Khaled Berjawi
SVP Product Management – Global Islamic Banking
Kazakhstan has just taken a significant step forward in the modernization of its banking sector. With recent regulatory reforms enabling Islamic banking windows, the market has shifted from a model where Islamic banking was largely limited to specialist institutions, to one where universal banks can offer Sharia-compliant products through dedicated internal divisions. That may sound like a technical change, but its commercial implications are anything but.
In practical terms, Kazakhstan has just made Islamic banking scalable.
And for banks in the country, this creates a rare opportunity: the ability to build Sharia-compliant propositions in a phased, controlled way, without the cost and complexity of launching a standalone Islamic bank.
At Azentio, through iMAL, we’ve supported Islamic banks and Islamic windows across multiple markets and regulatory environments for decades. That experience matters here for one reason: while every market is unique, Islamic windows tend to succeed or fail on the same few fundamentals. The banks that treat windows as a strategic capability, not just a product launch, are the ones that build real momentum.
Kazakhstan now has the chance to do this properly, from the start.
Islamic banking in Kazakhstan has been under-supplied, not necessarily low-demand
Kazakhstan has a mature banking sector with more than 20 second-tier banks, yet Islamic banking has historically been served by only a small number of dedicated providers. That has limited product availability, distribution reach, and customer awareness.
In many markets, this creates a misleading picture. Demand can exist without being visible in market share, simply because customers haven’t been offered Sharia-compliant products through the banks and channels they already use. Islamic windows solve that problem.
Instead of asking customers to switch banks entirely, Sharia-compliant products can now be offered inside mainstream banks, through existing branch networks, relationship managers, and digital channels. This is why windows have proven to be one of the most effective ways to expand Islamic banking globally: they make it accessible, without forcing customers into a specialist-only ecosystem.
Why this reform matters: Islamic banking becomes a mainstream capability
Islamic finance is often misunderstood as being purely religious. In reality, it is also a set of financial principles and product structures that appeal to multiple segments, for multiple reasons, from Sharia compliance to ethical finance preferences, from transparency to asset-backed structures.
In Kazakhstan, the most important lens is not “Islamic banking as a parallel system.” It is Islamic banking as an expansion of product capability, one that can strengthen competitiveness across retail, SME, and corporate banking.
The banks that will benefit most are those that view Islamic windows as a platform: a governed, scalable capability that can start small, prove traction, and expand over time.
Where banks can see early traction
In most markets, Islamic windows do not succeed by launching everything at once. They succeed by choosing the right early product set, building confidence internally, and scaling from there.
For Kazakhstan, four areas stand out as likely early momentum drivers.
The first is retail deposits. Many banks assume Islamic banking begins with financing, but deposits are often the strongest starting point because they build trust and relationships before customers take on longer-term commitments. Sharia-compliant deposit structures can help banks attract new-to-bank customers, retain values-driven segments, and differentiate in a competitive retail market.
The second is SME finance. SMEs often struggle with rigid underwriting, collateral-heavy structures, and limited tailored facilities. Islamic structures can provide practical alternatives for working capital, asset finance, and trade-linked funding, particularly when designed responsibly and delivered with strong governance.
The third is corporate and trade finance. Kazakhstan’s economy is deeply connected to cross-border trade flows and large corporate sectors such as energy, infrastructure, logistics, and commodities. Islamic finance is globally proven in asset-backed financing and trade-linked structures, and Islamic windows give banks the capability to compete for flows where Sharia-compliant options are increasingly required due to counterparties, ownership structures, or funding sources.
Finally, affluent and wealth segments often become an early profitability driver. Even in markets with low overall Islamic penetration, affluent customers tend to adopt earlier because they have more complex needs, more cross-border exposure, and stronger demand for aligned investment structures.
None of these opportunities require Kazakhstan to become “an Islamic banking market overnight.” They simply require banks to offer choice, in a disciplined and scalable way.
The critical point: Islamic windows are not lightweight
One of the reasons windows are commercially attractive is that they reduce the barrier to entry. But banks must not confuse “lower barrier” with “low effort.”
Across markets, the banks that struggle with Islamic windows tend to face the same issues, and they are rarely about product brochures, they are about operating discipline.
The first is segregation and transparency of funds. Sharia compliance is not only about product contracts; it is also about how funds flow through the bank. Banks need ring-fencing where required, clear accounting treatment, auditable profit calculation, and disciplined treasury handling.
The second is Sharia governance. A successful window needs more than a one-time Sharia sign-off. It needs an approval and oversight model that is robust enough to satisfy regulators and customers, but practical enough to support speed and scale.
The third is capability. Islamic windows cannot be run as a side project. Banks need trained product specialists, frontline enablement, and clear internal messaging on what is and isn’t compliant, particularly in early markets where customer education and staff education often happen in parallel.
And the fourth is technology. Islamic banking introduces operational differences that affect product configuration, profit calculation, contract workflows, ledger treatment, and reporting. Banks that try to run windows through manual workarounds typically struggle to scale, and often introduce avoidable compliance and operational risk. Banks that invest early in Islamic-capable infrastructure can move faster, operate more safely, and build customer experiences that feel modern rather than experimental.
Kazakhstan is not a market for generic playbooks
One of the most important points for international observers is that Kazakhstan is not an “emerging Islamic banking market” in the way some countries are described.
Kazakhstan has a mature banking sector, sophisticated customers, and a competitive environment. It also has clear national ambitions to modernize financial services and strengthen its position as a regional hub.
That means Islamic windows will not succeed through imported playbooks or generic market assumptions. They will succeed through pragmatic product strategy, disciplined governance, and a customer-first experience that fits Kazakhstan’s banking reality.
This is not about replicating models from elsewhere. It is about building an Islamic window approach that works for Kazakhstan.
Moving from regulation to results: how banks can execute quickly and safely
Banks do not need to launch everything at once, but they do need a structured approach.
In our experience supporting Islamic banks and windows across multiple regulatory environments, the most successful rollouts follow a phased model: define the target segments, choose a focused initial product set, establish governance and segregation early, and ensure technology and reporting can scale before expanding.
The banks that move early, and build properly, will shape customer expectations, talent pools, and product leadership in the market. Because while regulatory change opens the door, execution determines who walks through it first.
A rare first-mover moment
Islamic banking windows represent one of the most commercially realistic opportunities for banks in Kazakhstan to expand product capability, deepen customer relationships, and strengthen competitiveness.
But the advantage will not go to the banks that simply launch first. It will go to the banks that launch with discipline, credibility, and a scalable foundation.
At Azentio, through iMAL, we have supported banks and financial institutions through similar transitions across multiple markets, including the move from standalone models to Islamic windows and hybrid banking approaches. And while every market has its own dynamics, one principle remains consistent:
When regulation opens the door, the banks that win are the ones operationally ready to walk through it.
Khaled Berjawi
SVP Product Management – Global Islamic Banking