- Islamic Fintech sector surges to $180 billion by 2026, driven by innovation, regulation, and investment trends worldwide
In accordance with Shariah principles, international experts revealed that Islamic Fintech is a rapidly growing sector that leverages technology to deliver financial services. This innovative method is reshaping the way Islamic finance is conducted, providing greater accessibility, efficiency, and inclusivity. Islamic Fintech solutions encompass a broad range of services, counting digital payments, crowdfunding, peer-to-peer lending, wealth management, and insurance. By combining traditional Islamic financial rules with cutting-edge technology, Islamic Fintech aims to meet the evolving needs of Muslim consumers and businesses while upholding ethical and socially responsible practices.
Presently the Islamic Fintech sector has experienced substantial growth, propelled through technological advancements and the rising demand for Shariah-compliant financial services.
Statistics showed that the worldwide Islamic Fintech market was valued at $100 billion, showing almost 0.9 percent of total Fintech transactions globally. Projections indicate that the market is set to enlarge to $180 billion by 2026, with a compound annual growth rate (CAGR) of 17.9 percent, surpassing the overall worldwide Fintech industry growth rate. It is also recorded that the Islamic Fintech industry has seen rapid growth, with over 400 active startups and an expectation for continued expansion. Investment trends in Islamic Fintech are on the rise, driven by the promising future prospects of the industry. Moreover, there is increasing interest in Artificial Intelligence and Blockchain technologies for personalized financing and the development of Islamic Fintech applications, respectively.
Governments are also paying attention to Islamic Fintech regulations. Saudi Arabia, Malaysia, Indonesia, and other emerging countries like Bahrain, Bangladesh, Egypt, Iran, Jordan, Kuwait, Nigeria, Oman, Pakistan, Qatar, and Türkiye are the major contributors to the Islamic Fintech sector.
Experts also revealed that the Islamic Fintech industry is at a turning point, where innovation, regulation, and investment must work in harmony to create sustainable and ethical financial solutions.
Finance industry
On the other hand, the Islamic finance industry, presently valued at about $4 trillion, across over 80 countries, with a significant portion concentrated in a handful of markets.
Analysis of various sources reveals that nearly 95 percent of the world’s Shariah-compliant assets are held by just 10 countries. Islamic banking assets stand at $2.37 trillion, representing 70.21 percent of the overall Islamic financial services industry, with the GCC region leading the way. From 2018 to 2023, the sector recorded a CAGR of 10.72 percent, driven by financing and deposits.
Beyond banking, the global Takaful market is also thriving, with expectations of growth from $33.14 billion in 2024 to $51.75 billion by 2028, reflecting a CAGR of 12.2 percent. Similarly, the Sukuk market has gained remarkable momentum, with global issuance projected to reach $170 billion in 2024 and total outstanding Sukuk surpassing $875 billion.
Statistics showed that the Islamic finance market size is expected to see rapid growth in the next few years. It will grow to $12.45 billion in 2028 at a CAGR of 11.7 percent. In the list of developing countries, Pakistan, one of the largest Muslim-majority nations in the world, has yet to establish a fully operational Islamic Digital Banking. Despite the growing demand for Shariah-compliant banking solutions, the country remains shockingly behind in the race to lead the global Islamic fintech market. While countries like Malaysia, Indonesia, and the UAE have successfully launched digital banks that align with Islamic financial principles, Pakistan has failed to get even a single fully digital Islamic bank off the ground. Statistics also showed that the demand is massive.
Over 77 percent of Pakistan’s banking customers prefer Shariah-compliant financial products, yet the options available remain limited. Sources recorded that the five digital banking licenses issued through SBP were expected to pioneer this space. However, as of 2025, no major progress has been seen, raising concerns about whether these digital banks were ever equipped to handle such a task. There is a fundamental difference between an Islamic bank’s mobile app and a fully digital Islamic bank—a difference that seems to be lost.
Most Islamic banks in Pakistan have mobile apps, but these merely serve as extensions of traditional banking services rather than fully digital banking ecosystems. During July-September 2024, assets of Islamic Banking Institutions (IBIs) have increased by Rs 192 billion and were Rs 9,881 billion in comparison to Rs 9,689 billion in the preceding quarter. As per SBP report, the market share of Islamic banking assets in overall banking industry assets was registered at 19.0 percent. The breakdown of Islamic banking assets reveals that the share of financing (net) reached at 32.9 percent, whereas investments (net) was registered at 48.6 percent.
No doubt, investor confidence in this sector has taken a massive hit. In our country initial enthusiasm for fintech was strong, however, the continued delays, lack of concrete action, and absence of a clear roadmap have driven various investors away. The failure of Islamic digital banking to materialize is not just a missed opportunity— in Islamic finance it is a serious setback for Pakistan’s aspirations to be a global leader. Yet investor interest in Islamic Fintech is said to be high because of the potential for its growth on notable demand from the population. The present government of Pakistan is still trying to provide a clear regulatory framework, best digital infrastructure, market awareness, ethical standards, and alignment with worldwide Islamic finance practices.