Islamic finance industry needs a global ecosystem driven by tech to narrow the information gap - Refinitiv

This article is sponsored by Refinitiv. It was first published in the State of the Global Islamic Economy 2019/20 report produced by DinarStandard and supported by the Dubai Islamic Economy Development Centre. The report can be downloaded from here. 

Q: Islamic finance growth in 2018 declined to 3% compared to 7% in 2017. What would you consider is the main factor for the slowdown in growth?

There are a number of factors that have contributed to this slowdown. The overall macroeconomic conditions, geopolitical tension in key Islamic finance markets, and the threat of trade wars have all contributed to a slowdown in economic and banking growth. The Islamic finance industry is no exception, but there are some factors that are specific to our industry. As the industry reaches maturity in established Islamic finance markets in Malaysia and GCC, experts have predicted that growth would be mostly driven by emerging and frontier Islamic finance markets. We are already seeing a number of governments in markets across central Asia, Southeast Asia and Africa promoting policies to facilitate the growth of Islamic finance. Despite this, these markets have not demonstrated the level of growth that was expected, and a number of structural challenges continue to persist, such as standardization, awareness and access to information and expertise. Unless these are addressed, it is unlikely that these new markets will be able to carry the growth of the Islamic finance industry.