From protection of cyber data breaches to ease of banking services, Islamic banking is adapting to the digital transformation without compromising on Sharia principles, one of the region’s leading financial figures has told Arab News.
Bello Danbatta, Secretary-General of the Islamic Financial Services Board (IFSB), said digitalization is key if the sector wants to reach out to those who have been left behind by traditional ways of banking.
Danbetta was speaking at the 15th IFSB summit, held at Jeddah’s Ritz Carlton Hotel and attended by governors of central banks from across the region, as well as other leading financial figures.
He told Arab News: “Islamic finance really sees digitalization as an enabler, as an opportunity for you to strive and grow by reaching out to the unbankables, especially for the financial inclusion agenda. So it is really an essential component. So we see it as a great opportunity for the Islamic finance to grow.”
“Islamic finance supports any platform that could be used to drive its objectives by reaching out to support the Ummah and build the economy.
But at the same time we do, we must make sure that whatever digitalization is coming up is actually in line with the Shariah principles,” he added.
Danbatta said the development in many other IFSB member jurisdictions from 57 countries, actually demonstrated the progress made within these parameters.
“A lot of effort and work has been done in terms of digitalizing Islamic financial services in their respective jurisdictions, and at the same time without compromising the Sharia principles,” he said.
Fahad Al-Mubarak, Saudi Central Bank Governor, spoke at the event and said the aim of this transformation is for the Islamic financial industry to benefit from innovation.
“Achieving a balance between innovation and status, as the summit seeks to focus on the development of the Islamic financial industry and digital transformation from the perspective of a balance between the ability to benefit from innovation and at the same time enhancing the position and stability of the financial sector,” he said.
“The Islamic financial industry has been able to maintain its demanding growth and has been able to spread geographically to what it is today.—AN