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Fair Neobank: Halal Banking and Fintech Are Strong Forces for Good

Digital banking has developed to the point where communities no longer need to suffer generalisation. For a long time, the Islamic community has had to adhere to banks profiting off of loans – which contradicts with Islamic belief that money itself has no intrinsic value, therefore charging money to lend money is unethical. Now, digital banks are starting to spread across the world to make every community feel more comfortable banking. 

Toni Harrison is the Chief Marketing Officer of Fair Neobank. An award-winning communications specialist, Harrison previously served as managing partner and president of Ten35, a multicultural branding agency. During her time there, Harrison led part of Pepsi’s $400million commitment to uplift Black communities. Harrison also devised and executed strategies for Polaris Inc.’s entry into the multicultural space. She discusses what the three main benefits of halal banking are:

Toni Harrison, Chief Marketing Officer of Fair Neobank
Toni Harrison, Chief Marketing Officer of Fair Neobank

We live in a time of great change, especially in the financial, banking and technology fields. But when you work in fintech, as I do, you are experiencing and managing all of these changes at once. This growth and change is further intensified by not only a shift in technology but also the rapid growth of halal-centered banking.

Throughout history, we have watched many banks limit our financial freedom by charging excessive fees and interest, and we’ve accepted it because there haven’t been better, accessible options. But halal banking offers many benefits that traditional “Western” banking does not, including a solution to some of the inequities in traditional banking, and the benefits are clear and numerous.

3 Benefits of Halal Banking

  1. Save thousands by avoiding interest-based loans

The key difference between halal banking and conventional banking is that halal banking is rooted in shared equity and restricts charging or profiting from interest.

Money itself has no intrinsic value, so charging money to lend money is viewed as unethical in halal practices. That means those looking to buy homes or cars could save thousands each year by avoiding interest payments on their loans.

  1. Invest ethically

Halal banking puts ethics first. At a halal-certified institution, the bank will not invest in harmful industries such as tobacco. This is also where socially responsible investing (SRI) and environmental, social, and corporate governance (ESG) investments come into play. Under halal practices, your money will not be put towards institutions that cause environmental harm or profit from weak labour standards. This also means investments are not as risky since you’re putting money towards less volatile industries.

  1. Deposits aren’t leveraged without your permission

Since halal prohibits profiting off interest, your deposits will not be leveraged to earn interest for your bank. Your money is there when you need it. Some halal institutions will offer high-yield dividend accounts where you can park your money. By owning a dividend account, money is invested and you earn a share in the profits, instead of earning interest. For example, halal neobank Fair offers its members up to 2% in dividends.

Halal banking can help all consumers keep more money in their pockets and take control of their finances. It can offer them expanded wealth building opportunities and chip away at the wealth gap that continues to limit financial advancement.

Currently, Fair is the only halal-certified neobank in the US. There are other halal options, and we will continue to see the demand for these services to grow.

We know fintech has the power to help solve inequities and overcome barriers, and we are excited to be putting Halal compliant banking to work in this great cause.

Author

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