Wednesday, 30 September 2015 | By: Marketing Team
Islamic finance has significantly evolved over the past decade, as this is also apparent by the number of Islamic financial institutions and the number of people preferring this way of banking.
A key element of this trend is the notion of justice apparent in the Shariah law. Although the financial institutions in both the conventional and Islamic finance domains perform more or less the same activities, ie attract new clients, develop new products that comply with regulatory requirements, etc., there are the elements of investments made by the banks, the active participation in businesses and the sharing of profit and risk that lead more people to preferring a more ‘socially responsible banking alternative’.
In the recent Deloitte 2014 report on Islamic finance, it was presented that Islamic finance institutions have a set of specific requirements that will be best met with the utilization of modern Islamic finance technology designed for their needs that will provide “flexibility, scalability and more customer-centric features”.
An E&Y report also identified 25 “rapid growth market” countries for Islamic finance which they predict will account for half of the global GDP by 2020. Of these, 10 have a high percentage of Muslims in the population. In addition, Iran accounts for nearly half of the banking assets in Islamic banks worldwide. Three-quarters of the rest is in the QISMUT nations (Qatar, Indonesia, Saudi Arabia, Malaysia, UAE and Turkey) where growth has averaged 6.5% per year for the last five years.
Other research material also indicates the expansion of Islamic banking and finance as an alternative finance approach. The developments that are taking place in the marketplace also emphasize the importance of easy to use and maintain computerized systems that offer a reduced total cost of ownership and enhanced features tailored to the industry. Modern platforms can incorporate the desired functionality to allow institutions in the sector to achieve the agility when dealing with conventional banks and when designing new products for their clients to help them establish long-standing relationships.