Interview: Khaled Yousef Al Shamlan, Group CEO, Kuwait Finance House, on fostering innovation and public-private collaboration
What strategic measures should Kuwaiti Islamic financial institutions take to further solidify their position amid rising regional and global competition?
KHALED YOUSEF AL SHAMLAN: Kuwaiti Islamic financial institutions should pursue a multi-faceted strategy, exploring both organic and inorganic growth opportunities – whether by expanding existing institutions or converting conventional banks – thereby building globally competitive and resilient entities. At the same time, they must proactively adapt to evolving regulations while fostering innovation within sharia boundaries. Robust governance and sound management aligned with international standards are essential, with the Central Bank of Kuwait (CBK) playing a critical role in ensuring a secure and well-regulated environment.
Expanding collaboration with GCC markets and global Islamic finance centres is equally important for extending market reach and deepening awareness of sharia-compliant models. Educational and incentive-based initiatives can further promote adoption. There is also potential to advance ethical and sustainable investment, particularly in green finance. Finally, embracing digital transformation is vital for boosting operational efficiency, improving customer experience and maintaining competitiveness in a digital-first landscape.
Which alternative mechanisms or innovations could be leveraged to expand sustainable Islamic finance in Kuwait while regulatory frameworks evolve?
AL SHAMLAN: Investing in technology – especially in artificial intelligence, cybersecurity, start-ups and digital infrastructure – can strengthen the operational capacity and resilience of Islamic financial institutions. Green sukuk (Islamic bonds) also present a promising option, aligning sharia principles with global sustainability goals and financing environmentally responsible projects. Additionally, public-private partnerships can help mobilise Islamic finance for large-scale development initiatives. As Islamic banking emphasises real economic activity, such partnerships naturally support its objectives and can accelerate the shift towards a more sustainable and inclusive financial ecosystem.
Where do you identify the key challenges that Islamic banks face in adopting financial technology (fintech) while ensuring sharia compliance, and how can these be addressed?
AL SHAMLAN: The Islamic financial sector is undergoing significant transformation driven by technological advancement, yet challenges remain. A key issue is the shortage of professionals with expertise in both Islamic finance and fintech, as the sector’s rapid growth has outpaced talent. Bridging this gap requires greater investment in specialised education and training.
Meanwhile, the regulatory environment for Islamic fintech is still evolving. Entities such as the Accounting and Auditing Organisation for Islamic Financial Institutions, the General Council for Islamic Banks and Financial Institutions must take a more proactive role in developing flexible, innovation-friendly frameworks that support fintech deployment without compromising sharia principles – ensuring the sector’s continued growth, compliance and stability.
How can Kuwaiti regulators and Islamic financial institutions collaborate to ensure regulatory alignment that fosters industry stability and innovation?
AL SHAMLAN: Compliance with sharia frameworks underpins policy development in areas like fintech, cybersecurity and sustainable finance. Islamic banks coordinate closely with the CBK through initiatives such as regulatory sandboxes, which allow fintech solutions to be tested in controlled settings. This enables regulators to monitor innovation while ensuring compliance. Increasingly, regulatory bodies are integrating sharia scholars and advisory boards to standardise practices and address the evolving needs of the sector, contributing to a more resilient and forward-looking ecosystem.
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