Crowdfunding Islamic Banks

As some areas of banking face competition from peer-to-peer lenders, #Malaysia’s Islamic Financial Services Act 2013 included provisions that can build some of the same types of disruptive innovation into the Islamic banking marketplace. One of the most important was the launch of the Investment Account Platform (IAP) in February 2016 which is a crowdfunding platform owned by Malaysian Islamic banks. The IAP serves as a way to measure customer interest in crowdfunding as an alternative to traditional bank deposits. The investment account growth in Malaysia demonstrates an opportunity for IAP and other innovative FinTech platforms. Islamic banks should realize that they have within their guiding principles a call to embrace risk sharing rather than risk shifting.