Global Islamic banking sector set to reach  $4tn by 2026 thanks to GCC: Report

HomeMuslim World

Global Islamic banking sector set to reach $4tn by 2026 thanks to GCC: Report

The 36th Meeting of the Islamic University in Uganda (IUIU) Governing Council Kicks off in Kampala, Uganda
Saudi Space Agency Launches Center for Space Futures, Eyes $2 Trillion Space Economy by 2035
1st Int’l conference on “Islamophobia”, hosts the meeting of religious leaders in Islamabad

RIYADH: The Islamic banking sector is poised to reach a substantial $4 trillion valuation by 2026, primarily driven by the Gulf Cooperation Council (GCC) nations, according to recent insights. The State of Fintech report by red_mad_robot underscores a remarkable surge in Islamic banking, surging from $1.8 trillion in 2018 to a staggering $2.8 trillion by 2021.

Highlighting the pivotal role played by GCC countries, the report notes their dominance, contributing 43 percent of global Islamic banking assets. This is followed closely by other Middle Eastern and North African nations, collectively accounting for 40 percent. Notably, Iran (37 percent) and Saudi Arabia (22 percent) jointly control a substantial 59 percent of these assets.

Delving into the Islamic fintech market, the report reveals significant growth, with transactions hitting an estimated $79 billion in 2021. Forecasts indicate an annual growth rate of 18 percent, potentially reaching $179 billion by 2026. Key players in this space include Saudi Arabia, Iran, Turkey, UAE, Malaysia, and Indonesia, with Indonesia leading in the number of Islamic fintech firms.

The sector’s digital evolution is marked by promising areas such as crowdfunding, investment platforms, robo-advisors, payment services, digital banks, smart contracts, and the adoption of blockchain technology and cryptocurrencies. Additionally, the report emphasizes the importance of financial sector information security and the burgeoning insurtech sector.

Asia holds a significant stake, housing 42 of the top 100 Islamic banks, which collectively possess 29 percent of these institutions’ total assets. Al-Rajhi Bank from Saudi Arabia stands as the world’s leading Islamic bank, exemplifying the Kingdom’s influence and prowess in Islamic banking.

Various factors drive the demand for Islamic banking services, including the growth of the global Muslim population, the digitization of the Islamic economy, and a rising global appetite for halal products. Simultaneously, on the supply side, factors like national strategies, government regulations, and increased trade activities within the Organization of Islamic Cooperation fuel the expansion of Islamic banking.

These collective elements substantiate the growth and diversification of Islamic banking services, affirming its integral role in shaping the global financial landscape.
(Source:https://arab.news/n87jx)

COMMENTS

WORDPRESS: 0