Published in light of the UAE’s Innovation Month, the analysis finds that tailored regulation and clarity on rules could aid the small and medium-sized fintech outlook. Crowdfunding and peer-to-peer (P2P) financing could be a game-changer in Islamic finance, giving wider reach and potential to close the gap for SMEs, which generated about 60% of UAE GDP in 2014, with Dubai’s regulator introducing the first tailored regulation for crowdfunding in the GCC.

Christou’s analysis highlights that new opportunities to invest in gold, integrated by Islamic fintech blockchain technology, may revive its appeal and lift demand. Consumer demand for the metal in UAE and Saudi Arabia fell by 5% 2017 compared to 2016, to 104 metric tons, according to Bloomberg Intelligence. 

Development of Shariah-compliant, gold-backed products following the introduction of the Shariah Gold Standard may encourage investors to place their money in gold, seeing it as a safe-haven metal, as the Islamic Financial Services Board predicts that Shariah-complaint assets will expand by 261% compared to 2015, to represent $6.5 trillion by 2020.The Dubai International Financial Center signed an MoU in July with the Dubai Islamic Economy Development Center in an effort to enhance the emirate’s Islamic Fintech ecosystem. As Malaysia leads the race in Shariah-compliant Fintech companies, with UK and Indonesia following their lead – major Islamic Financial markets such as Bahrain and UAE are also following suit. 

These latecomers have now seen the potential of what can become a revolutionary implementation as smart phones and other sophisticated gadgets invade the Middle East. According to Accencure, a consultancy firm, only 1% of US$50 billion in Fintech investment (globally since 2010) went to the Middle East and North Africa.In the 9th century, a Muslim man from Baghdad could cash his check in China. 

Checks were derived from an Arabic instrument, a written vow that goods would be paid upon delivery, as a means of protecting traders from traveling with large sums of money which exposed them to robbers. Innovation in Islamic Financial systems has always been a tradition and this was pointed out by Khalid AL Rumaihi – head of Bahrain Economic Development Board