What is Fintech and Islamic Fintech
What is Fintech and Islamic Fintech
The buzzword Islamic fintech has made significant growth in the industry it promises to give the next wave of growth in the Islamic Finance industry here is an overarching view of what is Islamic fintech.
Fintech the buzzword is something that is on everybody's mind at present everybody's talking about fintech if you go online if you read the news if you read any Financial paper you'll see the word fintech somewhere being mentioned many people think fintech is a recent or new phenomenon but really it's not it's something which has been happening for a number of years but I think the scale under disruption that's taking place in the last decade as a result of fintech has caused all the newspapers tabloids headlines to really feature fintech so I guess the question is then what is fintech.
What is Fintech
If we analyze the word fintech, it is composed of two words abbreviated together you have fin which means finance, and Tech which means technology so fintech is really about financial technology or the union and the bond between finance and Technology but the question is today's Banks the financial firms and financial services all of them use some form of technology and why is it so much emphasis on fintech as a separate sector why aren't the traditional Services being called fintech services and that's really the question.
I think many people will be having what makes fintech so different and why is fintech so appealing or new the real thing I guess the Crux of the matter is fintech in its current forum we have it's about digital transformation and what we mean by that it's about it's not just about adopting technology where it's rather adopting technology which causes you know digital transformation in the way products and services are engaged so today is fintech.
When we talk about fintech we're not talking about using technology what we mean by fintech is highly Innovative disruptive and pioneering services so we're talking about moving away from traditional forms and services and using Innovative disruptive Services.
What do we mean by Innovative and disruptive Innovative mean it's something which is uncommon and disruptive it means it's really challenging traditional ways and that shows that fintech services are using new methods to offer their services so you have a financial services firm if it uses fintech it means it's doing things potentially at a faster rate it's scaling up quicker it's tapping into the markets faster it has less fixed costs or less physical presence.
What makes a Digital Bank different from a Traditional Bank
If we look at a digital Bank as a manifestation of fintech what makes a digital Bank different from a Traditional Bank will be very bureaucratic it'll be very physical in nature will be very traditional nature as well but it comes to a digital Bank, a digital Bank is completely different when you want to open an account with a digital Bank you don't need to go to a physical Branch, you have your smartphone you take a photo or you've to go out to a video call and you just scan your documents and it's done. However, in a Traditional Bank, you'd have to sign letters you might have to enter the branch so on and so forth so fintech is really about being disruptive in nature.
When we talk about Islamic fintech, we're talking about innovative disruptive Sharia compliance services and products being offered through technology. The whole discussion is about this new era this new time, this new moment, and this new decade of technology being deployed to provide traditional financial services and products but in an Innovative way.
What is Islamic Fintech
In terms of Islamic fintech what we mean by Islamic fintech is a fintech Services firm whether that's banking it's a banking firm or a digital Bank whether it's wealth management or traditional wealth management firm now using Digital Services to provide services or whether it's in the takaful space whether it's Capital markets in many of you might have heard the word of smart being deployed on a blockchain so all the different areas of Islamic Finance whether its Capital markets whether it's banking whether it's regulation whether it's wealth management whether it's Robo advisory where individuals are investing in shares and other products or whether it's crowdfunding all these different areas which are all in within the Islamic Finance ecosystem they are now being digitalized and being made Innovative and disruptive in nature so they are now taking forms of digital platforms and they are providing the services via digital service and digital platforms.
Therefore, when we talk about Islamic fintech we're talking about this move and shift from traditional Islamic Finance services that we have and it's being shifted now onto a digital medium and digital space where the costs are less the impact is more it's more scalable and these services are more streamlined and they seem they're much more seamless than they were ever before so it's a completely new way to engage the market to engage with customers and to engage with the stakeholders and so Islamic fintech is really about this space where it's all premised and underpinned by the use of disruptive technology and really scaling at a speed which was uncommon you know and has never been seen before in traditional services.
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