Islamic FinTech growth accelerates across GCC markets

By Vriti Gothi

The global Islamic FinTech sector is projected to reach $341 billion in transaction volume by 2029, expanding at a compound annual growth rate (CAGR) of 11.5%, as Gulf Cooperation Council (GCC) markets intensify investments in Shariah-compliant digital financial services.

According to a study by DinarStandard and Elipses, conducted in partnership with the Qatar Financial Centre and the Islamic Development Bank Institute, the sector was valued at approximately $198 billion in 2024–25. Growth is being driven by rising demand for digital-first financial services, increasing adoption of Islamic digital banking, and expanding interest in Shariah-compliant digital assets.

Countries across the GCC particularly Saudi Arabia, the UAE, Kuwait and Qatar are positioning themselves as global hubs for Islamic FinTech innovation. Together with key markets such as Malaysia, Indonesia, Iran, Turkey, Bangladesh and Pakistan, these economies account for approximately 93% of global Islamic FinTech activity.

Within the region, Saudi Arabia leads by a wide margin, with an estimated market size of $77.2 billion. The Kingdom’s Islamic FinTech transaction volume is projected to reach $120.9 billion by 2029, supported by strong digital adoption, regulatory initiatives, and broader financial sector modernisation aligned with national transformation goals.

The UAE follows with a market size of $10.5 billion, expected to grow to $15.6 billion over the same period, reflecting the country’s focus on becoming a regional FinTech hub and expanding its Islamic digital finance ecosystem.

Kuwait’s market, currently valued at $8.9 billion, is forecast to nearly double to $16.8 billion, while Qatar’s Islamic FinTech sector is projected to grow from $3.1 billion to $4.8 billion by 2029.

The rapid expansion of Islamic FinTech reflects a structural shift in how Shariah-compliant financial services are delivered. Digital platforms are enabling institutions to lower distribution costs, improve accessibility, and reach underbanked populations across Muslim-majority markets.

The growth trajectory also signals increasing convergence between Islamic finance and emerging financial technologies, including digital wallets, embedded finance, alternative financing platforms and tokenised assets structured to meet Shariah requirements.

For regulators and policymakers, the sector’s momentum underscores the need for harmonised Shariah governance frameworks, cross-border regulatory alignment and innovation-friendly licensing regimes. Several GCC jurisdictions have already introduced regulatory sandboxes, open banking initiatives and digital banking licences to accelerate FinTech development.

As competition intensifies, financial institutions are expected to prioritise partnerships with FinTech providers to modernise core systems, launch digital Islamic products and enhance customer experience. At the same time, investors are increasingly viewing Islamic FinTech as a high-growth niche within the broader global FinTech landscape.

The concentration of activity in a small group of markets suggests that scale, regulatory clarity and ecosystem maturity will be key determinants of future leadership. With strong government backing, high smartphone penetration and growing demand for ethical and compliant financial products, GCC economies are likely to remain central to the sector’s expansion.

As Islamic finance continues its digital transition, the projected growth to $341 billion signals both a maturing market and a widening opportunity for FinTech innovation tailored to faith-based financial principles.