An Uzbekistani bank has joined an international Islamic fintech initiative led by the private sector arm of the IDB, taking the multilateral organization one step closer to a global platform facilitating cross-border Shariah compliant financial transactions.
Trustbank is the latest financial institution to participate in the Islamic Corporation for the Development of the Private Sector (ICD)’s Global Platform for Private Sector, an initiative formalized in April during the IDB’s 44th Annual General Meeting in April. Since the meeting, which saw the signing of 41 MoUs in support of the new platform, Bosna Bank International, the sole fully-fledged Islamic bank of Bosnia and Herzegovina, has also committed its support in May.
The network is a major undertaking by the ICD to utilize technology in creating meaningful global connectivity between its member countries and partners. The idea is to provide space for a community of like-minded financial institutions to collaborate on business opportunities, exchange market intelligence and lay a foundation for actual financial transactions within ICD member countries and across borders at a reduced cost and in a time-efficient manner.
“Financial institutions are changing rapidly — with trends such as artificial intelligence, big data, robo-advisors and blockchain combining to revolutionize the marketplace — and that is very exciting for us. The beauty of fintech is that even in emerging markets that may not have particularly strong technology platforms, it can reduce implementation and adoption timelines and make the whole process much faster, more efficient and more cost-effective. Plus, emerging economies often don’t suffer from the legacy issues that hinder more developed markets, which can speed them up even further,” ICD CEO Ayman Sejiny told IFN previously.
The target is to connect 100 financial institutions across its 54 member countries.
“Not many institutions can achieve that level of connectivity or ownership,” pointed out Ayman, who added: “That is where we can really gain the advantage and develop into a powerhouse to serve our communities. With fintech, we can better assess each economy, each marketplace, identify its competitive advantages and analyze exactly what services we can and should be offering to support its growth.”
Although not an Islamic bank, Trustbank has built a rapport with the ICD which assisted the bank in tapping the Shariah finance market with a US$7 million line of financing in July 2018. New joint projects are expected to be implemented through the Global Platform for Private Sector.