RFi Group Global Islamic Banking Breakfast, Dubai

RFi Group Global Islamic Banking Breakfast, Dubai 

On Wednesday 1^st February, RFi group held the Global Islamic Banking Breakfast in Dubai. The industry gathered to address the growing significance of Islamic Banking across the Gulf Cooperation Council (GCC) and the Middle East and North Africa (MENA) regions, as well as best practice and context from other leading markets around the globe.

Although a spectrum of expertise and experience was present, one unanimous take-out was apparent: the Islamic Banking sector is one of the key growth opportunities for the UAE.

Mobasher Zein Kazmi, Head of Islamic Banking Research, RFi Group, shared the latest insights from the Global Islamic Banking Report, a study of 14 markets across MENA and South-East Asia. Through consumer insights in satisfaction, openness, desires and advocacy drivers, Kazmi shared where the opportunity lies and how to leverage it:

“We have seen a sustained and steady build-up in the participation of Islamic banking participants, with almost 1 in 3 having established some form of an Islamic banking relationship in the UAE.  Those relationships will only be consolidated and enhanced further, driven primarily by Emiratis and Arab expatriate residents in the UAE, with more than half choosing Sharia compliant products to service their banking needs.”

Amal Masri, Editor in Chief of Middle East Business and female advancement leader across the MENA region led a panel of key industry stakeholders to determine the tools for growth and the size of the opportunity both locally and internationally. She opened with some inspiring statistics:

“By the end of this year, the Islamic Finance assets will reach USD2.7 trillion, which is 2% of the Global Finance assets. Therefore, this leaves us with 98% of the market to tap into.”

Islamic banks, as well as both local and international banks with Islamic arms to the business, are set to benefit from this growth sector. Ali Allawala, Head of Islamic Retail Banking at Standard Chartered revealed their intentions to remain at the forefront of this innovation race:

“At ‘Saadiq’ (Standard Chartered Islamic Banking), we have intensified the preparation for Standard Chartered to not only be part of that phenomenal growth, but to lead the way with innovative, best-in-class Shari’ah-compliant products, human capital development, digitization and expansion in our geographic footprint.”

Technology dominated a big part of the conversation as a means to empower the front line for an improved customer experience for the customer of today. Aladdin Al Deesi, CEO of Mashreq Al Islami explained:

“Today’s Millennials are heavily geared towards ease, functionality, are heavily tech savvy, are always-on social media, and capturing their share of wallet is more than vital for the Islamic Banks in order to sustain their customer bases in the future.”

Beyond retail banking, where the majority of current Shari’ah compliant products sit, is a segment largely untouched by Islamic Finance. Harris Irfan, a world leader in Islamic banking, and author of the best-selling book “Inside the Hidden World of Islamic Finance”, highlighted the opportunities within the SME market:

“Islamic finance has made good progress at the retail level and also in the development of complex products for wholesale/high net worth sectors.  The middle ground, occupied by SMEs, has not been well served because raising capital for SMEs requires extensive due diligence and relatively high volume in order to be commercially viable for banks.  In my view, harnessing the power of fintech through Shari’ahcompliant electronic crowdfunding platforms could be the most suitable solution to raise funding for SMEs. Underlying contracts and investment processes can be largely standardised to encourage high volume, and transaction costs would be minimised.”