Islamic banking is entering a defining growth phase. As demand grows, Islamic banks are under growing pressure to deliver faster digital experiences, launch Shari’ah compliant products with greater speed, strengthen governance, and scale efficiently. That pressure is placing the core banking environment under sharper scrutiny, because the systems, controls, and operating models that once supported steady growth must now support a more demanding, digital, and regulated future.
Global Islamic finance assets reached $5.98 trillion in 2024. As the sector grows, so does the question of whether the technology foundations supporting it are keeping pace.
This whitepaper, produced in partnership with IBS Intelligence, examines why the core banking system has become central to how Islamic banks grow, govern, and compete, and how a modern Islamic core can unlock new growth opportunities for banks.
What's inside
Research and perspectives from senior banking executives across the GCC and Southeast Asia, covering:
- Why legacy core systems slow Islamic product innovation
- How “Shari’ah-by-design” strengthens control
- How GCC regulation is enabling cloud-based Islamic banking
- A 4-stage connected core maturity model
- Case study: How Vision Bank launched ADGM's first digital Islamic corporate bank on an AAOIFI-certified core from day one
Who this whitepaper is for
This whitepaper is written for senior decision-makers at Islamic banks evaluating core banking strategy across the GCC, Southeast Asia, and Africa. That includes Islamic windows within conventional banks weighing infrastructure separation, digital-first institutions designing greenfield operating models, and established banks assessing whether their current core can support the next decade of growth without structural risk.
Why core banking architecture has become a strategic question
For most Islamic banks, their existing core banking system was chosen for reliability. It handled transaction processing, product execution, and compliance workflows well enough for the pace the market required at the time.
The pace has changed. Digital channels, fintech partnerships, real-time payments, and tighter regulatory reporting have all raised the bar on what the core needs to deliver. Banks that have built digital capability on top of legacy infrastructure are now reaching the limits of that model, as the underlying architecture becomes a constraint on speed, control, and scalable growth.
Core banking modernization in this context means more than a technology upgrade. It decides how Shari'ah governance, product configuration, and compliance controls are structured at the system level, before new channels and partnerships are added on top.
Customers today are choosing based on experience and solutions, not brand legacy
Khalid Al Hoqani
Head of IT, Alizz Islamic Bank
What Shari'ah-by-design means in practice
Shari'ah-by-design is an approach where approved Islamic finance rules, governing contract types, profit calculations, ownership transfer sequences, and prohibited transaction structures, are built directly into the core banking system's product logic. Compliance runs at the point of execution and generates an audit trail automatically, rather than being validated separately after transactions process.
The practical difference? Banks with this architecture can demonstrate Shari'ah compliance at transaction level to AAOIFI and IFSB standards without assembling manual documentation packages. Internal Shari'ah audits that previously took weeks now run in just hours.
About this whitepaper
This whitepaper is produced by Azentio in partnership with IBS Intelligence, drawing on executive interviews and market research across the GCC, Southeast Asia, and Africa. iMAL, Azentio's AAOIFI-certified Islamic core banking platform, has live deployments across the Middle East, Africa, and Asia.
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