Fintech growth will help drive increased Zakat, voluntary giving

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New research with leading Islamic finance professionals shows they believe developments in fintech and digitalisation will be a major contributor to growth in the annual financial value of Zakat, as well as voluntary giving such as Sadaqah donations and Waqf endowments.

The research was conducted by IslamicMarkets.com, a leading platform that provides access to expert knowledge and financial opportunities, to support the Global Islamic Finance Forum 2022 (GIFF2022), 5-6 October in Kuala Lumpur.

The event, themed as ‘Take the Reins’, is organised by the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), in support of the Malaysia International Islamic Financial Centre (MIFC), and aims to generate an active discourse on the work required to strengthen Islamic finance’s global leadership.

The study found 84 per cent of Islamic finance professionals believe that the annual financial value of Zakat, as well as voluntary giving such as Sadaqah donations and Waqf endowments will increase over the next five years with 33 per cent expecting a dramatic increase.

The study identified growth of fintech firms and digitalisation of financial services as the key contributor to expansion of voluntary giving ahead of improved transparency around Zakat, Sadaqah and Waqf. Advances in technology in making it easier to identify relevant charitable projects, was highlighted as another factor in growth over the next five years ahead of the growth of middle classes in Muslim-majority countries. Greater collaboration between relevant parties and the expansion of open banking and open finance, as well as more opportunities to invest or donate were also seen as key contributors.

GIFF2022 Chairman Arsalaan Ahmed said, “Digitalisation and the rise of fintechs are central to the expansion of Islamic finance, but as the research shows, it can also benefit Zakat and voluntary giving in general. Technology is transforming all our lives and will have a major impact on Islamic finance over the next five years by increasing transparency and making voluntary giving easier.”—Zawya News

 

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