Smart cards boosting Islamic banking software market growth
Smart cards issued by Islamic banks is driving Islamic banking software market growth, with a trend towards adoption of blockchain technology, according to Technavio.
New York: Smart cards issued by Islamic banks is driving Islamic banking software market growth, with a trend towards adoption of blockchain technology, according to Technavio.
The market research firm further said that the global Islamic banking software market size is estimated to grow by USD 3.28 billion from 2024-2028. The market is estimated to grow at a CAGR of 11.53% during the forecast period.
"However, lack of expertise, awareness and training in islamic banking software poses a challenge", it added.
Key Islamic banking software providers
Key Islamic banking software market players include AutoSoft Dynamics Pvt Ltd, Azentio Software Pvt Ltd, Bank Albilad, Bank Alfalah Islamic Banking, BML Istisharat SAL, Codebase Technologies FZE, Craft Silicon Ltd, First Abu Dhabi Bank PJSC, ICS Financial Systems Ltd, INFOPRO Sdn Bhd, Infosys Ltd, International Turnkey Systems Group, Millennium Information Solution Ltd., Nucleus Software Exports Ltd, Oracle Corp, Sopra Steria Group SA, Tata Consultancy Services Ltd, Temenos AG, and Virmati Infotech Pvt Ltd.
"The Islamic banking industry is experiencing digital transformation, driven by the adoption of blockchain technology, IoT, and supply chain analytics. This technological shift is particularly noticeable in industry verticals like Banking, Financial Services and Insurance (BFSI) and manufacturing", Technavio said in a report.
Blockchain enables real-time tracking of end-to-end transactions, using technologies like Smart Contracts for seamless online transactions. Cloud computing solutions facilitate IoT implementation, allowing manufacturers to connect sensors and devices, reducing per-person access costs, and fostering collaboration with suppliers and customers.
"The flexibility and rapidly changing technology landscape are expected to increase demand for hosted and cloud-based solutions in the Islamic banking software market", Technavio said.
Islamic finance institutions catering to large enterprises, mid-sized companies, retail sector, SMEs, and large corporations are integrating smart cards, sukuk issuances, and automation into their processes boosting the growth, the market research firm said.
Challenges
Despite impressive growth projections, the Islamic banking software market faces several challenges in the dynamic banking industry.
"Industry saturation poses competition among software providers to offer innovative solutions to Islamic banks, large enterprises, mid-sized companies, and SMEs", Technavio said.
Technavio Research further said that the integration of advanced IT products and services into Islamic banking systems is a complex process for many financial institutions.
"While the adoption of new technology can enhance customer service and product offerings, it necessitates specialized training for banking staff. Providing this training is a significant challenge due to the time, cost, and resources required. Failure to adequately train staff may result in misaligned products and a damaged brand image", it said.
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