The World Islamic Banking Conference (WIBC) 2015 will serve as a platform for groundbreaking discussions on the impact of financial technology (fintech) on Islamic financial services worldwide. From Silicon Valley to Australia and in between, the movers and shakers from the fintech industry come from all over the world and will converge on Dec. 3 to address how Islamic finance can adapt in the Digital Age. Fintech has triggered a shift in technology towards Big Data, spurring a demand for financial intermediation that bypasses banks, which are increasingly seen as acting in their own interest over the interests of their depositors and financing customers. What started as a small niche business with venture capital investment of less than $1 billion in the second quarter of 2010 has grown exponentially. Research firm CB Insights estimated that Fintech investments exceeded $14 billion in new investments in the 12 months through March 2015. London is widely considered a viable global capital for the fintech industry. In 2014, investments in fintech across Europe grew 215% to $148 billion according to Accenture, with the UK taking the lion's share, and London taking 53% of funding. One of WIBC's panelists is technology expert Abdul Haseeb Basit, Head of Finance & Strategic Projects, Innovate finance, an independent industry organization that promotes the UK's status as a global fintech hub. Abdul works closely with the fintech ecosystem to address key industry issues "from attracting greater investment to helping shape the development of proportionate and effective regulation, whilst continuing to champion a truly democratic and inclusive financial services industry." While the growth of the industry is paramount, disruption in the areas of finance with the highest fees (e.g. remittances) - and others viewed as the most secure within the ‘banking' sector (e.g. credit intermediation) - represents a significant threat to Islamic banking where costs are already higher due to scarcity of human capital and more complicated product structures. Consequently, an erosion of margins in key areas like credit intermediation represents a strategic threat to the future growth of Islamic banking. Fintech should not however be seen solely through the lens as a threat. Islamic finance has developed the way it is today not because of its Shariah roots, but because of the strictures of regulation designed around interest-based banking and competition of conventional banks. Founder & CEO of Blossom Finance, Matthew Joseph Martin and WIBC panelist, said "in the past, Shariah finance often mirrored conventional debt financing. Profit sharing modes of financing are preferred in sharia, but they were considered unworkable. This was due in part to an 'information asymmetry', meaning the entrepreneur had all the information and the capital provider had none, except maybe trust and a reputation to go on. It's far more complex to originate and service a profit sharing structure versus a debt structure." Indeed, from this angle, fintech could revolutionize how Islamic banking products tie into consumers' expectations of authenticity and return Islamic banking and finance to its roots where it facilitates the non-financial economy. WIBC 2015 is a three-day gathering of the financial industry's leaders, taking place on Dec. 1-3, 2015 at the Gulf Hotel in Manama, Kingdom of Bahrain. — SG
