Issuing sukuk through digital platforms and dividing them into smaller denominations could help expand the investor base, Vusal Gasimli, Executive Director of the Center for Analysis of Economic Reforms and Communication (CAERC), said during the opening ceremony of the 3rd Islamic Finance Forum in Baku, Report informs.
According to Gasimli, tokenization could enable more flexible structuring of financial instruments backed by real assets.
"Artificial intelligence (AI) can be used in assessing credit and investment risks, detecting fraud, and supporting compliance processes. Smart contracts can automate the execution of certain Islamic finance agreements, reducing operational costs and increasing transparency. At the same time, digital takaful, Islamic crowdfunding, P2P financing, and digital microfinance platforms can expand access to finance, particularly for small and medium-sized enterprises," he said.
The director noted that the global Islamic finance industry has reached $6.5 trillion, growing at an annual rate of 9%, and is projected to exceed $10.5 trillion in assets by 2030.
He also pointed out Islamic banking remains the dominant segment of the market, accounting for approximately 72%, with assets totaling $4.3-4.5 trillion.
Gasimli added that sukuk outstanding amounts stand at $1.03 trillion, with annual issuance of $264.8 billion, while Islamic funds manage $308 billion in assets. The director highlighted that the takaful sector is valued at $136 billion, and other Islamic financial institutions account for $193 billion.
Gasimli stressed that discussions about the future of Islamic finance should also focus on fintech and digitalization.
"In the coming years, we should increasingly view the development of Islamic finance not only through the concept of 'Islamic finance' but also through the lens of 'Islamic fintech'," he said.
The official further stated that there is a natural compatibility between the principles of Islamic finance and emerging financial technologies: "Islamic finance requires transparency, a connection between transactions and real economic activity or assets, and the sharing of risks and returns. Fintech facilitates data traceability, reduces transaction costs, democratizes financial services, and broadens financial inclusion. These two models complement one another: Islamic finance provides fintech with a framework of values and principles, while fintech gives Islamic finance scale, speed, and accessibility."