(13 April 2026 – Asia) The rapid growth of Islamic finance faces a challenge overcoming sluggish digital rollout and product development.
The issue is not whether Islamic finance can operate seamlessly online but whether products that attain regulatory approval by Sharia boards can be adapted, upgraded and scaled once they are digitised while being measured constantly against conventional banking alternatives.
“The easiest way for Islamic banks to digitalise is to take an existing value proposition that’s already been approved by the Sharia board and the regulator, and replicate it into a digital experience. The challenge comes when you want to change or improve it” commented audax Chief Commercial Officer Mike Breen for Asian Banking & Finance, a Standard Chartered backed Banking-as-a-Service (BaaS) provider.
“Each change requires multiple layers of governance review, leaving banks with what we call “static implementations”, products that struggle to evolve at the pace demanded by digital consumers. There’s no real rinse-and-repeat model. As a consequence, products don’t evolve very quickly because of these extra layers of governance and review. When Islamic products aren’t available, people move to conventional products instead.”
“Innovation doesn’t have to be just the financial product. It can be the entire customer experience, lifestyle, journey, value-added services. This approach has seen audax help banks digitise Hajj registration through bank accounts, and work on tokenising sukuk to lower investment thresholds. Fractional sukuk could cut minimum investments from about US$200,000 to far smaller sums, widening access to Islamic capital markets.”