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Survey of Global Islamic Finance
VRL Financial News Publishing, Sep 2009
Although the Shar'iah-compliant retail financial services industry is still in the early stages of development in many markets, there are some lessons and best practice issues emerging in the industry
This report looks at the likely trends within this market and assesses the future potential for growth in mortgage finance, credit cards and wealth management.
Success in Shar'iah-compliant financial services
The expansion of the Shar'iah-compliant financial services industry has been largely due to the growth in its consumer finance and retail banking products
One of the major requirements for a player to succeed in the Shar'iah-compliant financial services industry is to gain a thorough understanding of the concepts underpinning these activities.
Furthermore, there has to be a long-term commitment to the industry.
The knowledge of Shar'iah requirements as well as the unique features and attributes of Shar'iah-compliant products needs to be disseminated to all staff members and departments dealing with those products. Previously marketing these products fail to understand and communicate the benefits to the customer. This can create major doubts in the mind of the customer on the desirability of Shar'iah-compliant products.
Any conventional financial services player exploring the possibility of offering Shar'iah-compliant products also needs to be aware of the cannibalisation issue, whereby sales of Shar'iah-compliant products potentially substitute for sales of conventional products, rather than increasing the sales base overall. This could result in internal conflict as well less than optimum performance of Shar'iah-compliant business, as it competes against conventional products.
Future prospects
Currently, Shar'iah-compliant financial services activities are dominated by the GCC countries and Malaysia. However there remains huge potential for substantial long-term growth in Islamic financial services in markets including: Indonesia, Pakistan and the UK.
Highlights:
Growth in Islamic Banking
Success in Shar'iah-compliant financial services
Future prospects
- Key considerations in Shar'iah-compliant financial services
- Approaches towards Shar'iah compliance in Southeast Asia and the Middle East
- Corporate structures in Islamic banking and finance
- Growth drivers in the Islamic consumer finance and retail banking industry
- Shar'iah-compliant retail finance products
Case studies include: Bank Aljazira, Bank Islam Malaysia, Bank Niaga, Dubai Islamic Bank, Julius Baer, LaRiba, RHB Islamic Bank and Takaful Tawuni
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