ITFC: Islamic finance benefits from global crises

Islamic finance has benefited from global crises due to its reliance on real assets, Nazeem Noordali, Chief Operating Officer of the International Islamic Trade Finance Corporation (ITFC), said at the 2nd Azerbaijan Halal Business (AZHAB) Forum in Baku, Report informs.

However, Noordali highlighted that Islamic finance still faces several challenges, the most significant being geopolitical tensions. "Tariff disputes between Russia, China, and the United States have a real impact on investment decisions. If you don't know what the tariff will be, you're unlikely to commit to major investments. That's why people are waiting."

He also pointed to increasing compliance demands as another growing concern in Islamic finance: "We're seeing a rising need for trade-based compliance mechanisms, as these are becoming key risk areas. For example, following developments in Russia, the US and Europe have started changing the rules on how compliance should be handled. These regulations are emerging almost weekly, even daily. You need to stay informed-otherwise, you risk penalties when making payments to suppliers in trade or business."

Emphasizing the importance of artificial intelligence (AI), Noordali noted that the use of AI platforms has boosted efficiency by up to 40% and accuracy by up to 95%. "AI is transforming the industry-from document processing to climate screening. This especially affects trade finance and transaction banking, where you must process all financing on behalf of your client."