At the heart of our global community, Islam is the fastest growing religion in the world. One that values unity and togetherness, the Muslim community is expanding faster than the world’s population as a whole. Based on a recent study by PEW Research Centre, Muslims have been identified as the largest consumer group, particularly in the age group of 15-59 years old. With the increase of new information and ever-changing financial landscape, the Muslim consumers are steadily evolving into prosumers, a group of modern-day buyers who grew up in a day and age of information, choices and social abundance. To shape or repackage your services for today’s masses, it is important for the financial industry to acknowledge the majority’s shift in societal behaviour. By embracing this new-found change, it is the key to unlocking the opportunity to combine inclusivity and innovation within the Islamic financial space.
Building Inclusivity in Finance
The move to incorporate inclusivity into finance has been a subject of discussion over the last decade. With high-speed technological advancement around us, it is more important now than ever to provide a platform for inclusivity to shine in the finance industry. Today, there are more than 700 million digital consumers for financial services in Asia alone. With this massive statistics in mind, how do we provide quality financial services that are both affordable and accessible to the masses?
It’s important for us to build a foundation based on various consumer issues in the finance industry. If inclusivity matters, we have to find the financial solutions that address the setbacks and challenges faced by consumers from all walks of life. While there are many financial concerns to ponder such as accessibility, innovation and effectiveness, the highest ranked concern is the consumer’s need for instantaneous results. In other words, can a financial product or service solve a problem in the least amount of time? By addressing the consumer’s fundamental concerns, it will open the door to changing the mindset of the incumbents and subsequently, embrace the latest fintech innovations.
Championing innovation in Fintech
Improving banking processes and strengthening financial services within the banks require more than incorporating fintech solutions. It’s crucial that we identify the problem statements from the get-go and then, use fintech innovations to solve different degrees of financial concerns. Some of which includes the challenges faced by the unbanked and underbanked groups. The unbanked group’s constant setback is the inaccessibility to trustworthy and reliable bank services or other financial organisations. The underbanked group, however, largely depends on cash and cheques to fund their personal lifestyle or business enterprises, as opposed to loans.
Only when we recognise and address the fundamental concerns in the finance industry, we can provide a space for fintech to grow and solve important issues. Today, fintech plays an important role in broadening their degree of services to provide innovative solutions. They’re also stepping up to facilitate inclusions for numerous stakeholders, regardless of their income standings and geographical locations. Innovation may equate to high investment and funding, but it’s important that we produce a fintech solution that decreases transactional costs to remain competitive and agile in the industry as well as inclusive for their consumers.
In recent years, the financial industry has been amassed with key fintech trends that will shape and improve transactional services of tomorrow. Here are some of the key trends that will transform the fintech industry as we know it.
- Next generation payments: Mobile payments and cashless transactions are set to facilitate our day-to-day living and businesses
- Digital or branchless banking: Skip the lunch-hour queue in the bank and complete your transactions via your smartphone or biometric POS devices.
- ECF & P2P lending: Equity Crowdfunding (ECF) and Peer-to-Peer (P2P) lending will accelerate the speed and process of fund sourcing using a digital platform.
- InsurTech: The traditional insurance sector will be revitalised by innovative tech wearables such as a premium-tracking or a policy comparison app.
- Value-based solution: Focusing on the value of products and services towards the consumers, rather than price tag and premiums
- Financial inclusion: Creating a financial platform that is accessible to consumers from various income levels and lifestyle needs
- RegTech: Making technology regulations accessible and effective for all forms of businesses. It also allows businesses to track regulations at their fingertips.
Sedania Al Salam Capital Sdn Bhd has been part of the journey in modernizing the financial services in Malaysia . As a multi-award winning technology empowerment group, Sedania As Salam Capital is geared to becoming a regional player with Indonesia , Pakistan and the Middle Eastern as its next growth market.
Today’s Sedania As-Salam’s core offering includes the introduction of As-Sidq. As the world’s first and Malaysia’s only Shariah-compliant electronic platform for personal Islamic Banking, As-Sidq is an Islamic Financial Tawarruq (fundraising) trading platform. It is also a truly halal banking and fully automated online financial technology (fintech) platform, which was approved by Bank Negara.
This article titled Championing Inclusivity and Innovation in Islamic Finance on Islamic Banker in Feb 2018. Kindly refer to this link to view from its original publication.