DON: Islamic fintech startups must refer to shariah advisor to avoid product violation

KUALA LUMPUR, Jan 27 -- Islamic financial technology (fintech) startups must refer to the shariah specialist or advisor to ensure that the shariah product is not violated. 

Senior lecturer at the Universiti Sains Islam Malaysia Dr Azrul Azlan Iskandar Mirza said that failure to do so from the beginning, once the product is in the market could have reputational issue to the institutions that created and developed the product.

"Once we want to develop a sophisticated product, especially in fintech, we talked about the smart contract, the transaction can be done within milliseconds, is that allowable from a shariah point of view? 

"So, the sequence of the transaction, the effect of the transaction, we must take a look. That's why we need more specialists to look into developing this product," he said during a panel discussion on the fourth day of MyFintech Week 2022 today.

Meanwhile, Ethis Global co-founder Umar Munshi had proposed that Malaysia should have an open source of shariah financial. 

"All the basic stuff, important components that are the fundamentals in general are there. So, there could be more open source, much more community based, open shares and now as a service.

"If this happen, I think the shariah industry will focus more on the value creation side. So that's what is needed, not only basic information or basic theory," he said. 

He added that if the open source is readily available, it will help the startup and the shariah industry to step up in terms of value creation and contribute to shaping fintech. 

Umar also noted that the real big value that shariah fintech could bring is the value creation component. 

-- BERNAMA