Islamic finance is enjoying strong, broad-based growth while preparing for the next stage of innovation and global expansion. Insights from a series of high-level boardroom conversations—from liquidity management to digital banking—reveal how leaders are shaping the future with confidence and ambition.
Expanding Global Scale
Worldwide Islamic financial assets are projected to reach USD 7.5 trillion by 2028. Qatar is well placed within this growth story: Shariah-compliant banking now represents roughly 25 percent of the national financial system, with assets around QAR 700 billion, and Takaful (Islamic insurance) premiums have nearly doubled since 2020.
These achievements rest on a strong foundation of fully Islamic banks, active asset managers, and a forward-looking regulatory environment. Strategic priorities now include widening Islamic liquidity management, supporting new types of Islamic investment funds, and designing products that align with global ESG expectations.
Product and Market Innovation
The industry is actively shaping new instruments to meet evolving investor needs. Key directions include:
- Broader liquidity tools—such as short-term Sukuk and cross-border instruments that can be sold before maturity—help institutions manage cash more flexibly.
- Equity-linked and asset-backed structures—responding to changing investor appetite and regulatory updates—enhance transparency and genuine asset participation.
- Infrastructure-focused products—to attract long-term Islamic funds and global capital while addressing national development priorities.
Digitalization, data visualization, and sustainability are moving from optional features to essential design elements, ensuring offerings remain relevant and competitive.
Regulation and Market Alignment
Industry leaders consistently highlighted the importance of keeping frameworks aligned with market evolution. Rather than pointing to shortcomings, the emphasis is on constructive collaboration:
- Continuous refinement of licensing classes and supervisory approaches can help tailor oversight to different types of institutions and risk profiles.
- Efforts to harmonize practices across jurisdictions—including dialogue among key centers—will make cross-border Islamic finance more seamless and predictable.
- Strengthening dispute-resolution mechanisms ensures that arbitration and rulings have recognized authority and build investor confidence.
This ongoing regulatory dialogue is less about overhaul and more about fine-tuning to enable scale, innovation, and global connectivity.
Technology and Inclusion
Innovation remains a cornerstone of growth.
- Fintech and digital banking—from alternative credit scoring to blockchain-enabled settlement—are lowering costs and expanding financial inclusion.
- Offline-ready digital banking solutions, such as tablet-based services, can reach remote areas where internet access is limited.
- Digital assets and green Sukuk are gaining attention as tools to combine Shariah principles with environmental and social impact investing.
These advances show how Islamic finance can lead in both technology adoption and ethical finance.
Opportunities and Risk Awareness
While the opportunities are significant, boards are also proactively managing risks:
- Keeping up with technological change to meet evolving customer expectations.
- Ensuring that the growing variety of products—especially in digital and ESG-linked areas—remain well governed and transparent.
- Strengthening staff training on Islamic finance to ensure high-quality recommendations and customer service.
- Supporting wider participation from sovereign issuers and new primary dealers to deepen market liquidity.
Rather than challenges, these are seen as areas where the industry can sharpen its leadership.
Madad’s Role in the Evolving Islamic Finance Landscape
Qatar’s innovation story also includes emerging players such as Madad Fintech, which is building the country’s first Shariah-compliant digital marketplace for MSME invoice discounting. By combining alternative credit scoring with seamless digital onboarding, Madad aims to bridge working-capital gaps for small and medium enterprises while helping banks and investors access a new asset class. Already a Qatar Central Bank Sandbox participant with partnerships that include leading Qatari banks, Madad reflects how homegrown fintech solutions can complement national priorities and expand the reach of Islamic finance.
The Road Ahead
From Qatar’s dynamic ecosystem to expanding regional cooperation, a clear direction is emerging: grow confidently, innovate continuously, and align globally. The sector’s collective agenda includes:
- Expanding liquidity management and cross-border offerings.
- Developing next-generation products that blend Shariah compliance with technological and ESG leadership.
- Strengthening collaboration between regulators, industry, and academia to ensure sustainable, inclusive growth.
Islamic finance is poised not merely to keep pace with global markets, but to set new standards for responsible and technology-enabled finance. With coordinated action on these priorities, the coming decade promises to be one of unprecedented opportunity and global impact.
Editor’s Note: This overview is based on observations and takeaways from the recent IFN Qatar Dialogues 2025, where global experts and regional stakeholders shared their experiences and forward-looking strategies.