Islamic FinTech: EWA, Shariah Compliance, and Regulatory Environment

This presentation provides an overview of Islamic FinTech, explaining the core concepts of FinTech and its evolution, including the rise of Islamic FinTech. It delves into the regulatory environment and the significance of Shariah compliance within the industry. A major focus is placed on Earned Wage Access (EWA) as a specific Islamic FinTech product, highlighting its structure, benefits for both employers and employees, and its Shariah-compliant aspects, contrasting it with conventional non-Shariah-compliant EWA models. The presentation also examines the utility of EWA, addressing its role in providing a reliable and Shariah-compliant alternative to traditional financial challenges faced by salaried individuals, and concludes with a thank you slide.

Islamic
FinTech
 PRESENTED BY:
 MUHAMMAD HUZAIFA-19435
 YALNAZ BAIG-19442
 TAHA QAMER-18978
 MUFADDAL MUNAWAR-19453
 HASAN SABIR-18897

FinTech and
its
Importance
 FinTech-Finance and Technology
 Financial Technology industry
 An industry made of companies that provides
financial services.
 Has been around for decades, gained
popularity recently.
 FinTech firms pace up the financial
transactions of individuals and of companies.
 These transactions are very common these
days, and so FinTech plays a major role here
by allowing access to these services through
technology.

Conventional FinTech
 In the 21st century, FinTech allowed technology to be
used at the back-end systems of financial organizations.
 Now, there has been a shift towards consumer related
services.
 Investment management, education, nonprofit fundraising, and retail
banking, among others are some industries impacted by FinTech
today.
 Bitcoins are also part of FinTech. This sector has the most attention
these days, but the real cash comes is still generated from the
conventional global banking business.
 Global FinTech investment was estimated to reach $135.5
billion by 2021 but the deals drove over an amount of
$210 billion.

Introduction
to Islamic
FinTech
 In Islamic finance, shariah laws and regulations
are of immense importance to the products.
 Right now, the processes are manual but the
introduction of artificial intelligence can
increase efficiency, transparency and save
time as well.
 Islamic fintech represents a relatively small part of the
global fintech industry.
 Many Islamic finance sites are currently using Islamic
crowdfunding.
 Brunei Darussalam, Malaysia, Bahrain, and the UAE
have released FinTech regulatory frameworks that allow
new business models to be tested under regulated
conditions by banks , institutions and start-ups.

Shariah
Compliance
in Fintech
Prohibition of
 Riba
 Gharar
 Maysir

Regulatory environment of Fintech
 One of the most regulated financials services
The Rise of Islamic Fintech
• Quickest Development in OIC
• Yearly development rate of 21%
• Taking the lead

EARNED WAGE ACCESS
 EWA is a system which allows employees to
access their salary before their designated
pay date.
 Considered as a better alternative to
Conventional Monthly Payroll cycles.
 Instead of waiting for the end of the month, a
portion of the salary (50%) can be withdrawn
as is earned.
 EWA is the only fin tech product offered by
Abhi.

Utility due to
EWA
 A large proportion of salaried individuals
live pay cheque to pay cheque with little or
no savings to fall back on.
 Hence, unexpected expenses during the
month are a huge cause of distress.
 The options to fund these expenses are
borrowing from friends or family, ask for
advance salary or take loans.
 This method to deal with contingencies are
not only unreliable but take a toll on self
esteem and are also un islamic.
 EWA proves to be a reliable and shariah
compliant alternative.

Employer
NBP Funds
Customer
Abhi
Signs an
agreement with
Customer
Signs an agreement with the
employer
Opens Investment Accounts

Customer Abhi
Makes a request for advance
salary
NBP Funds
Sells the initially purchased
units. NBP Funds will purchase
those units on behalf of the
customer, on deferred
payment basis with a margin
Sells units on spot

Customer Abhi Bank
Account
Deposits the sale proceeds in Abhi’s
Account
1LINK
1LINK pulls the funds
NBP Funds Disburses the funds into customer’s
account
Abhi
Customer repays the price of
unit sold on deferred basis

ABHI’s Shariah
Compliant Product
Structure
• Abhi’s EWA product has been certified
to be Shariah Compliant by ESAAC
• Abhi’s product structuring
• Abhi’s EWA is asset-backed
How does EWA help employers?
• Increased Retention: A Mercator study
showed that on-demand pay can reduce
employee turnover by upto 73%
• Better Employee Experience: Leads to
increased productivity, innovation, and
engagement
• Faster Hiring: Job openings that feature on-
demand pay receive twice as many
applications because workers are actively
seeking jobs that offer more flexible pay
options