Putting Faith into The Future: How Tech Shapes Halal Finance

It's undeniable that technology plays a significant role in transforming the Halal finance industry. Although these changes have existed for years, the industry is expected to grow exponentially in the next few years, breaking more barriers and creating newer innovations.  

Along the way, not only has technology created trends that helped shape Islamic finance into the one we know today, but also laid the groundwork for its future growth. 

The Rise of Inclusive Halal Finance Solutions 

Technology has helped Halal finance reach a new level of inclusiveness by improving cost structures and making interactions more efficient. This results in financial services that are affordable and more accessible to under-served customers.  

This also creates a space for non-bank financial solution providers, such as fintech companies. For fintech companies, inclusive banking presents an opportunity to tap into target markets with specific financial needs, allowing them to develop innovative services.  

A clear example is Halal Money, a digital finance solution created to address the lack of Shariah-compliant financial services for Australian Muslims. Halal Money now aims its services to people of all backgrounds looking to manage and grow their finances ethically. Built on a digital ecosystem, Halal Money streamlines its financial services into one simple app. Consumers can easily spend, trade, and invest within the Halal Money app. 

Wealth Management in The Digital Age 

Technology has shifted how people manage their finances, including their preferred method of investment.  

A study called Building a Future-Ready Investment Firm analysed the views of 250 wealth management firms and 2,000 investors worldwide and found that 60% of Gen Y and Gen Z investors do not expect to use traditional advice services by 2030 due to advances in technology and the development of AI. Additionally, research firm Wealth-X predicts wealth transfer from older to younger generations will amount to $15 trillion by 2030, making young investors increasingly important. This pushes companies to focus on providing investment options that are more appealing to young investors. Young investors, comprised of Gen Z and Millennials, tend to value digital experiences and tools. 

But beyond convenience, young investors also have a tendency to seek investments that align with their values. Although they prioritise ethical and sustainable investments, young investors also have a strong desire for financial stability. This is where fintech apps like Halal Money come into play, combining digital ease with investment products for the new generation of ethically conscious investors. 

But beyond convenience, young investors also have a tendency to seek investments that align with their values. Although they prioritise ethical and sustainable investments, young investors also have a strong desire for financial stability. This is where fintech apps like Halal Money come into play, combining digital ease with investment products for the new generation of ethically conscious investors. 

Halal Money offers Halal ETFs that can be purchased on the app and traded anytime during market hours. While the concept is the same as regular ETFs, Halal ETFs avoid investing in non-halal industries that are potentially harmful to the environment, such as alcohol, pork, gambling, and weapons. This makes Halal ETFs an attractive alternative for individual investors looking to align their values with their investments. Instead, Halal ETFs are invested in property, shares, and Islamic bonds (sukuk) to maintain its Shariah compliance. 

Personalised Financial Services 

Another trend technology has created is personalisation, which helps fintech platforms to adapt to each user’s behaviour and preferences. 

Personalisation is one of Halal Money’s efforts to cater to the modern-day Muslim’s needs. The Everyday Transaction Account, for example, offers users full control of finance management. Users are able to check their balance and track their daily expenses in real time. In keeping with Halal Money’s commitment to Shariah compliance, the account only operates as a debit account and doesn’t incur any interest. 

Not just on daily transactions, Halal Money also offers personalisation In trading. The built-in feature, Compass, helps beginner investors discover their risk appetite by asking several questions regarding their investing style. This way, users can get suitable investment recommendations.