Investment in Islamic finance key to future growth

The call came during the International Islamic Finance Forum (IIFF) Europe which closed yesterday (Tuesday November 14th) at the Swissotel in Zurich, claimed event organisers, the Institute for International Research (IIR).

Addressing over 200 international delegates on the opening day of the forum, Khalid Abdulla Janahi, Chairman of Faisal Private Bank (Switzerland) SA, said that as finance professionals they should agree to dispel certain 'industry myths' concerning two key issues. "Conventional banks are not providing human capital for Islamic banks, in truth Islamic banks are producing the talented industry professionals. Secondly, we do not simply take conventional products and turn them into Sharia'a compliant products, they are home-grown by Sharia'a Scholars," stated Janahi.

Elaborating on each point in turn, Janahi stressed the need for Islamic banks to invest still further in human resource development, the lifeblood of the industry, if true Islamic banks are to differentiate themselves as the industry grows and becomes more competitive, especially in the Middle East. He also implored industry professionals to spend more money on the research and development of new Sharia'a products, essential to maintain growth and meet the demands of Muslim investors worldwide.

Janahi went on to highlight the need for regulation in the industry, but also in the implementation of the rule of law outside of the industry, if the Middle East is to truly become a private banking safe haven, as is the case in Switzerland. "Standards need to be more dynamic, and it is people that are hindering this process - not the scholars. They have done an incredible job in helping the industry to move at such a fast pace, but some regulators still have great difficulty breaking away from old habits," added Janahi.

The Forum examined a wide range of Islamic Financial issues, such as Islamic bonds, the mortgage market, investment banking, wealth management and private banking, risk management, project financing and the fast developing Takaful funds. Other interesting facets debated were Islamic accounting, Islamic Life assurance and bancassurance.

Other key topics discussed yesterday on day two of the forum, were asset management and investment banking, corporate finance and regulatory issues and Islamic retail finance. In addition three post-forum workshops start today, which will examine the principles and objectives of Islamic Finance, the legal and regulatory aspects of innovative structured Sukuks and Islamic real estate investment.

John Sandwick, Managing Director of Encore Management SA, Switzerland stated, "It has been interesting to note, that although European banks were eager to understand more fully, the fundamentals of Sharia'a compliance, Islamic banks especially those from the Middle East were equally keen to gain more knowledge of conventional industry regulation and standards."

In total, over 50 expert speakers addressed the forum, including Rushdi Siddiqui, Global Director, Dow Jones Islamic Indexes, USA; Alex Barkawi, Managing Director, SAM Indexes GmbH, Switzerland; Maurice Baudet, Director General Association Suisse des Gérants de Fortune (ASG), Switzerland; Fares Ahmed Mourad Director Asset Management Division, Global Head -Islamic Investments, Credit Suisse, Switzerland.