Financial technology or FinTech is a fast-growing industry in the world due to its ability to innovate the world of finance which connects with the increase of millennial activity within finance. Technology makes industries more efficient, albeit at the expense of workers. Aspects of FinTech include online banking and cryptocurrencies.
London is the perfect city for an electronic trading infrastructure as it processes over half of the world’s $5.3 trillion currency market due to its advantageous time zone between US and Asian finance hubs. This is also furthered by Brexit as this means the strict EU regulations may not apply to the UK soon enough meaning that this makes the UK more competitive. Eileen Burbidge, British Treasury’s special envoy for financial technology was quoted as saying “You basically have Silicon Valley, plus Wall Street, plus Washington DC, all in one place” in her description of London.
All of these factors culminate in London being at the forefront of Islam-compliant financial technology. This is an emerging sector within the emerging sector of financial technology and is projected at growing significantly due to the growing market with the world’s Muslim population which is set to grow to 3 billion by 2060. According to Bloomberg Intelligence, only Malaysia has more significant Islamic FinTech start-ups than London. A study by RedMoney Group found that of the approximately 103 Islamic FinTech firms globally, 16 were founded in the UK.
One of the reasons that many believe that Islam-compliant FinTech is a strong emerging market is due to its ability to be in accord with the principles of Sharia law which most Muslim countries follow. Huge wealth can be found in the oil rich Middle East meaning that more investment capital can be gained for furthering the field.
The Sharia law and Islamic tenets means that usury fees such as interest is strictly prohibited in Islam which means companies such as Yielders can launch Islamic alternative asset marketplaces for properties and such. Islamic FinTech can enable asset backed interest free loans which circumvent traditional concerning buying and selling goods.
Last year, less than 3% of global venture capital went into Islamic geographies which is concerning since the world’s Muslim population is set to grow to 3 billion by 2060. These markets are often deeply underserviced and diverse. London has been shown to be a perfect place for start-ups and a hub for finance across the world that along with the fact that London is comprised of 12.4% Muslims according to the 2011 census demonstrates that London is at the forefront of financial technology as well as Islam-compliant financial technology
