Ongoing growth of Islamic finance entices Western institutions. The move further reflects the maturity of the banking industry in traditional markets. Worth emphasizing: The perception of Islamic finance globally becomes more-and-more substantial.
Mambu, an Amsterdam-based company working as a service provider to banking institutions, now looks farther afield to enlarge its client base. Malaysia and Indonesia are in the crosshairs. Depending on size of commitment, this initiative could easily become a multi-million dollar business. We suspect the return-on-investment will be meaningful, given the combined potential of digital banking and Islamic banking in the region. “We just see it growing and growing, and I think that’s a factor in why governments and regulators have been so supportive,” asserts a Mambu executive.
However awkward to explore, this case study could be another example of deflated expectations. Limited-scale strategic plans quickly grow into outsized, if not uncomfortable, outlays as business partners and regulators demand more-and-more local-market commitment. And seemingly innocuous knowledge-sharing can become a form of technology transfer, giving rise to local-market competitors with ingrained business networks.
One obvious benefit for a European counterparty is that there is probably less cross-border hostility toward their products and services than there may be for a US company. Washington-induced changes in global trade activity have largely impacted manufactured goods, but does a breakdown in the flow of global services loom on the horizon? Certainly, European firms operate internationally with a greater comfort zone. ■
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Image shows Istiqlal Mosque in Jakarta, the largest mosque in Southeast Asia. Credit: Ibra Nurlette at Adobe Stock.