The latest report from the EY Global Islamic Banking Center (GIBC) provides an overview of the industry and the insights shaping the future of the industry.
For both participation (Islamic) and traditional financial institutions across emerging markets, the risk of disruption is real. And the finance function of banks is at the center of this disruption.
While Gulf Cooperation Council (GCC) banks do not expect FinTech disruption in the short-term and expect fairly limited business loss to stand-alone FinTech firms in the medium-term, a significant majority acknowledge that FinTech innovations offer end-customers a noticeably better value proposition.
There is a strong case for collaboration among participation banks for the mutual benefit from FinTech innovations. Given the nature of the business of participation banking, they can benefit from evaluating FinTech innovations in small and medium enterprises (SME) financing platforms, peer-to-peer financing platforms, digital wealth management and payments related innovations.