Fintech startups have cropped up around the world and those trying to modernize and bring more structure to Islamic finance are not far behind. In fact, in many parts of the world, they are leading the charge. 18 startups have set up shop in Malaysia helping it to emerge as one of the world’s top hubs for Islamic fintech startups. 15 fintechs in the UK followed by 15 Islamic fintechs in Indonesia. Surprisingly, the UAE ranks 4th with 12 startups in the field. The United States only has 11 companies. According to a report from S&P Global Ratings, Islamic finance is set to expand slowly this year and in 2019, but fintech could provide a boost by unlocking new avenues for growth and enhancing the security of transactions.
In terms of trends, crowdfunding makes up over a third of the global Islamic fintech market, followed by banking software, which makes up 17%. Other major segments include payments, remittances and foreign exchange and alternative and peer-to-peer finance.
Looking ahead, Gulf countries are positioning themselves to become fintech hubs. the U.A.E. and Bahrain, in particular, establishing regulatory sandboxes and business accelerators targeting the sector. The Dubai Chamber released its findings on the top Islamic fintech hubs ahead of the Global Islamic Economy Summit in Dubai, held in late October this year.