INTRODUCTION What is Islamic finance? Islamic finance is a financial system that operates under Islamic law (called sharia) and is, therefore, sharia compliant. Just like conventional financial systems, Islamic finance includes banks, capital markets, fund managers, investment firms and insurance companies. However, these entities are governed by both Islamic law and financial industry rules and regulations that apply to their conventional counterparts. Therefore, Islamic finance must be asset-based as opposed to currency, whereby investments are structured around the exchange or ownership of assets, and money is simply a mechanism for the transaction process. It would be based on two sources which are Al-Quran and As-Sunnah. History of Islamic Finance The modern Islamic finance sector is young, its chronology begins only a few decades ago. However, Islamic finance is rapidly engaging and continuing to spend to serve a growing population of Muslims and conventionals. Here is the brief history of the modern Islamic financial sector:1. In 1963, Mit Ghamr Savings Bank was opened in Egypt, becoming the first modern Islamic bank. Also in 1963, the Pilgrims Saing Corporation of Malaysia began to incorporate the basic concepts of Islamic banking. In 1975, the Islamic Development Bank opened in Saudi Arabia and gave the Islamic finance sector an international presence. Recruits member countries and offers them financial products to promote economic and community development.4. In 1979, the first Islamic insurance company (takaful) was founded. All Muslims at that time could not purchase conventional insurance products as they involved interest-based transactions, uncertainty and gambling which...... middle of paper ....... If Islamic finance needed to impose higher risks to their customers, but still follow the rules and regulations included in Al-Quran and Al-Sunnah. From this, Islamic finance can still focus on its customers' well-being and wealth. Finally, in terms of services and management of Islamic institutions. Muslims need a training process for all staff working under Islamic institutions. They must provide enormous knowledge about Islamic financing and the importance of Islamic financing to our lives. From this, awareness of Islamic finance would increase. Workers can also deal with their clients or investors more effectively and efficiently when it comes to Islamic financing. It would also build customer loyalty on their products and services. Information would also be disseminated accordingly according to Shariah principles.