A Better Way

Hakan Ozyon and Muzzammil Dhedhy set out to create a financial institution purpose-built to meet the needs and beliefs of the Islamic community. At the same time, the pair had to provide the kind of modern offerings befitting a transactional financial services firm ready to go toe-to-toe with the big end of town.

They did so in 2014 by creating Hejaz Financial Services, a Sharia-compliant financial group that caters specifically to the Islamic community. A first of its kind in its native Australia, word spread quickly through Hejaz’s target audience. The resulting success established Hakan and Muzzammil as disrupters in the industry.

The shoe fits, as Hakan and Muzzammil are fully aware, and consequently, the disruptions have continued: In 2019 Hejaz moved from its tiny original location into central Melbourne, where it was able to rub shoulders with the establishment. In 2022, Hejaz made history by taking Islamic exchange-traded funds to the ASX – a world first.

“We’re the only financial institution on the planet that covers everything from transactions and spending to asset management to investment pricing,” Hakan told The CEO Magazine in 2023. “We have lending products. We’re on the ASX. And now we’re going into the fintech space.”

All previous Hejaz achievements were a prelude to Hakan’s greatest goal yet: establishing Hejaz as a major fintech player. “If we want to go global for distribution, and we do, that’s what we have to do.”

A Way In

As their track record to date clearly establishes, the Hejaz team does nothing by halves. Their vision was to provide Hejaz customers with an all-in-one app that truly does what it says on the box. The result is Halal Money, the realization of Hakan and Muzzammil’s dream of being able to hold a holistic financial services solution in the palm of one’s hand.

The fintech world is a fast-moving one. Customer requirements change monthly, at times even daily. Creating an app to weather that level of change means placing agility and versatility at the forefront of development, something the Hejaz team prioritized.

“It’s revolutionary in its construct, design and the functionality it provides,” says Muzzammil, Hejaz’s Chief Product and Compliance Officer. “It fills a gap in the market that nobody else is able to service at the moment. Some apps can data-mine, some focus on AI, but in terms of core capabilities, we’ve found that they’re still wanting in a holistic sense. That was the impetus for Halal Money.”

In the Islamic financial world in particular, nothing fits the bill. With so many Sharia-related considerations, creating such an app has proved too much work (or not lucrative enough) for the market – until now.

“Our core technology stack is scalable in so many respects,” Muzzammil says. “You can plant this in any location around the world and it’s functional, but it’s also able to offer sheer power.”

At launch, Halal Money will offer bread-and-butter transactional services such as paying bills, transferring to friends and family and point-of-sale transactions using Apple Pay and Google Pay.

“These all generate detailed analytics and data in terms of user behavior and budgeting,” Muzzammil says. “You can gain a clear line of sight into where your money comes from and where it’s going.”

Particularly within Hejaz’s target audience, Muzzammil says there’s a growing concern about managing overall cashflow.

“People are struggling to keep their head above water,” he says. “Everybody has so many auto payments on direct debit and the like. We’re really trying to deconstruct and demystify that and simplify it for them.”

Effectively, a Hejaz customer could use the Halal Money app for all their daily transactional and spending needs from day one, but Muzzammil says they wanted the app to go further – and it does.

Invest with Confidence

One of the more delicate areas of finance for the Islamic community is investment. Under Sharia law, it is prohibited to borrow on or earn interest. Hejaz has considered this, and in the interest of wealth creation that initially drove Hakan to establish the business, has developed a method of investment stockbroking that is completely Sharia-compliant.

“We offer a suite of Sharia-compliant and ethical investment funds, many of which are listed on the ASX and soon to be listed on global exchanges as well,” Muzzammil says.

The Halal Money app has a function that enables the user to make exchange-traded fund (ETF) investments. At the moment, this must be done through a separate share trading app, sometimes from a completely different vendor to one’s financial institution.

“Effectively, those clients have to leave our ecosystem even though they’re seeking to invest in our products,” he says. “Now, they can transact that ETF entirely within the Halal Money app.”

Care has been taken to ensure even beginner investors are able to make use of Halal Money in this way. “There are two user groups, we’ve found,” Muzzammil says. “There are those who are very clear about their investment objectives, and they can very easily navigate our suite of ETFs. They know specifically which ETFs they wish to buy.”

And then there are those who are new to investing.

“They simply don’t know which ETFs to invest in,” Muzzammil says. “So we’ve built an investment guidance tool into the app that can guide the process along.”

A questionnaire helps determine a client’s preferences, from investment objectives to the investment horizon, how long or how much they want to invest and even if they have a particular bias towards equities or property or capital protected or low volatility.

“Whatever the case may be, they can easily establish their investment needs, and the system itself can aggregate their data and outline what type of investor they are.”

Going deeper, Halal Money can then split the customer’s overall investment among a range of ETFs that suit their needs, as well as provide details on performance history and what the ETFs actually comprise.

“Customers can make informed decisions entirely through the app,” Muzzammil says. “Everything has been simplified with the view of making things as investor-friendly as possible. We want their investment journey to be self-driven and self-orientated.”

All in One

Traditionally, financial services customers have access to term deposits. Unfortunately, as an interest-bearing investment, this is not an option for Muslims.

“We’ve created a Sharia-compliant equivalent,” Muzzammil explains.

Called a term investment, it effectively allows users to enter into an investment for a fixed term. “We find a lot of investors these days are looking for investments that provide passive income streams,” he says. “That’s become a big thing particularly since the COVID-19 pandemic, when people felt that employment-based income wasn’t always guaranteed.”

Hejaz’s term investments are able to provide monthly income-based returns, and once again, it’s all possible through the Halal Money app.

“Effectively, this one app can do it all,” Muzzammil says. “And we have a lot of exciting things in the pipeline as far as future development goes.”

Selling the Dream

Bringing such a grand design to life was a tall order for the Hejaz development team; selling it to customers has been another matter entirely.

“Just like almost everything Hejaz has developed, it was driven by user demand,” says Ali Ozyon, General Manager of Hejaz Media, the company’s marketing arm. “We carried out many market studies and surveys to understand the pain points of our target audience in Australia in particular.”

The results showed that people wanted a one-stop shop that could handle whatever daily financial duties they could throw at it.

“We started to map out user journeys and worked hard to demystify traditionally jargon-heavy financial services,” Ali says. “Traditionally, everyday moms and dads have been locked out of the investment market in particular. It’s only been available to people who might have more to invest, and we wanted to change that.”

A major part of bringing about that change is in the name of the app. By branding it Halal Money, it’s an upfront declaration of intent.

“Halal is a permissible way of doing things in Islamic life; haram is the opposite,” Ali says. “Right in the name, Halal Money lets clients know that the services the app provides will be ethical and fit comfortably with their beliefs.”

Distant Shores

The creation of Halal Money is a crucial step in the plan to take Hejaz beyond Australia’s borders. It was always the intention of Hakan, Muzzammil and Ali to go global, and Muzzammil says Halal Money is the perfect way to expose Hejaz’s offerings to overseas markets.

“We want to maintain this market position we’ve created: being a holistic, ethical and Islamic financial services solution,” he says. “To take that overseas, we’re working to have our ETFs listed on global exchanges and then, through the Halal Money app, enable users to have their transactional accounts available around the world.”

Internal research showed that investors prefer their own domestic currency, so this too has been a consideration during the development of Halal Money.

“They don’t like to have exposure to investments in overseas currencies. It seems to be a theme with investors,” Muzzammil says. “If they can invest in pounds sterling and get their returns in pounds sterling, that’s one less step they need to worry about. It also gives them much more transparency; if it’s listed on a domestic exchange, they have an easier time tracking their investments.”

To achieve this, Hejaz has worked closely with British regulators in particular; the United Kingdom is the first intended stop of Hejaz’s breakout world tour.

“From the start it was imperative that we build a tech stack that was a passport into other countries, and so far it’s been really well received,” Muzzammil says. “So we’re very excited to take this to market in 2024, particularly in the United Kingdom.”

With plans afoot to enter the Asian, Middle Eastern and American markets, Halal Money was created with that kind of portability in mind.

“We want it to be easily migrated not just in terms of linguistics, but also in terms of the products and how they behave,” Muzzammil adds. “We’ve already begun a market study in those locations, and it’s validated our hypothesis that there really wasn’t any app like Halal Money available around the world. Nothing like this exists so far. It’s very exciting.”

Building a Better App

Much care has been taken to not only make Halal Money the financial app the Islamic world deserves, but one that’s very much a reflection of what Hejaz embodies.

“A knee-jerk reaction in the financial world to a situation where there’s this kind of gap in the market would be, frankly, to develop something white label, whack a logo on it and off it goes,” Ali says. “If we wanted to truly be a market leader and control our own destiny, we had to develop and deliver a purely Hejaz product.”

To do so, Muzzammil and Hakan kept a close eye on the development process to ensure that the technology was adaptable and truly representative of the Hejaz spirit.

“These are our products through and through,” Muzzammil says. “When people see a Hejaz product, they expect that we own it end to end. Otherwise you have a platform that’s effectively an intermediary, a middleman facilitating a transaction between the client and the end-product provider. That’s not what we want to be.”

Instead, Hejaz has infused its offerings and expertise into every level of the Halal Money app.

“The core architecture has been developed to cater for that,” Muzzammil says.

“Even from day one, what the app delivers is a fully integrated end-to-end solution. A user can go into the Halal Money app and invest in an ETF that’s also managed by Hejaz. In terms of transparency, of governance oversight, we can say to clients that when they’re coming into Halal Money to make an Islamic investment – an ethical investment – it’s not only possible, but managed by us all the way.

“We screen the investments at the underlying portfolio level. We place you into companies that meet your Islamic and ethical requirements. That’s something that we do, and we do not find that anywhere else globally.”

A Competitive Moat

The release of the Halal Money app will mark a dramatic shift in Hejaz’s standing within the global financial services community.

“We feel that by having this holistic, ethical offering, it really creates a competitive moat around us,” Muzzammil says.

“If someone’s going to try to replicate what we’re doing, they’ll have to literally build every single element from the ground up. Its product, its distribution, its technology, its brand. The whole lot.”

Furthermore, the app represents a significant value-add for Hejaz as a business. “As we’ve traveled overseas and discovered what’s available in other markets, we’ve noticed what we see as the rise of empty fintech. They build the shell of technology without figuring out how to monetize it. Their entire strategy is to develop technology and let users find their own value in it. That’s not a sustainable business model.”

With Halal Money, Hejaz has taken a riskier approach, but one that Muzzammil believes will dramatically change the company’s fortunes.

“We’ve developed the underlying products first. The products are revenue generators. The technology facilitates the user journey into those products. We’ve learned that that’s a unique business model in this industry, a unique strategy in the market. And we are absolutely fearless in that respect.”