk issuance for market development, the AIFC actively supports these initiatives. The expectation is that sukuk will be issued by the end of the year or during the first quarter of 2025.

Why it matters
The potential volume of Islamic retail financing in Kazakhstan, including mortgage, instalment plans, and auto financing, is estimated at KZT 3.9 trillion ($7.9 billion), with corporate sector demand exceeding KZT 760 billion ($1.54 billion).

These figures underscore that Islamic finance can become a key driver of sustainable economic growth in the country. With a robust legislative framework, support from international organisations, and the dynamic development of the AIFC, Kazakhstan is strengthening its position in the global Islamic finance arena.

Developing Islamic finance is a tool for sustainable economic growth and an opportunity for Kazakhstan to become a hub for attracting investments from various regions worldwide.

The country has the potential to solidify its role in the global Islamic economy and continue to create innovative, Shari’ah-compliant financial solutions.

Madina Tukulova is the head of Islamic finance at the Astana International Financial Centre and the chairperson of the Association of Islamic Finance and Business Development