Open banking and fintech partnerships drive new growth as Gulf Islamic banks adapt to evolving sukuk standards and regulatory shifts.

By Sadiq Abdulfatah

The evolution of Islamic banking across the Gulf Cooperation Council (GCC) is accelerating, driven by innovation and stronger regulation.

A major force behind this growth is open banking, a framework that lets customers securely share financial data with third-party providers, creating new business opportunities, especially among small and medium enterprises.

Islamic banks are embedding Shariah-compliant products into real-time cash management, collections, and payment systems while expanding partnerships with fintechs to enhance efficiency and reach.

GCC regulators are backing these moves, with the Saudi Central Bank launching an open banking platform under the Vision 2030 initiative to promote transparency and corporate integration through standardized APIs.

The sukuk market is also maintaining steady growth, with S&P estimating $200 billion in issuance for 2025, up 4% year on year.

However, a new guideline — AAOIFI Standard 62 — could reshape the market by shifting focus from sponsor-backed to asset-backed structures, exposing investors to higher risk and potentially fragmenting the market.

At the top of the 2025 ranking of the Safest Islamic Banks in the GCC is Al Rajhi Bank, the world’s largest Islamic lender.

The bank secured the number-one spot following a Moody’s upgrade to Aa3, aligning with Saudi Arabia’s improved sovereign rating and reinforcing Al Rajhi’s reputation for financial strength and stability.

Source: World Finance