IBFTech4D: Islamic Business & Financial Technologies (IBFTech) for Development

While technology is proving to be a major disruptor of the global business and economy, Islamic business and finance is not untouched by this development. Countries that have embarked on a strategy that would ensure a growing share of the financial pie for Islamic business and financial service providers, are keen to create an enabling environment for technology applications in the halal ecosystem including the Islamic financial services sector. The introduction of cutting-edge technology brings in its own Shariah issues and challenges that need to be resolved.

This course aims to provide the participants with a comprehensive understanding of the digital economy landscape across the globe, focusing on the predominantly Muslim societies. It seeks to introduce block chain and other cutting-edge technologies in a non-technical manner as also the basic building blocks of IBFTech, such as, platforms, crypto assets, tokens and digital identities. It discusses various use cases of IBFTech in the halal supply chain as well as in the for-profit and not-for-profit segments of Islamic finance. It highlights the key Shariah issues and regulatory concerns and undertakes a discussion of sample IBFTech regulations that capture these concerns.

The course covers the following major areas in five modules:

1. The Digital Economy Landscape: This module provides an introductory overview of Islamic business and financial technologies (IBFTech) as it has evolved over the years, focusing on developments post global financial crisis in 2007-08. It seeks to present an overview of IBFTech ecosystem across the globe with an in-depth analysis of the evolving ecosystem in Muslim countries and societies with predominantly Muslim population. It introduces the enabling technologies in general, and block chain, smart contracts and distribute ledger technologies in particular, in a non-technical fashion.

2. The Building Blocks of IBFTech: This module undertakes a comprehensive review of the building blocks of IBFTech, which includes the more popular crowdfunding platforms and the not-so-popular (perhaps frowned upon by some central banks and governments) crypto-currencies. The modules provides a balanced view of some unique Shariah-issues with such platforms as well as cryptos that have often elicited divergent views from scholars. The unique idea of digital identity and tokens is covered at a conceptual level along with the relevant Shariah analysis and perspectives from empirical research.

3. BlockchainTechnology Applications in Islamic Business & Finance: This module undertakes a comprehensive review of blockchain and other technology use cases in the field of altruism-based finance (zakat, sadaqa and waqf); not-for-profit finance (qard al-hasan, kafala), commercial finance (e.g. sale or trade-based finance, lease finance, takaful, investments) as well as in halal business. It presents existing and potential areas of technology applications and use cases in these areas focusing on the benefits they bring in, challenges for future and possible ways to address them. Real-life case studies in the area are discussed.

4. AI Applications in Islamic Business & Finance: This module undertakes a comprehensive review of AI use cases relating to Islamic business and finance – in Islamic commercial finance, social finance as well as in halal business sectors. It focuses on how technological innovations can bring about greater efficiency in these sectors and lead to improve Shariah compliance. Real-life case studies in the area are discussed.

5. Policy and Regulatory Framework for IBFTech: This module discusses the evolving regulatory framework for IBFTech in several countries with a vibrant halal business and financial services sector with a focus on regulatory concerns that may involve trade-offs. The concerns for giving a fillip to the micro, small and medium enterprises as well as enhancing financial inclusion through IBFTech and encouraging innovation and enhanced efficiency is juxtaposed against the concern for systemic stability and Shariah compliance. A few sample regulations relevant for Islamic IBFTech sector are discussed.