Islamic Finance

Sharia’a Scholars play a pivotal role inthe Islamic Finance sector, as only with their explicit approval can a product or transaction be deemed Sharia’a compliant. There is a recognized shortage of suitably qualified Sharia’a Scholars serving an increasing number of Islamic Finance institutions, making access to Sharia’a input challenging.

At Deloitte, we embed Sharia’a advice within our team. Our Sharia’a Scholars and subject matter experts provide innovative, market leading advice. Our expertise includes overseeing complex restructurings and the conversion of conventional financial institutions’ core banking systems and operating models to fully Sharia’a-compliant frameworks. We also identify gaps in systems and IT capabilities to support Sharia’a-compliant product offerings and drive operational excellence.

Our expertise spans both Takaful and conventional insurance, enabling us to provide practical insights from first principles—a critical factor in this developing industry where precedents andstandards are still evolving. We offer a holistic service across strategic and operational needs, from feasibility and market entry strategies for new Takaful businesses to performance improvement for established operations. We also represent Deloitte globally in discussions on IFRS 17 and its implications for Takaful operators, and lead technical accounting advisory engagements supporting Islamic Banks and Takaful operations on IFRS and FAS standards, including IFRS 9, 17, and related financial instruments.

1. Strategy Development:

We develop your strategy through hypothesis-driven analysis, leveraging deep industry knowledge and recent market insights to ensure your business is positioned for sustainable growth. We also support institutions in integrating Environmental, Social, and
Governance (ESG) criteria into their strategies, aligning with Sharia’a principles promoting ethical and responsible investing.

2. Design and Implementation:

We define the operational capabilities and functions required for your business and bring them to life, ensuring alignment with Sharia’a principles and regulatory requirements. Our approach embraces digital transformation, incorporating fintech innovations such as blockchain and AI to enhance operational efficiency, transparency, and customer experience.

3. Operate Steady State:

We measure performance and value delivered once your business is operational, ensuring optimal configuration and continuous improvement. Our services include Sharia stress-testing and risk management advisory to strengthen governance and compliance frameworks.

Our Islamic Financial Advisory Services encompass Deloitte’s full range of market-leading Corporate Finance capabilities, combined with deep Islamic Finance expertise. This enables us to deliver Corporate Finance services with a full appreciation of Sharia’a requirements.

We provide comprehensive lead advisory and transaction support services, covering buy-side, sell-side, and valuation activities. Our team identifies Sharia’a issues relating to transactions and manages them to successful resolution. From deal origination topost transaction integration, Sharia’a-related issues are proactively managed.

Our advisory experience includes structuring and executing Sukuk and syndicated finance transactions, ensuring full Sharia’a compliance and governance. We have supported international conventional banks and digital payment providers in developing Sharia’a compliant products and robust governance frameworks, including custody solutions and
securities lending.

Our Sukuk Advisory services involve the development and execution of Sukuk transactions to meet your funding objectives. We adopt a multi-faceted approach that incorporates both commercialand Sharia’a considerations into proposed structures.

We are at the forefront of innovation in the Sukuk market, supporting emerging structures such as green sukuk, social sukuk, and sustainability-linked sukuk, reflecting the industry’s commitment to addressing global challenges. Our team stays abreast of recent market developments and regulatory updates to ensure innovative and compliant Sukuk solutions.

We lead audits of some of the largest Islamic retail banks and Takaful groups in the Middle East. Our team conducts Shariah internal audits and Sharia stress testing and risk management advisory to strengthen governance and compliance frameworks.

We assist family offices and investors in accurately calculating Zakat obligations based on their investment portfolios and wealth. Our team conducts comprehensive reviews of investment portfolios to
ensure adherence to Sharia’a principles, screening out non compliant elements and ensuring purification of earnings.

We have extensive experience in facilitating Islamic finance trainings across the region for regulators, governing bodies, and key industry players. Our training covers practical Sharia’a governance, compliance, and product development issues, helping build capacity and awareness in the industry. We also support knowledge sharing and skills development initiatives through partnerships with academic institutions and industry bodies.

Islamic financial institutions benefit from inherent resilience due to Sharia’a principles that emphasise financing real assets and economic activities, avoiding excessive speculation and synthetic transactions. This foundation helps Islamic banks and instruments like Sukuk tobetter withstand market volatility compared to conventional counterparts.

We support clients with a full suite of Sharia’a-compliant liquidity management solutions, including money market transactions, central bank liquidity instruments, high-quality liquid assets, Islamic repos, and emerging Islamic derivatives for hedging. Our advisory
services help institutions manage risks effectively while complying with diverse Sharia’a interpretations across different markets.

We monitor and support clients through evolving regulatory frameworks aimed at harmonizing Sharia’a compliance standards and facilitating cross-border Islamic finance transactions. Our expertise helps institutions navigate complexities and build investor confidence in this maturing industry.

Through our Islamic Finance Knowledge Center (IFKC), we leverage a multidisciplinary model that integrates Islamic finance expertise with other sectors and disciplines. This approach enables us to deliver tailored solutions that drive growth, innovation, and sustainable prosperity across the Islamic finance ecosystem.