Embedded Islamic finance: Back to the roots to reshape the future

Dr. Moutaz Abojeib is Director of Operations at IFAAS, and Dr. Shaher Abbas is the CEO of IFIN.

The fourth industrial revolution is changing the world around us at a faster pace than ever experienced before. While the COVID-19 pandemic pushed the boards of financial institutions to accelerate the digitalization agenda, the management are still struggling in their adoption and implementation. With the constantly increasing number of digital solutions and Fintechs available in the market, the decision on which solution or Fintech to go with becomes more difficult.

One of the newly emerging solutions is embedded finance. Embedded finance is defined as a seamless integration of financial services by businesses. The primary purpose of embedded finance is to streamline customer experiences by eliminating extra steps to obtain financing in which the customer can get the product and the financial service at one stop. While embedded finance is a new concept, it is indeed not a strange notion for Islamic economics. In fact, one could claim that embedded finance is a core philosophy of the Islamic economics and transactions theory.