The former global head of the Islamic banking practice at EY has ventured into the Islamic fintech space under the ambit of Finocracy through which he will be driving the rollout of fintech platforms in the GCC region.
The appointment of Ashar Nazim as the managing director of Finocracy, a specialist in operationalizing fintech platforms, comes after Ashar led a group of investors in buying a considerable stake in the organization. Having led the buildout of 30 Islamic financial institutions and programs at EY as a senior partner and head of its global Shariah banking practice, Ashar in his new role will now implement fintech solutions in collaboration with partner Islamic banks.
“More than 50% of banks in [the] GCC are experiencing declining profitability, and that is a cause of concern for the boards. Islamic banks are no exception. After five decades of enjoying double-digit growth, the industry is experiencing a sharp slowdown. The forecast for [the] next three years to 2020 suggests between 5-8% growth in Islamic banking assets globally. Finocracy will lead the charge to revive industry growth by operationalizing digital platforms, revenue models and cost structures for Islamic banks,” said Ashar. “Over [the] next five years, we expect between eight to 10 million customers in the region to switch to a digital-first relationship. That is a big prize to win. The business volumes will understandably remain modest in initial years. Still, at stake is up to 25% of [the] banking revenue pool in the region.” It is suggested that 40% of banking customers in the GCC are ready to switch to a digital-first banking relationship and this could significantly alter the banking landscape in the next five years. In order to position themselves in the evolving market, Finocracy expects banks in the GCC to collaborate with at least three to seven fintech solution providers to stay ahead of the game.
“This year, we expect to see six to nine major fintech platforms scaling up across GCC markets, with Series A and B funding. Another 60-70 serious fintech solutions are in [the] incubation phase and expected to be launched in [the] next 12 months in the region. Regulators are responding well by helping [to] open up the markets, especially in Bahrain, Dubai and Abu Dhabi,” commented Sayd Farook, the chairman of Finocracy.