Industry leaders from the UK and Turkey have met in Istanbul at the UK Turkey Islamic FinTech Forum to discuss how to progress the opportunities presented by the rapid development of Islamic FinTech.
Addressing the Islamic FinTech Forum, Wayne Evans, Advisor, International Strategy, TheCityUK, made the following remarks:
Thank you Nick for this welcome, may I also thank HM Consul General Judith Slater and her team at the Consulate for the support they have given to this project and today’s event.
I am Wayne Evans an Adviser to TheCityUK and the lead on Islamic Finance. On behalf of TheCityUK I would [also] like to welcome you all here today and thank you for attending. Today’s forum is part of a wider programme of partnership between Turkey and the UK.
TheCityUK, is the UK’s leading membership body for financial and related professional services. We have been working with our partners and now good friends at Borsa Istanbul for just over a year. Our joint project has been looking at the development of Fintech and opportunities for co-operation between our countries. We have drawn into the project representatives from industry from Turkey and the UK.
The first phase started on 13 November last year and our working group meetings considered developments in conventional Fintech, mostly focussing on exchanges. From those meetings came a recommendation for a second programme to consider Fintech in Participation, or as it is known in the UK, Islamic Finance.
Yesterday, Borsa Istanbul hosted the second successful working group meeting of this phase and we will be hosting a delegation from Turkey in London early next.
For Islamic Fintech, our first working group meeting looked at how changes in law and regulation could promote the growth of Islamic Finance in both the UK and Turkey. We agreed that developing a regulatory sandbox in Turkey, modelled on the sandbox established by the regulator in the UK, would be an important step in supporting Islamic Fintechs. Yesterday we considered finance and funding for Islamic Fintech and how Fintech could facilitate zakat and charitable giving.
The third meeting in London will look at education and training and review progress made. We will then produce a report with recommendations for the development of the sector.
There are many parallels and similarities between conventional and Islamic finance but Islamic Fintech faces particular difficulties, some of which we will discuss in our panel today.
After the panel there will be presentations by representatives from leading companies in the UK Islamic Fintech space.
But this is not a trade mission, we are not here to sell our products. We are here to promote business and develop partnerships for the benefit of both countries and the much wider global Islamic Finance community.
The UK has a lot learn from Turkey, for example the use of mobile phones for banking and other financial transactions is far higher here than in the UK. We need to learn best practice from each other.
It is often said Islamic banking and other forms of finance are held back because they have spun out of conventional finance to meet demand. Because it is based on conventional finance systems it follows them too closely and is not truly Sharia compliant. Or conventional finance hampers the growth of Islamic Finance because of its size, ease of access and lower costs.
And this to me is the beauty of Islamic Finance Fintech. We are starting out with almost a blank page. The previous strictures need not apply.
Today, nearly half the world’s working-age population (approximately 1.7 billion people) do not have access to a bank account. Of these 13% of the global total live in three Muslim countries – Pakistan, Bangladesh and Nigeria, of the remainder a further 24% (putting aside domestic issues) live in countries with large Muslim populations – India and China.
If we take Pakistan for example. For access to banking it has made major improvements in the last 10 years and now around 23% of the adult population have access to formal financing services. However, the population of around 210m has a high level of mobile-phone penetration with 146m accounts or roughly 70% of the population. So many of the unbanked must have access to a mobile phone. Therefore the opportunities for Islamic Fintech to improve financial inclusion and the subsequent development of economic prosperity in Pakistan are huge.
I look forward to the panel session later this morning and the presentations by our speakers but before that I would like to invite Mr Recep Bildik Director of Business Development at Borsa Istanbul to make the key note speech.