The Gulf Cooperation Council nations play a significant role in Islamic financing. These countries, along with others in the MENA region, contribute to over 70% of the global assets in the Islamic finance industry.

In recent decades, Islamic finance has evolved into a framework for financial services, products, and financing concepts that align with the rules of Islamic law regarding the distribution and utilization of funds.

Initially coined in the 1960s, Islamic finance complies with the ideology of the Islamic financial system, offering products and services in forms including Sukuk, Ijarah, Mushrakah, Wadiah, and more.

In terms of asset base, Iran, Saudi Arabia, Malaysia, South Africa, and Qatar are the five nations with the highest share of assets in Islamic finance, according to a research report from Red Mad Robot. Notably, Iran and Saudi Arabia collectively control 59% of the total assets of Islamic finance, with Iran holding 37% and Saudi Arabia 22%.

The amount of financial assets in the Islamic banking industry is growing substantially, and the industry is anticipated to see more growth.

Total assets in Islamic banking increased by more than 55% during a four-year period, from $1.8 trillion to $2.8 trillion. According to projections, the worldwide Islamic banking market is expected to exceed $4 trillion by 2026, demonstrating the importance and ongoing growth of Islamic finance in the world of financial services.

Islamic finance is the largest sector of the Islamic financial industry, accounting for 70% of its assets.

Similar to mainstreams trends in the financial services industry, digitization is picking up rapidly in Islamic finance. New players such as fintech’s are flocking into the market, with the growth of this segment expected to hit 18% per annum over the coming period. By 2026, the worldwide Islamic fintech industry is projected to reach around $179 billion.

Promising avenues for the digital transformation of Islamic banking include crowdfunding, investment platform, payment services, digital banks, blockchain, cryptocurrencies, smart contracts, information security in the financial industry, and insurtech.

Source: Consultancy-me.com