Digitization Surges in North Africa’s Islamic Banks

Islamic finance, often referred to as Sharia-compliant finance, stands as a unique pillar in the global financial landscape. It underscores a critical distinction between conventional and Islamic finance. While both financial systems are bound by the laws of the countries where they operate, Sharia-compliant finance goes a step further, ensuring compatibility with the principles of Islam.

As per data from Statista, the total assets of global Islamic banking reached an impressive $2.8 trillion in 2021. The upward trajectory of these assets is projected to continue, fueled by a growing public demand for Islamic financial products and an anticipated improvement in the operating environment.

In the heart of this burgeoning sector, three Islamic banks in North Africa are leading the charge in digitization, reshaping the financial landscape of the region. They are the Faisal Islamic Bank of Egypt, Jordan Islamic Bank, and the National Bank of Kuwait.

The Faisal Islamic Bank of Egypt, a Sharia-compliant commercial bank, was established under law no. 48 of 1977 and its subsequent amendments. The bank’s mandate extends beyond traditional banking, financial, and commercial activities. It is also involved in establishing and participating in industrial, economic development, and urbanization projects both within and outside Egypt. In a bid to enhance the digital banking experience for its customers, Faisal Islamic Bank recently entered into a partnership with Intellect Global Consumer Banking’s CBX Platform.

Next in line is the Jordan Islamic Bank, which was founded in 1978 as a public shareholding limited company. The bank’s operations encompass a wide range of banking, financing, and investment business activities, all in compliance with Islamic Sharia’. The bank operates under the provisions of Jordan Islamic Bank’s Special Law. In a move to bolster its digital electronic channels, the Sharia-compliant bank recently introduced phone banking (IVR), a digital service for its customers.

The National Bank of Kuwait (NBK) completes the trio of Islamic banks driving digitization in North Africa. NBK Egypt offers a comprehensive suite of financial solutions, including working capital finance, capital equipment finance, trade finance, cash management, project finance, and treasury products. The bank caters to enterprises of varying sizes across diverse industries, providing both Sharia-compliant banking solutions through two dedicated Islamic branches and conventional banking solutions. In a significant development, the National Bank of Kuwait recently launched Weyay, a digital bank in Kuwait.

These three banks are not just embracing digitization; they are pioneering it in the Islamic banking sector in North Africa. Their efforts are a testament to the potential of digital transformation in banking, particularly in a region where the demand for Sharia-compliant financial products is on the rise.

The digitization drive by these banks is not just about adopting new technology; it’s about enhancing customer experience, improving operational efficiency, and ultimately, driving growth in a sector that is already showing promising signs of expansion.

As these banks continue to innovate and push the boundaries of what’s possible in Islamic finance, they are setting a precedent for other banks in the region. Their efforts are likely to spur further digitization in the sector, paving the way for a more inclusive and efficient financial system that aligns with the principles of Islam.

In conclusion, the digitization efforts of the Faisal Islamic Bank of Egypt, Jordan Islamic Bank, and the National Bank of Kuwait are reshaping the landscape of Islamic finance in North Africa. As they continue to innovate and adapt to the digital age, they are setting the stage for a new era in Islamic banking, one that promises to be more accessible, efficient, and in tune with the needs of today’s customers.