Project Overview
A UK FCA-authorised Islamic bank with £840M Sharia-compliant deposits and 42,000 customers needed to modernise...
Technology Stack
Compliance & Standards
The Challenge
A UK FCA-authorised Islamic bank with £840M Sharia-compliant deposits and 42,000 customers needed to modernise their legacy digital platform — enabling Murabaha home financing (Sharia-compliant mortgage alternative), Wakala savings, current accounts, and international Islamic finance products. FCA authorisation (as a UK bank), PRA prudential requirements, Sharia Supervisory Board (SSB) oversight requirements, FCA Consumer Duty, UK GDPR, AML MLRs 2017, and WCAG 2.1 AA were mandatory. The platform must never facilitate interest-bearing transactions (riba prohibition). Budget: £160,000.
Our Approach
Eliminating Riba
Riba (interest) prohibition is the primary Sharia compliance requirement.
Architecture
- 1no loan products — only Murabaha (cost-plus sale), Musharaka (partnership), Ijara (leasing), Wakala (agency).
- 2Profit rate (not interest rate) — all return calculations labelled "profit" not "interest",
- 3profit calculation methodology: Murabaha — bank purchases asset at cost price, sells to customer at cost + agreed profit (fixed at outset — no compound profit).
- 4Zakat calculation (Islamic charitable donation — 2.5% of eligible wealth above Nisab threshold) offered as optional automated calculation for customers.
Sharia Supervisory Board review
SSB reviews every new product and significant platform change — digital record of SSB approvals maintained.
Murabaha Home Finance Journey
Murabaha is the UK Islamic bank's Sharia-compliant alternative to a conventional mortgage.
Journey
- 1customer applies for home finance,
- 2bank purchases the property (legal title transfers to bank at purchase),
- 3bank immediately sells property to customer at purchase price + profit (total price agreed at outset — never changes),
- 4customer pays in agreed monthly instalments (deferred payment sale — installments calculated as total price ÷ months).
HMLR integration
Murabaha requires two title transfers — bank buys, bank sells to customer.
HMLR Land Register
- both transactions registered.
- SDLT (Stamp Duty Land Tax) relief: SDLT Double Charge Relief Act — relief from double SDLT on Islamic finance structures.
Wakala savings
bank acts as investment agent (wakeel) for customer — customer authorises bank to invest on their behalf in Sharia-compliant assets.
Expected profit rate
declared monthly (not guaranteed — Sharia prohibits guaranteed returns).
Actual profit distribution
monthly allocation of investment return to customer account.
Wakala portal
customer dashboard showing expected profit rate, current balance, maturity date (for fixed-term Wakala), and profit received to date.
FSCS protection
Islamic bank deposits are FSCS-protected (Financial Services Compensation Scheme — £85,000 per depositor) — prominently displayed on Wakala savings pages.
FCA Consumer Duty and Islamic Finance
FCA Consumer Duty (PS22/9): Islamic finance products must provide fair value to Muslim customers who have no alternative to Sharia-compliant products.
Value assessment
- 1Murabaha home finance cost comparison vs equivalent conventional mortgage (transparent profit rate vs interest rate equivalence),
- 2Wakala savings expected profit rate vs equivalent conventional savings rate,
- 3no exploitation of religious obligation — FCA Consumer Duty specifically requires no targeting of vulnerable characteristics (religious obligation is a consumer vulnerability).
Sharia compliance page
plain English explanation of how each product is Sharia-compliant (for customers who want to verify SSB approval).
The Results
FCA and PRA compliance confirmed.
Sharia Supervisory Board approval.
Platform live at 22 weeks, £148,000 — under budget. 42,000 customers migrated zero downtime.
Murabaha home finance digital applications: 84% of applications now fully digital (previously 100% in-branch).
Wakala account openings: 3,400 new accounts in first 6 months.
FSCS information display: 100% (FCA Consumer Duty).
SDLT Double Charge Relief automation: 100% (previously manual legal claim).
FCA Consumer Duty review: confirmed compliant.
Customer NPS: 78.
“42,000 customers migrated zero downtime. Murabaha digital applications 84%. Wakala 3,400 new accounts in 6 months. SDLT Double Charge Relief automated. FCA Consumer Duty confirmed. SSB approved. NPS 78. The SDLT Double Charge Relief integration was the most important regulatory automation — every Murabaha transaction previously required a manual HMRC relief claim. ClickMasters understood Islamic finance structures at a level that no other UK software supplier has demonstrated." — CEO, UK Islamic Bank (name withheld)”
Project Details
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