Over the past few years, Halal finance has progressively grown. It provides Muslims with ethical solutions, but anyone seeking fairness, transparency, and socially responsible investment.
The global halal economy exceeded $2.3 trillion in 2023, and halal finance is quickly emerging as one of its most powerful drivers, capturing a significant share of this growing market. Looking ahead, we have three trends in Islamic banking that are worth watching out for.
1) The Emergence of Islamic Fintech: Placing Halal Finance in Everyone’s Fingertips
Technology is revolutionizing the way we do finance, and Islamic banking is not excluded. Islamic fintech is bringing Shariah-compliant financial services to our fingertips. With Shariah-compliant investment mobile applications and web-based payment solutions, the expansion of fintech is creating fascinating new horizons in the realm of halal finance.
What’s even more exciting is how this movement is making halal finance more appealing to younger people who are more tech-savvy.
Take Malaysia, for example. The government is now supporting Islamic fintech by giving licenses to new digital banks. The aim is to help more people, especially millennials, get easier access to halal financial services. The Islamic fintech market is growing fast and is expected to reach RM575 billion by 2025. We’re already seeing new and exciting innovations happening in this space.
Malaysia already has a strong background in Islamic finance, and now local businesses are finding ways to combine that with technology and digital financial services. For example, apps for halal investments, Islamic e-wallets, or Shariah-compliant loans.
The goal is to make Malaysian businesses go global, create more innovation, and strengthen Malaysia’s position as a leader in Islamic fintech.
2) Sustainable Investing: Where Halal Finance Meets the Planet
Sustainability isn’t going away anywhere soon. And halal finance is poised perfectly to be part of this movement. Sustainable investing, or ESG (environmental, social, and governance), is gaining recognition globally, and Islamic banks are embracing it wholeheartedly.
Halal finance is not only Shariah-compliant but also has a good impact on the world.
For example, green sukuk is emerging. This is an investment done in a halal way that is used to protect the environment. Instead of just investing to make money, people use green sukuk to support eco-friendly projects.
It’s a way for Muslims to grow their money while still following Islamic values and doing something good for the planet at the same time.
3) Internationalization of Halal Finance: Across Borders
Halal finance is going to be widespread a lot more, and it is no longer limited to Southeast Asia and the Middle East. Now, Islamic banking is finding its position in Western economies. The UK, Germany, and France are experiencing greater demand for Shariah-compliant financial products. It’s not so much about catering to Muslim communities but offering an ethical, inclusive financial alternative that appeals to everyone.
The growing demand from non-Muslim consumers for ethical and transparent financial products is assisting in opening the door for halal finance to become a mainstream choice. Whether Muslim or not, there is an increasing awareness that the values of justice and social responsibility in Islamic finance are good for all.
Conclusion
The future of halal finance is promising, and it’s interesting to see how these trends are influencing the landscape. Whether it is the arrival of Islamic fintech, the trend towards sustainability, or the universal spread of halal banking, there’s potential for each one of us to be an agent of this good change. With the halal finance business continuing to change and grow, this much is sure: values of equity, morality, and social responsibility are not going away anytime soon. This enables financial solutions to become more inclusive and accessible to all.
