UAE Islamic banks will have a hand in mentoring up-and-coming Shariah fintech start-ups and shape Dubai’s Islamic fintech agenda as the Emirates’s Shariah economy incubator sets itself to work closely with Dubai’s fintech accelerator program.
Reaffirming its commitment to Islamic finance under its 2024 Strategy and in line with its digital finance ambitions, Dubai International Financial Center (DIFC) has formalized an MoU with the Dubai Islamic Economy Development Center (DIEDC) through which the global financial hub makes it a priority to also nurture innovative Shariah compliant financial technology.
Under the agreement, Islamic finance institutions such as Emirates Islamic, Dubai Islamic Bank and Abu Dhabi Islamic Bank will join DIFC’s FinTech Hive as mentors to innovators in the field of Islamic fintech. Finalists will also gain an insight into the Islamic finance industry through a dedicated event hosted for them during which these technopreneurs will be exposed to the impact of technology on this sector as part of Dubai and the wider region’s broader economic development.
“We are continuously investing in our world-class ecosystem at DIFC and that includes an infrastructure that is compliant and in line with best practice for Islamic finance institutions,” commented Arif Amiri, CEO of DIFC Authority, who called the partnership an “important” and “progressive” step for fintech for the Islamic economy and for FinTech Hive.
Dubai is one of the few jurisdictions globally to have explicitly vocalized its Islamic fintech hub aspirations – Malaysia, Bahrain and Abu Dhabi being the others; Bahrain last month formed its fintech regulatory sandbox and specifically outlined Shariah compliant fintech as an area of focus.
Worth approximately US$2 trillion and projected to almost double to US$3.5 trillion by 2021 (according to DIEDC), the Islamic finance industry holds immense potential. But as Abdulla Mohammed Al Awar, CEO of DIEDC, put it: “Within the maturing Islamic economy landscape, several segments still need to be tapped. These include mobile banking and payment systems, as well as SME financing. We are confident the FinTech Hive at DIFC will go a long way toward developing these high-potential segments, and are committed to supporting the accelerator program to guarantee its success.”