Core banking provider Tuum is launching foundational Islamic banking and finance solutions, focusing on the key principles of Islamic banking, laying the groundwork for a full end-to-end platform designed to support the needs of Islamic financial institutions.
With the launch, Tuum is creating the infrastructure required for Islamic deposits and asset-based lending, two critical components of a broader Islamic banking system. This Minimum Viable Product (MVP) ensures that financial institutions can offer products that fully comply with Sharia law while preparing for further expansion into a complete Islamic banking suite.
At the heart of Tuum’s launch is the development of a profit-sharing system for Islamic deposits, based on the concept of Mudarabah (profit-sharing). This system allows returns to be generated through legitimate economic activities, with profits shared between banks and depositors according to pre-agreed ratios, rather than through interest-based income.
“This is an exciting milestone for Tuum as we take our first steps into the world of Islamic banking,” explained Miljan Stamenkovic, VP of EMEA at Tuum. “By focusing on the foundational elements of Sharia-compliant financial services, we are empowering financial institutions to meet the growing global demand for inclusive and ethical banking products. Our platform’s flexibility and scalability will enable banks to innovate while ensuring that their offerings align with Islamic principles.”
The new deposit solution ensures that all profit calculations adhere to Islamic principles, avoiding interest and focusing on ethical profit generation. It also promotes trust through a predefined profit-sharing agreement, ensuring clarity for both institutions and clients.
Asset-based lending
Tuum is also developing the framework for an Islamic asset-based lending solution, aligning with the prohibition of interest and tying all lending to real, tangible assets.
The key elements of this system include:
- Profit and Risk Sharing: Creating structures that share both risks and profits, in line with Islamic ethical finance principles.
- Scalable Growth: Providing a foundation for future Islamic finance models, to create a comprehensive Sharia-compliant financing ecosystem.
While the initial focus is on deposits and asset-based lending, Tuum explained it remains committed to evolving its platform to support the full spectrum of Islamic finance. This initiative aligns with the rising global demand for Sharia-compliant banking and will empower financial institutions to offer inclusive, ethical banking products.
