Tuum launches foundational Islamic Banking and Finance Solutions

By Gloria Mathias

Tuum, the next-generation core banking provider, has announced the launch of its foundational Islamic Banking and Finance solutions, marking a step towards delivering comprehensive, Sharia-compliant financial services.

This initiative focuses on the key principles of Islamic banking, laying the groundwork for a full end-to-end platform designed to support the needs of Islamic financial institutions.

With this launch, Tuum is creating the necessary infrastructure for Islamic deposits and asset-based lending, two critical components of a broader Islamic banking system. This Minimum Viable Product (MVP) ensures that financial institutions can offer products that fully comply with Sharia law while preparing for further expansion into a complete Islamic banking suite.

“This is an exciting milestone for Tuum as we take our first steps into the world of Islamic banking,” said Miljan Stamenkovic, VP of EMEA at Tuum. “By focusing on the foundational elements of Sharia-compliant financial services, we are empowering financial institutions to meet the growing global demand for inclusive and ethical banking products. Our platform’s flexibility and scalability will enable banks to innovate while ensuring that their offerings align with Islamic principles.”

At the heart of this launch is the development of a profit-sharing system for Islamic deposits based on the concept of Mudarabah (profit-sharing). This system allows returns to be generated through legitimate economic activities, with profits shared between banks and depositors according to pre-agreed ratios rather than through interest-based income.

The critical elements of this system include:

• Sharia Compliance: Ensuring that all lending is conducted according to Islamic finance principles, linking financing to actual economic activities.
• Profit and Risk Sharing: Creating structures that share both risks and profits in line with Islamic ethical finance principles.
• Scalable Growth: Providing a foundation for future Islamic finance models, including Murabaha, Ijara, and Musharakah, to create a comprehensive Sharia-compliant financing ecosystem.

While the initial focus is on deposits and asset-based lending, Tuum is committed to evolving its platform to support the full spectrum of Islamic finance. This initiative aligns with the rising global demand for Sharia-compliant banking and will empower financial institutions to offer inclusive, ethical banking products.