Islamic finance is transforming into a pivotal connector for global capital, trade, and digital infrastructure, according to a new report by Standard Chartered. The report, titled ‘Islamic Banking for Financial Institutions: The Islamic Finance Connector Era’, highlights the industry’s evolution from a traditional funding source to a strategic bridge linking liquidity-rich markets with burgeoning economies.
The report reveals that Islamic finance now encompasses approximately US$6t in assets across nearly 100 jurisdictions. This growth positions it as a critical enabler of capital flows between regions such as the Gulf Cooperation Council (GCC), ASEAN, South Asia, and Africa. Despite this, only 6% of global sukuk capital currently reaches South Asia and Africa, indicating a significant opportunity for expansion.
Khurram Hilal, CEO of Group Islamic Banking at Standard Chartered, emphasised the growing importance of Islamic finance in facilitating cross-border trade and investment. “Islamic finance is becoming a critical enabler of cross-border connectivity,” he stated, urging financial institutions to integrate Islamic finance into their strategic agendas.
The report identifies three emerging trade corridors—GCC-centred, China-centred, and Middle East-Türkiye—as priority channels for Islamic finance. These corridors are expected to enhance trade, investment, and working capital flows, bolstering the resilience of global commerce.
Additionally, the report underscores the potential of digital assets and private credit in expanding Islamic finance’s reach. As digital infrastructure becomes increasingly vital, tokenisation and digital assets could improve efficiency and broaden investment opportunities across markets.
Standard Chartered, the only international bank with a global Islamic banking franchise, continues to support clients through Shariah-compliant solutions and cross-border capabilities. The full report is available on their website for those interested in exploring these emerging opportunities.
