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A brief look at Islamic fintech Kestrl

It packages together various financial services that some Muslims might find worthwhile, though I don't.

Posted 23 February 2024

London is a hotbed of financial technology ("fintech") activity as part of a vibrant technology sector. Since Greater London has over 1.3 million Muslims according to the 2021 census, it is no surprise that Islamic fintech is well represented.

In May 2022 in my page "Low interest rates can lead to unsophisticated investors taking on excessive risk" I wrote about Yielders.

I used my October 2023 column in the magazine "Islamic Finance News" to write about another Islamic fintech, Kestrl. You can read it below.

A brief look at Kestrl

One of the few bright spots in the UK economy is that London is a hotbed of financial services technology (“Fintech”) innovation, both conventional and Islamic.

I had never heard of Kestrl (website until July when I found myself sitting opposite the CEO Areeb Siddiqui at an Islamic finance dinner. To write this article, I installed the Kestrl app on my iPhone and signed up for the free service.

One of the main service offerings is the ability to look across multiple bank accounts in one convenient place. A few years ago, UK regulators (and possibly EU regulators since this may pre-date Brexit) forced banks to give access to their transaction data upon customer request. Personally, I have never felt the need for such a service, but obviously many do as otherwise the service providers could not stay in business.

Kestrl also offers Zakat calculation, although again I would just use a spreadsheet if I wanted to calculate Zakat.

If you subscribe (monthly £1.49, with lower rates if you pay six-monthly or annually) you can use the app to see if any listed share is Shariah compliant. I could not see which markets are covered, but would expect it to cover the UK and USA at least. You also get access to financial planning tools, which would help those who cannot do their own budgeting or record keeping.

The app describes two services that are not yet available:

As I have previously written, one of the joys of living in the UK is easy access to financial information about British companies. Accordingly, I investigated Kestrl’s website footer, part of which is reproduced below, verbatim.

“The Kestrl Account is issued by Contis Financial Services Ltd who are authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 (registered number 900025). The (brand name can be used here) Account and Card are electronic money products which are not covered by the Financial Services Compensation Scheme. The funds will be safeguarded by Contis Financial Services Ltd.”

The middle sentence is obviously a mistake, since nobody would publish such a sentence intentionally!

Very early in my career as a tax advisor, the partner I reported to explained that clients are often in no position to assess whether your tax advice is good or bad, since tax requires specialist understanding. However, clients can always tell if your letter contains spelling or grammatical errors, and that is the fastest way to lose your client’s confidence.

Accordingly, Kestrl really need to fix their website footer urgently. (They originally spelt the name of one of their advisors, Sultan Choudhury OBE, incorrectly, but that has been fixed after I pointed it out to him at the IFN London Forum.)

Obviously after reading my Islamic Finance News article, Kestrl corrected their footer, so the relevant sentence now reads: "The Kestrl Account and Card are electronic money products which are not covered by the Financial Services Compensation Scheme."

The Kestrl Ltd annual accounts are available from the UK’s Companies House; the most recent ones being for the year to 30 April 2022. The law does not require them to be audited, so they aren’t. The company had accumulated losses of £417,577, up from £229,906 at the previous balance sheet date. Such losses are not surprising in a startup.

The directors have booked a revaluation gain of £8 million (up from £5 million) based on revaluing the intangible assets, which are not described but I assume to be their software investment etc. [Update: In the 2023 accounts this revaluation reserve has disappeared.]

Mohammed Amin is an Islamic finance consultant and former tax partner at PwC in the UK.


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