Interfax presents Islamic Financial Index

Interfax Group announced the creation of a new product at the Russia - Islamic World: KazanForum - the Islamic Financial Index (IFI) for assessing financial risks in accordance with Sharia norms and Islamic ethics.

The index assesses the likelihood of an organization's financial insolvency based on more than 160 parameters, excluding the use of data on interest paid and received, as well as on non-Islamic interest-bearing loans. The IFI is also able to exclude organizations engaged in activities prohibited by Sharia, such as production or trade of alcohol and tobacco, from the assessment.

The index includes non-financial indicators such as judicial decisions and personnel data, which is in line with the ethical principles of Islamic finance, which emphasize responsible business conduct and social responsibility.

IFI is an ensemble of ML and AI models created based on SPARK-Interfax data and verified by participants in the Russian market. Artificial intelligence (AI) was used to create the index model.

"Now we are seeing a great need and the high potential for the development of financial technologies for Islamic banking, which will grow worldwide, significantly outpacing the traditional financial sector in growth. And the use of modern financial technologies, such as AI, in Islamic banking will contribute to its accessibility and popularity," Andrei Oberemok, director of the information technology department at Interfax Group, said at the Forum.

The IFI can be adapted for other states and associations such as the SCO, EAEU, BRICS, and OIC, and target indices and scoring for Islamic banking products can be created based on its model, he said.

"Interfax is open to cooperation in this direction with Fintech companies and companies creating Islamic banking products," Oberemok said.

Interfax, Russia's leading Big Data company, has been creating IT products used by most Russian and many foreign companies for over 20 years. One of the most famous Interfax products is the SPARK-Interfax system, a leader and the generally recognized industry standard in the Russian market for risk assessment and business security services. Over the past few years, SPARK has been leading its competitors by a wide margin in the business information and analytical systems space, according to the RAEX ratings agency.