UAE poised to bridge Islamic finance gap as global assets near $6 trillion

DUBAI, UNITED ARAB EMIRATES, 22 SEPTEMBER 2026 —

Standard Chartered’s latest report identifies the UAE as the linchpin for unlocking underutilised Islamic capital flows to high-growth markets, where only 6% of global sukuk currently reaches South Asia and Africa.

The UAE’s geographic and regulatory advantages position it to lead this shift. As a crossroads between the GCC, Europe, Asia, and Africa, the country has built a digital finance ecosystem—backed by progressive virtual asset regulations—and a National Strategy for Islamic Finance and Halal Industry 2031 to deepen its role as a global hub.

The strategy focuses on expanding Islamic capital markets and domestic Islamic banking assets, aligning with the report’s emphasis on infrastructure finance, private credit, and sustainable investment as key drivers of future growth.

Khurram Hilal, CEO of Group Islamic Banking at Standard Chartered, framed the challenge as one of liquidity distribution, not scarcity. “Islamic finance is becoming a critical enabler of cross-border connectivity,” he said. “The issue isn’t a lack of capital—it’s how to move it efficiently across borders as trade routes evolve.” He warned that institutions must develop Shariah-compliant financing structures and digital capabilities to capitalise on emerging economic corridors linking the GCC, Türkiye, and Africa.

The report highlights tokenisation, digital assets, and cross-border payment infrastructure as critical enablers. These technologies could reduce friction in capital flows, particularly for sukuk and trade finance, where paper-based processes remain inefficient. Standard Chartered, with one of the world’s largest Islamic banking franchises, is positioning itself as a connector between capital providers and high-growth markets through Shariah-compliant solutions and regional market access.

For Malaysia, the findings underscore both an opportunity and a competitive dynamic. While the country remains a top-tier sukuk issuer—ranking among the largest globally—its share of capital directed to Southeast Asia and Africa lags behind the UAE’s expanding role. Bank Negara Malaysia’s push for digital Islamic finance and cross-border sukuk initiatives aligns with the report’s emphasis on connectivity, but the UAE’s regulatory agility and geographic centrality give it a structural edge in capturing liquidity flows.

The shift toward blended finance and sustainable Islamic instruments also presents a test for Malaysian issuers. As global investors increasingly demand ESG-aligned sukuk, the UAE’s ability to package Islamic finance with green and social mandates could attract capital away from traditional hubs. Malaysian issuers, including Maybank Islamic Bhd and CIMB Islamic Bank Bhd, will need to sharpen their digital and structuring capabilities to compete.

The report’s central thesis—that Islamic finance’s future lies in connectivity, not isolation—challenges banks to move beyond niche product offerings. Standard Chartered’s Hilal stressed that trusted cross-border networks will determine which institutions thrive. For the UAE, this means leveraging its regulatory sandbox for fintech, its GCC-Africa trade corridors, and its halal investment ecosystem to become the default route for Islamic capital seeking high-growth destinations.

With global Islamic assets set to grow, the UAE’s strategy could redefine regional finance—not just as a funding source, but as a bridge. The question for Malaysia and other hubs is whether they can match its speed of execution in digital and trade finance infrastructure. The report suggests those that do will shape the next wave of Islamic capital deployment.

Related: Standard Chartered · Khurram Hilal · Dubai, United Arab Emirates