Friday, August 14, 2020
/ 1:00 PM / Bukola Akinyele for WebTV / Header Image Credit: WebTV/Fahad Siddiqui
The roll-out of shariah-based digital financial products will deepen Islamic Finance in Nigeria. Mr. Fahad Siddiqui, Co-Founder and Chief Operating Officer of TAIF Digital Institute for Islamic Finance in Toronto Canada gave this opinion as a guest on WebTV's Islamic Finance Weekly program.
According to him, there has been a lot of discussion in Nigeria about Digitization, as it concerns Islamic Finance but the deployment of technology can enable the market to reach out to 60m Nigerians.
Speaking further he said Neo Banks are avenues for Islamic Finance to deploy technology and broaden financial inclusion because a large percentage of those that are financially excluded in developing nations are Muslims.
He cited the Rizq Neo Islamic Banking rolled out in the UK as an example of a success story to learn from in digital Islamic finance and banking.
Siddiqui also noted that other Non-Banking Islamic Financial institutions are rolling out products such as personal finance or wealth management products using a similar concept.
â€œHolistically private-public partnerships must be formed at a macro level, we must ask ourselves what are problems the masses are facing and then address the problem in the shape of a Sharia-Compliant Financial solution both at a collective and individual level and this need not be complicated,â€ he said.
Assessing the African market he said based on his experience with the Bank of Khartoum, Sudan, South Sudan and DIB Kenya rollouts, there was no problem on the supply side, but there was a need to address the required speed, for example in Sudan his team was able to turn around the bank to be the first and best in terms of Retail Banking in the Country.
He suggested that Islamic Finance Institutions whether fully licensed to operate as Shariah-Compliant Banks, Windows, or as Non-Banking Islamic Financial Institutions should embrace the latest 'device' and 'geographic' agnostic technology thereby migrating them to digital architecture.
Giving further views on Islamic Finance, he noted that the adoption rate was still slow and embracing or migrating to Digital Infrastructure and application means the industry could reap the benefit of reducing operating costs while increasing revenue.
Also, he believed that scaling up would help Islamic Finance Institutions to offer Shariah (Non-Interest) compliant products to address the demand side. Thanks to such start-of-the-art technologies, IFIs would be able to onboard un-banked or even attract conventional banking customers in a win-win service delivery solution.
On Islamic Banking, Siddiqui noted that at the product level, it could address ever-changing markets and regulations much faster, rather than being reactionary, and post-pandemic, the opportunities for digitization could be enormous.