The consortium, called ALGO, will enable Islamic member banks to create fintech solutions in a cost-effective and fast manner.
During the recent World Islamic Banking Conference in Bahrain, Al Baraka Banking Group, Kuwait Finance House Bahrain and Bahrain Development Bank launched ALGO Bahrain, the first fintech consortium specializing in Islamic finance. Eight more regional banks are expected to join in the next 12 months.
“Technology is completely changing the banking industry and it’s also changing customer expectations,” says Ashar Nazim, managing director at ALGO.
Through a collaborative approach, ALGO will enable Islamic member banks to create fintech solutions in a “cost-effective and accelerated way.”
The consortium encourages banks to develop their own solutions, but is also in discussions with other fintech hubs for potential cooperation. The aim is to roll out 15 fintech platforms within five years, which at maturity are expected to be valued at more than $130 million.
Islamic financial institutions are hoping innovation will allow them to tap into new and fast-growing markets.
Total global Islamic finance assets are expected to increase by 72% to reach $3.8 trillion by 2022.