There’s a certain quantum of faith involved when entrusting your money to a financial institution. Faith that your money will be looked after, that it will be made to work for you, that its caretakers have your best interests at heart.
It’s a big ask for anyone. For Muslims, finding a bank aligned with their values is even harder.
“The consumer is becoming more and more aware of what’s out there,” says Muzzammil Dhedhy, Co-Founder and COO of Hejaz Financial Services, a Sharia-compliant financial group established to provide Muslims with a wealth management service in accordance with their faith.
“They’re better educated. When Muslims first arrived in Australia as migrants, English was not their first language. They knew nothing about the financial services system. Whatever they were offered, they took because they were none the wiser.”
Hejaz is the brainchild of CEO Hakan Ozyon and Dhedhy, who had long dreamed of a financial institution specifically geared toward the Muslim community. Originally from the northern suburbs of Melbourne, Ozyon found himself unable to build his wealth via banks that did not conform to his Islamic faith.
“I couldn’t get a loan, I couldn’t get a credit card,” Ozyon says. “I either had to compromise my faith to move forward, and even then I’d be at the same level as everyone else, or I’d fall behind the pack.”
– Muzzammil Dhedhy
Neither option was acceptable. Instead, Ozyon and Dhedhy began building a solution to the dilemma.
“Basically, we were building this business concept in the garage for seven years,” Ozyon says.
“We were on a shoestring budget, but people started to believe in what we were doing, which was wealth management in a unique way.”
As their dream reached its target demographic, Hejaz Financial Services began to grow. By 2019, the business had moved into a city office.
“Perception is everything,” Ozyon says. “If people think you’re going big, they’ll believe in you and start talking about what you’re doing. That’s when the business took off, big time.”
Today, Hejaz is Australia’s leading Islamic financial group, recognized by the industry and celebrated by the community. By following through on the promise of a better way of banking for Muslims, Hejaz and the community both have reaped the rewards.
“We had to make a change,” Ozyon says. “Now, we’re the only financial institution on the planet that covers everything from form banking to asset management to investment pricing. We have lending products. We’re on the ASX. And now we’re going into the fintech space.”
The world has changed dramatically since Ozyon and Dhedhy first envisioned Hejaz in 2007. What suited clients back then, or even five years ago, is unlikely to satisfy the needs of today.
“Hejaz wants to be at the forefront of that change,” Dhedhy says. “We intend to be the world’s number one Islamic fintech. That’s why we’ve developed the Hejaz app based entirely on customer requirements.”
Halal Money, an Islamic fintech app, offers a versatile, secure and user-friendly solution for transactions and investments. This comprehensive tool encompasses the organization’s entire gamut of offerings, all while ensuring adherence to Islamic financial principles.
– Muzzammil Dhedhy
“The intention is to change user behavior over time,” he says. “We’re expecting users to move from banking and financial institutions they’ve become accustomed to throughout their lives to our product, so we needed to ensure we were able to cater to various levels of technology and financial understanding.”
To create Halal Money, the Hejaz team undertook an exhaustive series of workshops with clients and prospective users and carefully examined the market to identify gaps they could fill.
“We wanted to develop a product that was not only tailored to our market in Australia, but would be scalable overseas as well,” Dhedhy says.
“That was essential to the entire strategy, to ensure that the foundational layer of tech had a strong use case in Australia and met the regulations and requirements here, but would serve us well when we branch out into other countries.”
Halal Money is set to launch in the first quarter of the 2024 financial year, and will act as a precursor to Hejaz’s overseas expansion. At the moment, the firm is laser-focused on the first stop on its world tour: the United Kingdom.
“Our research tells us the United Kingdom is the largest financial hub in the Western world,” Ozyon says. “We’ve solidified our position in Australia, so the next step for us is obviously the United Kingdom.”
The 2021 census shows that in England and Wales, Muslims made up 6.5 percent of the population, up from 4.9 percent a decade earlier. That’s 3.9 million potential customers for Hejaz, and the team is well aware that options for Muslims are limited.
“The providers in the UK market are quite fragmented,” Ozyon says. “There’s no dominant player, no holistic offering like ours. So we feel like there’s a space waiting for us in that market, and because we understand the market so well, we’ll be able to penetrate quite rapidly.”
– Hakan Ozyon
As in Australia, Halal Money will showcase the company’s capabilities, he adds.
“If we were doing things in a traditional brick and mortar way, it’d be quite difficult. The app as a distribution channel is a game-changer for us. We see it as one of the best and most robust apps of its kind in the world. So the one-two combo of our product and the app should allow us to take that UK market.”
Further helping the cause are the similarities between the Australian and British regulatory environments. “Our licensing and track record here carry significant credibility in the United Kingdom,” Dhedhy says.
“Sometimes if you enter a new jurisdiction, they don’t recognize anything you’ve achieved, but in this case it really will expedite the process for us to join the UK market.”
Another reason Hejaz has chosen the United Kingdom as its international debut is that traditionally, it has been a gateway to the Middle East. “Obviously given the majority Muslim populace, Middle Eastern money is the kind we hope to attract through our offerings,” Ozyon says.
“But there, whether you’re in Saudi Arabia or Dubai, fintech products are everywhere. You’re up against a million other products. In the Western countries, it’s not that way.”
What sets Hejaz apart from Middle East-based players is that the team is from Australia, a marked advantage in the United Kingdom.
“Middle Eastern people don’t really understand the market, frankly,” Ozyon says. “Their offerings reflect that. They’re just trying to impose what they think is needed rather than trying to understand what’s going on. We have an edge in that regard because we’re all born here in Australia, very similar to the United Kingdom.”
Ozyon and Dhedhy believe that success in the United Kingdom will start a chain reaction around the world. “If you can make a name for yourself in a financial ecosystem that big, particularly as far as the Islamic world is concerned, you’ve made a global name. For us, the rest will come quickly,” Ozyon says.
“And once success comes in the United Kingdom, it’s very easy to move into North America and the rest of the world.”
And those plans are already in place, particularly with Hejaz’s profile on the rise globally.
– Hakan Ozyon
“We’ve gotten a lot of attention in Muslim countries where there’s a distinct lack of a holistic offering such as ours, that combines banking and asset management. There aren’t many of those out there,” Dhedhy says.
“And the way we’re developing Halal Money, it’s a very open-ended tech stack. It can be transplanted from Australia to the United Kingdom and then to other European jurisdictions quite easily.”
Ozyon says this was the plan for the app from the beginning. “I wanted to build an app that could be easily added onto and taken anywhere in the world,” he says. “I intend to add anything and everything to the app. Essentially, we want a whole economy in that app, a complete ecosystem.”
To say that Hejaz has fulfilled its original purpose is something of an understatement. Ozyon, Dhedhy and their team have over-delivered on their promises and show no signs of slowing down.
In November, Hejaz Group debuted its Sukuk Active ETF, or managed fund, in response to what the team identified as another gap in the Australian market. The product stands apart from its peers for being entirely Sharia compliant, which is of particular consequence as under Sharia law, it is forbidden to accrue or pay interest.
As an “ultra-ethical fixed-income product”, Hejaz Sukuk Active ETF counters this by generating so-called “halal money”, or wealth accrued in strict accordance with Islamic principles. According to Hejaz, it’s also an Australian first.
– Hakan Ozyon
“The ability we have to do all of this is critical, because no one else has done it,” Dhedhy says.
“We’ve seen what technologies are available around the world. They don’t have the functionality we have and they don’t represent a full value chain. Ours is Islamic and transparent through and through, and transparency is an essential element in the delivery of an Islamic product.”
Ozyon says he’s often asked how a Melbourne startup is able to compete with the seasoned, mature players in the UK market.
“The answer is we’ve created a value chain from top to bottom that’s fully integrated, fully systematic and the user journeys are seamless. It will deliver outcomes that investors can only dream of, and that’s the difference. That’s how we’re able to disrupt the industry.”
Hejaz is used to disruption. In September, it added another first to its heaving mantle of pioneering efforts when it became the first Islamic mortgage provider listed on Australia’s AFG mortgage aggregator.
The Halal Money app will soon join it. Functionality is being added that will place securities trading and investments right next to standard banking. “We have what we call robo-advice,” Dhedhy says.
“Effectively it provides guidance to those who don’t know what they want to invest in. Within our clientele there are those very well-versed in investments, but there are many novices. They have never invested before. They have no idea what it’s all about. So we’ve used AI to assist them.”
Users answer a series of questions, which the AI then parses to tailor a portfolio of investments specific to them. “Then, with the touch of a button, they can make investments seamlessly.”
Dhedhy says the company’s collation and segmentation of this data is unique in its execution. “Nobody else has been able to map a client’s financial journey this way.”
The powerful Halal Money app has been developed as a statement of intent, even down to the name. “We want to be able to go deeper and go wider for our customers, and that’s what the app allows us to do,” Dhedhy says.
“It’s future proofing. At the end of the day, if you have the right foundation, there’s so much you can do.”
– Muzzammil Dhedhy
Ozyon believes the product they’ve developed is destined to disrupt the finance world. “It’s not just the Muslim community. Everyone’s going to see this and try to replicate it,” he says.
The term ‘halal money’ is one of the most Googled in the Muslim world. Ozyon says it racks up close to five million searches per month.
“In terms of marketability and SEO, Halal Money is a powerful name. We had to buy the domain from someone who already owned it, but it was worth it. It resonates with people. They read the name and they know exactly what it is. It takes ethical to the next level.”
From an idea born in a Broadmeadows garage to a pioneering all-in-one app set to dominate Islamic finance and beyond, Hejaz has exceeded expectations around the world.
“I knew we were creating history,” Ozyon says. “I know it sounds arrogant, but I knew what we had on our hands. I adamantly believed in it when nobody else did, and we made it reality.”
Visionaries are so named because they have a unique insight into something few can see. Ozyon says this was the case in the early days of Hejaz. “Most disruptors and entrepreneurs will tell you the same thing. If it hasn’t been done, most people can’t comprehend it. But all you need to do is get a couple of people to follow you, and there you go. That’s your start. Even if they don’t totally believe in it, they’re on the journey with you and that’s enough.”
When Dhedhy became part of the journey, it was because he had total faith in the concept. “I believed there was potential in the market. It was so underserviced and the caliber of offering to the Islamic finance market in Australia was poor to say the least. Somebody, somehow, had to come in and provide an institutional grade solution to this market. I knew we could do it, but did I expect that we would get here so quickly? Probably not.”
Ozyon laughs and says, “And I thought we’d be here quicker! In fact a few people have told me we should slow down. Even now as we embark on this mission of global domination, there are still doubters.
“But they’re my fuel. It just drives me even more. We’re not going to stop until we’re number one in the world, and even then, we won’t stop.”