The adoption of Islamic fintech will soon see a global increase as nations focus on financial inclusion across emerging economies, experts at the 11th edition of Innovation Arabia said.
In his keynote speech at the event, Mohamed Roushdy, founder of Fintech Bazaar, revealed that traditional fintech has been existing since a long time as a service provider supporting financial services, but not customers.
However, the economic downturn saw decreased consumer sentiment and trust coupled with job losses and wage stagnation, he said. "People began to lose faith in banks. There was also increased regulatory control and banks got more busy with compliance rather than focusing on innovation and designing products that helped customers with services. The event also saw the rise of the third technology platform, which gave way to technologies such as mobile apps, content on the cloud and Big Data."
When it comes to fintech adoption today, Roushdy said that adoption is highest in Asia in emerging economies. China leads the way with 69 per cent adoption, followed by India at 52 per cent. Total global investment in fintech companies hit a peak in 2015 at $47 billion, before falling to $25 billion in the following year, he revealed.
In terms of financial inclusion, Roushdy said the situation looks rather bleak across many Muslim nations. "The Global Findex Database shows that 71 per cent of Muslims have no bank account. In 2014, 64 per cent of Indonesians did not have a bank account; 87 per cent of Pakistanis did not have a bank account; and 86 per cent of Egyptians did not have a bank account - these are 3 of the largest Muslim nations in the world. There is an opportunity for Islamic fintech companies here in the coming years."
The 11th edition of the event is being held under the patronage of Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and President of the Hamdan bin Mohammed Smart University (HBMSU). Lt General Dhahi Khalfan Tamim, Deputy Chairman of Police and General Security in Dubai and Chairman of the Board of Governors of HBMSU, inaugurated the event, which is being held under the theme 'Innovate, Disrupt and Transform'.
Professor Nabil Baydoun, vice-chancellor for academic affairs at HBMSU, said the importance of the Islamic economy is seen as a vital resource and a contributing factor in the transition to the post-oil economy.
Abdul Salam Al Madani, chairman of Index Holding and the executive chairman of Innovation Arabia, said: "Innovation Arabia 11 will greatly help us in achieving our goal of establishing a culture of innovation in the UAE and the Arab world and enable the flow of creativity while also gain advancement in various key sectors including health, education, renewable energy, infrastructure, transport, water and space, in line with Dubai's 2021 vision, which aims to make Dubai a key hub for trade, logistics, finance and tourism."
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