Robo-advisor for Islamic finance to be tested in Southeast Asia

New automated platform targeting high net worth Muslim households to launch next month

Robo-advisor for Islamic finance to be tested in Southeast Asia

Insurance News

By Gabriel Olano

Malaysian financial planning firm Farringdon Group will launch “Algebra”, its Shariah-compliant robo-advisor, next month, after its plan to launch it last year was delayed.

Robo-advisors are programs that provide automated financial advice based on algorithms, without need for a human financial advisor.

“Algebra, [which] can take minimum investments worth US$4,000, is being hailed as a product which does not only cater to the wealthy Muslim population in the region, but also targets the entire Islamic finance market,” Farringdon Group CEO Stuart Yeoman told Deal Street Asia.

Farringdon has already partnered with several local banks, a major insurance company, and a fintech firm to apply the technology, which Stuart claims is the first financial platform in Asia that is compliant with Islamic principles.

“We will focus on [Southeast] Asia for the time being. You need to look where the Muslim population is for the Shariah version,” Stuart added. “Obviously we are going to look at the Middle East eventually. But we are piloting it in Asia first and will see how it goes.”

Demand for Shariah-compliant investments has risen in recent years, with providers targeting high net worth families and individuals that wish to allocate capital towards Islamic asset management activities.

The Malaysia Islamic Financial Centre’s data showed that the global Islamic finance assets under management is at US$58 billion, and is expected to grow to US$77 billion by 2019.

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