Over 280 million people in Southeast Asia identify as Muslim, generating demand for halal food, modest fashion, and cosmetics free of pig-derived ingredients or alcohol. Islamic finance in the region grew to roughly $859 billion in 2023, indicating rapid expansion alongside conventional banking. Financial technology firms like Mambu are targeting Malaysia and Indonesia with cloud-native, composable core banking platforms to support shariah-compliant products such as profit-sharing and leasing. Islamic banks must avoid "haram" sectors and cannot charge interest, so they use alternative return mechanisms. Younger, mobile-savvy populations are expected to adopt digital, faith-aligned financial solutions.
Over 280 million Southeast Asians, about 40% of the region's population, identify as Muslim. That's spawned demand for goods and services that cater to a more Islamic lifestyle. It's more than just halal food: Muslim consumers also demand more modest fashion or cosmetics that don't use pig-derived products or alcohol. Even Southeast Asia's finance sector is becoming more halal. Islamic finance in Southeast Asia totaled roughly $859 billion in 2023, up from $754 billion in 2020.
Mambu, a cloud-native, software-as-a-service, composable core banking platform based in Amsterdam, wants to tap this growing market. "The Southeast Asian market, particularly Malaysia and Indonesia, is incredibly dynamic in terms of how they've grown in the Islamic banking space," says David Becker, managing director and head of APAC sales at the firm. The company already works with Southeast Asian clients like Bank Islam, Malaysia's largest provider of shariah-compliant financial products, and Bank Jago, an Indonesian digital bank.
Unlike in conventional banking, Islamic financial institutions must avoid companies that deal in products that are harmful or considered "haram", like pork, alcohol, or gambling. Islamic banks also can't charge interest and so must instead generate a return through some other mechanism, like profit-sharing or leasing. Becker is optimistic that Southeast Asia's younger and more mobile-savvy population will gravitate towards digital financial solutions-and particularly those that reflect Islamic principles.
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