The Islamic fintech and digital investment sectors are rapidly growing, underlining a significant shift in the financial habits and preferences of Islamic investors worldwide.
According to the Global Islamic Fintech Report 2022, the top five subsectors for Islamic fintech are crowdfunding; payments; challenger banking; robo-advisory and alternative finance. MENA-GCC and Southeast Asia are established as dominant regions in terms of producing Islamic fintech companies, the report said.
In Asia, the investment landscape is still very much focused on serving the affluent, high-net-worth segment, which heavily features traditional intermediaries.
“But we are seeing a nascent growth into digital investing, as financial markets have gone through quite a cycle in the last couple of years and have been volatile. So investors who are not very savvy may have been a bit confused with market volatility or movement. What digital platforms such as gold base, robo-advisory, portfolio management have offered is the alleviation of those concerns,” Munirah Khairuddin, the country head and CEO of Principal Asset Management Malaysia, shared.
The traditional investment channels are beginning to embrace a hybrid digital journey, with basic transactions facilitated through a digital process, while more complex transactions, such as financial planning and balancing taxes, for instance, are handled by an advisor, Munirah explained.
This trend is mirrored globally, Munirah said, adding an observation that there is a lack of offerings in the space. There just aren’t enough products; there are a very limited number of approved products on the shelf, she noted.
“I am still very upbeat about the innovation in the investment and product space for Shariah compliant products, and not just limiting to serving institutions but also retail investors. And what better way to do that than on a digital platform?”
This is an excerpt of an interview with Munirah Khairuddin, the country head and CEO of Principal Asset Management Malaysia, about the opportunities in the Islamic digital investment space in the GCC and Southeast Asia. Listen to the full discussion on IFN Podcast.