Shaping the future of Islamic finance
Md. Touhidul Alam Khan, PhD :
Fifty years ago, the world witnessed a groundbreaking milestone-the establishment of the first full-service Islamic bank. Dubai Islamic Bank (DIB), founded in 1975, was the world’s first modern commercial Islamic bank.
Although earlier initiatives such as the MitGhamr Savings Bank in Egypt (1963) explored interest-free banking, DIB was the pioneering institution to function as a comprehensive commercial bank fully aligned with Islamic principles.
From those modest beginnings, Islamic finance has remarkablelly grown into a global industry nearing US$5 trillion in assets. Today, it stands at a pivotal crossroads: a moment when scale must be matched by systemic influence, leadership, and transformative purpose.
Islamic finance was founded on the principle of aligning money with meaning-an ethical paradigm rooted in justice, transparency, and responsibility. While these values remain central, the world around us has changed drastically-digitally, demographically, environmentally.
The challenge before us is clear: can Islamic finance not only keep pace but also shape what comes next? The answer, unequivocally, is yes-if we commit to evolution, boldly and holistically.
The evolution over the past five decades reflects a compelling narrative of conviction merging with creativity. From pioneering institutions, we’ve built a multitrillion-dollar industry spread across over 80 countries.
Yet, complacency has no place in such a dynamic landscape. As global issues like rising inequality, climate change, and technological disruption intensify, our industry must evolve beyond legacy practices into a model of proactive transformation.
The convergence of these forces demands innovation. Islamic finance historically embraced ethical frameworks and structural tools conducive to addressing global challenges, but now it must fully realize this potential.
Have we sufficiently innovated? Have we expanded financial inclusion? Do we lead or follow in setting global standards? These are questions that require honest reflection.
The next era hinges on shifting from reactive compliance to strategic reinvention.
Technology-particularly fintech-serves as both an opportunity and a responsibility. Digital platforms, Artificial Intelligence (AI), blockchain, and embedded finance are revolutionizing engagement, making services more personalized, accessible, and aligned with moral principles.
According to the Global Islamic Fintech Report 2024/25, Islamic fintech is projected to reach US$306 billion by 2027, largely driven by Southeast Asia, the GCC, and Africa. Yet, fragmentation persists.
To lead, we must foster robust ecosystems that support innovation, encourage cross-border interoperability, and embed purpose into every technological advancement-empowering underserved communities, automating Shariah compliance, and delivering value-driven experiences.
Sustainability is no longer an add-on but a core strategic imperativ-integrated deeply into our ethos. Long before the current global focus on ESG, Islamic finance exemplified responsible stewardship through risk-sharing, asset-backed models, and prohibition of harm. The burgeoning green Sukuk market, which reached a record US$15.2 billion in 2024, exemplifies how Islamic finance can pioneer sustainable development.
Countries like Indonesia, Saudi Arabia, and Malaysia are leading this charge, but to truly transform, sustainability must become a standard across all offerings, moving beyond niche products to embedded, measurable impact.
Equally vital is harnessing Islamic finance’s innate capacity for inclusion. Its structural design inherently promotes equity, transparency, and real economic engagement-making it ideal for reaching marginalized populations, small entrepreneurs, and emerging markets.
Despite misconceptions, Islamic finance is not exclusive to Muslim customers; its principles resonate universally among those who value dignity, fairness, and community.
To scale inclusion, we must challenge existing assumptions, leverage human-centered design, and craft innovative solutions that speak to underserved communities-turning outreach into growth.
Finally, as the industry matures, it must elevate itself from mere compliance to becoming a global benchmark. Harmonizing regulations, standardizing Shariah rulings, and leveraging technology for automation and transparency will reinforce credibility and scalability.
Such efforts can position Islamic finance not just as a faith-based alternative but as a leader in ethical, inclusive, and impact-driven finance on the world stage.
Today’s write-up is based on insights from Islamic Finance News (IFN), Malaysia’s leading Islamic finance publication.
In the current issue, Dr. Adnan Chilwan is highlighted as a distinguished leader in Islamic banking and finance, widely recognized for his visionary leadership and transformative contributions that have significantly reshaped the industry.
With nearly three decades of experience spanning both conventional and Islamic banking, he has been instrumental in elevating Islamic finance to a position of global prominence.
As CEO of Dubai Islamic Bank-the world’s first Shariah-compliant bank and the UAE’s largest Islamic financial institution-he emphasizes that the true measure of success in Islamic finance lies in the impact we create, not merely in asset size.
The world is now asking us: what do we stand for? Who do we serve? What legacy will we leave? We possess the credibility, values, and potential to lead-if we commit to embracing transformation without delay.
This moment is defining. It is time for Islamic finance to lead from strength, set new ethical standards, and forge a future rooted in inclusion and sustainability. Let us act now-boldly, collectively, and purposefully-to ensure that Islamic finance fulfills its promise as a positive force for good in the 21st century.
(Dr. Md Touhidul Alam Khan is the Managing Director & CEO of NRBC Bank PLC and fellow cost & management accountant from Institute of Cost & Management Accountants of Bangladesh (ICMAB). He is also the first certified sustainability reporting assurer (CSRA) in Bangladesh).