Tehran (IQNA)- The emergence of Islamic finance in Australia is just the start of a huge moral finance debate that banks have been trying to preserve for years.
Gustavo Quiroga, managing director of the digital services company “Mobiquity” in Asia and the Pacific, in a note published on this website, referring to the social obligations of banks, wrote: “Environmental, social and enterprise (ESG) has become the finance industry’s buzzword in 2022. However, while everything looks great at first glance, customers are starting to question the commitments of banks and financial institutions, not only in the environmental governance, but also towards their social counterparts.
This month, Islamic Bank of Australia (IBA) received its banking license from the Australian Prudential Regulation Authority (APRA). Although this is a limited license, it is an exciting initiative for financial inclusion and ethical offerings in the local banking and financial services industry.
A study by Islamic financial services provider ‘Hijaz’ shows that one in three Australian Muslims admits to losing significant cash savings, due to a lack of suitable financial options. To avoid embezzlement, these people keep large sums of money in their homes and avoid taking out mortgages.
These restrictions not only affect the final price of services from banks and financial service providers, but also have a negative impact on the quality of life of Australian Muslims.
By planning to offer Shariah-compliant loans, through brokerage channels, IBA is competing to provide financial services to this important community of Australian society that is opening up to financial participation. But the inclusion of these services is not just about access to these services, the ABA’s Consumer Banking Trends Report 2021, confirmed that Australians are adapting quickly to the digital age of banking. , bridging the gap in financial inclusion and consumer experience.
However, with rapid advances in technology, banks and financial institutions are being challenged to innovate at the pace customers want – and perhaps even harder – to meet their expectations for successful experiences.
Earlier this year, our digital engineering team at Mobiquity launched a prototype Islamic bank with online funding (murabahah) to support the growing global Muslim community. Developed in just six weeks, the prototype of this Shariah-compliant service enables any financial institution to enrich its Islamic banking services with infrastructure-connected technology.
The rise of Islamic banking is just the beginning of a much broader debate about ethical banking and financial inclusion. A debate that banks have had for decades. The challenge is to keep up with the speed at which society is changing, and technology is at the forefront of influencing these social changes.
Products and services also do not need to be Shariah compliant, for example we need to consider financial support for the one million new immigrants who have become an important part of the Australian economy over the past five years. The answer lies in personalized banking and financial services that meet the wants and needs of these groups, large or small, but important in our society.
In a world where corporate governance and social influence add to brand appeal, ethical awareness must be a priority when developing products and services. This enables consumers to make financial decisions through multiple product options and channels that meet their needs, without compromising their values. This can only be achieved when banks take a customer-behavioral approach to innovation.
Without this approach, the financial inclusion gap will only increase and the result will be a decrease in the financial health of society”.