Dubai, UAE- The UAE is well positioned to support the next phase of Islamic Finance as the industry evolves into a stronger connector of capital, trade and investment across borders, according to Standard Chartered.
Global Islamic finance assets are approaching USD 6 trillion, yet only 6% of global sukuk capital currently reaches South Asia and Africa, according to Standard Chartered’s latest report, Islamic Banking for Financial Institutions: The Islamic Finance Connector Era. The findings point to a significant opportunity to better connect Islamic capital with high growth markets.
According to the report, the next phase of Islamic finance will increasingly be defined by its ability to mobilise liquidity, connect regions and facilitate investment across emerging economic corridors. Achieving this will require stronger financial, trade and digital connectivity to enable Islamic capital to move more efficiently across borders.
The UAE is well positioned to support this shift. Located at the crossroads of East and West, it has established itself as a regional hub connecting capital, trade and investment across the GCC, Europe, Asia and Africa. The country’s growing digital finance ecosystem, supported by progressive regulatory frameworks for virtual and digital assets, is strengthening the financial infrastructure needed to support the next phase of cross border capital flows. Complementing these strengths, the National Strategy for Islamic Finance and Halal Industry 2031 aims to further strengthen the UAE’s position as a leading global hub for Islamic finance by expanding Islamic capital markets and growing domestic Islamic banking assets.
The report also identifies the emergence of new economic corridors linking the GCC with Asia, Türkiye and Africa as a key driver of the industry’s next phase of development. It also highlights the growing role of infrastructure finance, private credit, private markets, blended finance and sustainable investment in expanding access to Islamic capital. As a regional hub connecting capital, trade and investment across the GCC, Asia and Africa, the UAE is well positioned to channel these evolving capital flows.
Khurram Hilal, CEO, Group Islamic Banking, Standard Chartered, said: “Islamic finance is becoming a critical enabler of cross border connectivity. As its role in facilitating trade, investment and capital flows continues to grow, institutions need recognised financing structures and operational capabilities that enable Shariah compliant capital to move seamlessly across borders as trade routes become increasingly interconnected.”
He added: “The challenge for many markets today is not a shortage of liquidity, but how to connect that liquidity with opportunity more effectively across borders. Financial institutions that build trusted connections between capital, markets and digital infrastructure will be best positioned to support sustainable growth across emerging economies.”
The report highlights the growing role of digital infrastructure in expanding access to Islamic capital. Technologies such as tokenisation, digital assets and digital payment infrastructure are expected to improve cross border capital mobilisation and broaden investor access.
More broadly, it concludes that financial institutions need to move beyond viewing Islamic banking as a standalone product offering and instead develop the capabilities required to connect capital, clients and markets across multiple jurisdictions.
With one of the world’s leading international Islamic banking franchises, Standard Chartered supports clients across these evolving trade and investment corridors through Shariah compliant solutions, deep market connectivity and cross border capabilities, helping connect Islamic capital with investment opportunities across the markets it serves.
SOURCE: MEDIA RELEASE / SUPPLIED CONTENT WITH IMAGE
