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Islamic finance enters its next chapter
Syed Moosa Kaleem Al Falahi on capital demand, ESG momentum, and how the GCC can shape the future of Shariah-compliant banking
- PUBLISHED: Fri 27 Feb 2026, 8:00 AM
Syed Moosa Kaleem Al Falahi has spent his career in senior leadership roles with prominent Islamic banks in the GCC, closely tracking the sector’s rise from a specialist offering to a core pillar of regional finance. Now Chief Business Development & Investment Officer at Siraj Finance, he has structured and led complex corporate, institutional, and sovereign Islamic capital market transactions across multiple jurisdictions.
In this conversation, he shares his perspective on how the industry has matured, where demand is strongest today, and how GCC institutions can sustain global leadership.
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With over 30 years in Islamic banking across the GCC, how have you seen the industry evolve, and what defining shift is shaping its next phase of growth?
With more than three decades of leadership in Islamic banking across the GCC, I have witnessed the industry evolve from a niche, compliance-focused segment into a sophisticated and systemically significant pillar of global finance. Initially, expansion focused on building Shariah-compliant products and strengthening balance sheets. Today, the sector is advancing towards a more value-driven model, integrating sustainability, digital innovation, and robust risk management.
Enhanced regulatory alignment, guided by organisations such as AAOIFI and the Islamic Financial Services Board, has elevated governance frameworks and deepened investor confidence. Along this journey, I have had the privilege of launching innovative Islamic solutions and managing cross-border transactions that contributed to this transformation. Looking ahead, I see the next phase of growth being driven by ESG integration, fintech collaboration, and greater cross-border standardisation, positioning Islamic banking as a resilient, principled, and globally competitive financial alternative.
Islamic finance must balance strict Sharia compliance with innovation and competitiveness. How do you approach product development and investment strategy within this framework?
Islamic finance can remain competitive only when innovation responds to genuine customer and market needs rather than replicating conventional products. In my experience, the process begins with identifying financing demand across key sectors such as SMEs, corporates, infrastructure, and sustainable development — core priorities within the UAE’s Islamic finance strategy.
Solutions are then structured within well-defined Shariah parameters, ensuring authenticity and transparency in line with the UAE Higher Shariah Authority, AAOIFI standards, and Shariah board guidelines. From an investment perspective, emphasis on diversification, ESG-aligned assets, and the development of sukuk markets reflects both regional and international investor expectations. This disciplined approach has shaped my efforts in introducing innovative solutions and leading cross-border transactions, while remaining firmly grounded in the ethical principles of Islamic finance.
You have structured complex corporate, institutional, and sovereign Islamic capital market transactions. Where is demand strongest today, and which sectors are driving growth?
Demand in Islamic capital markets is strongest today in three areas: sovereign issuance, bank capital, and infrastructure, particularly energy transition projects. Sovereigns in the GCC and Southeast Asia continue to anchor the market, issuing regularly to fund fiscal programmes and economic diversification, with strong oversubscription driven by Islamic bank liquidity.
Financial institutions are another key driver, especially Tier 1 and Tier 2 capital sukuk, as banks optimise balance sheets under Basel III and seek efficient Shariah-compliant funding. Finally, infrastructure and renewables are growing rapidly, with green and sustainability-linked sukuk expanding the investor base and aligning well with Islamic finance principles. Overall, the market is being driven by diversification agendas, regulatory capital needs, and ESG-linked financing, with the GCC at the centre of activity.
Drawing from your extensive experience across GCC and international Islamic banks, what are the key elements required to build resilience and trust in challenging markets?
From my experience, fostering resilience and trust in challenging markets depends on four essential pillars: strong governance, disciplined balance sheet management, prudent liquidity, and transparent communication. Strong governance, including credible Shariah oversight in Islamic banking, builds stakeholder confidence. Maintaining robust capital and a conservative risk approach provides the cushion to manage shocks without compromising strategic objectives. Prudent liquidity management and diversified funding are particularly important in the GCC, where market sentiment can shift quickly. Transparent communication with regulators, investors, and clients further reinforces trust in uncertain times. Organisations that embed these principles proactively are the ones that not only navigate stress effectively but also strengthen growth and deepen long-term client relationships.
As the GCC positions itself as an Islamic finance hub, what strategic opportunities do you believe regional institutions must prioritise to stay globally relevant?
As the GCC advances its ambition to become a premier global centre for Islamic finance, regional institutions should concentrate on innovating sophisticated Shariah-compliant offerings, particularly green and sustainability-linked sukuk, as well as structured financing solutions that address rising market demand.
At the same time, strengthening cross-border collaboration through strategic alliances across Asia, Africa, and Europe will expand market reach and enhance liquidity. Embedding ESG considerations into financing strategies is equally important, given the strong alignment between sustainability principles and Islamic finance, and its growing appeal to international investors.
Furthermore, leveraging technology to drive digital transformation and operational excellence can elevate efficiency, strengthen risk management, and enhance the client experience. By focusing on these strategic pillars, Islamic financial institutions in the GCC can cement their leadership and compete effectively on the global stage.
