Source: Arab News | Published: Aug 28, 2011 19:19.
The new president and chief executive officer of the International Center for Education in Islamic Finance (INCEIF), the Islamic finance education arm of Bank Negara Malaysia (BNM), Daud Vicary Abdullah has called for a much closer alignment between the global Islamic finance industry and the providers of human capital development.
Vicary, who prior to this appointment was the global head of Islamic Finance at Deloittes, the international auditing and consulting firm, started his new position at the beginning of this month succeeding Agil Natt who retired at the end of July 2011 and who headed INCEIF since its establishment by the Malaysian central bank in 2005 to offer postgraduate Islamic Finance programs, namely the Chartered Islamic Finance Professional (CIFP), a Masters in Islamic Finance and a PhD in Islamic Finance.
As a market practitioner with over 12 years of experience in the Islamic finance industry, Vicary recognizes that INCEIF and its programs should have much greater interaction with and relevance to the Islamic finance industry.
In his personal blog, he confirmed that many of his former industry colleagues including senior executives based overseas have volunteered to give lunchtime lectures to the student body and are keen to make a contribution to the further development of the center.
“INCEIF is very much driven by and for the industry. This level of interest and commitment from practitioners is most encouraging and augurs well for the future as we strive to build depth and quality on a global basis. We have also recently conducted a series of focus groups in order to get feedback and further direction for our CIFP program,” he added.
He is also concerned about global standards in Islamic finance and strongly believes that the development of standards in many areas, are vital to the continuing growth of the industry.
“Markets like certainty and standards help to provide that. Over the past couple of years I have been encouraged by the level of focus and understanding on how important standards are to our growth. The challenge, of course, is the implementation. Once you have gone beyond the stage of determining that standards are required, you then need to start tackling the issues of how they will be implemented? What will be the governing body, how will global acceptance be achieved? How will changes and updates be made? Who will be responsible for updates and amendments? How do you ensure that there is a fair and balanced feedback mechanism? All of these issues need to be addressed as well and sometimes can be tougher to execute than the initial decision to establish a standard in the first place,” he maintained.
This applies equally to the implementation of certifications and standards in the field of education in Islamic Finance.
In one of his first interviews since starting office, Vicary advised that “the Islamic finance industry continues to grow and develop apace and a standard-setting body, such as ACIFP (Association of Chartered Islamic Finance Professional) which represents the industry, needs to move further into this space and create appropriate industry standards for human capital development. The delivery against these industry standards would need to be independently accredited. We are still in the early days of development as an industry, but would envisage ACIFP taking on a global role such as CIMA and ACCA have in the accounting profession, for example.”
He plans to build on the infrastructure already in place.
“I am delighted to have the opportunity to build on the success of my predecessor Dato’ Agil Natt. In particular I will be looking to build on the CIFP program to ensure that it becomes the most relevant and premier Islamic Finance professional qualification in the world.”
Going forward, his strategy for INCEIF is underpinned by three key objectives. The first is to maintain close relevance to the Islamic finance industry.
“We have and will continue to keep our channel of communication open with the industry players through, among others, focus group discussions and engaging the industry in enhancing our syllabus to keep it current with industry needs,” he explained.
The second is to build on and to enhance quality. This is important because although Malaysia is one of the global front runners in Islamic Finance, “we are aware that others are playing catch-up. Therefore, we are always striving to improve, benchmarking ourselves against international standards not just on Islamic finance, but other encompassing aspects that make an organization world class be it services and product offerings.”
The third is to develop a global reach from a strong base in Malaysia, whose brand of Islamic finance has already made its mark on the global scene.
“As an education provider,” he stressed, “we want to ride on this and where possible, team up with strong partners in their respective countries. It is still early days but a number of current partnerships are already showing results.”
A major criticism of INCEIF and Islamic finance education in general is the lack of connectivity between education and employment placement. Islamic finance education providers have perhaps unfairly been criticized for not focusing enough on getting employment placements for their graduates.
In this respect, INCEIF is already working on a number of new initiatives.
These include, the development of industry focus groups, more frequent use of industry-led lectures where prominent market players share their experience at monthly lectures, and a thorough review of our flagship Chartered Islamic Finance Professional (CIFP) program and content so as to continuously improve our industry relevance, through such things as case studies and simulations.
“We are also looking into the development of working partnerships with industry on research and placements for CIFP students. I also hope to leverage on my close personal ties with the industry around the world and a.m. already receiving a number of offers and suggestions on industry contribution to both CIFP and research programs,” he added.
INCEIF’s future development strategy will be a balance between capacity building and curriculum development on the one hand and forging academic synergies and tie-ups with other institutions worldwide on the other hand. Both need to be kept in balance in line with the three key objectives highlighted above, according to Vicary.
This will be challenging but INCEIF needs to move forward on both fronts in order to develop and reach the next level.
At the same time, the development of a research function and capability at INCEIF is a vital area for the new president of INCEIF. The importance of a good research function, he emphasized, is to draw more industry and public attention to the considerable work that has already been done; to enhance and develop the synergies with the center’s sister organization ISRA (International Shariah Research Academy for Islamic Finance); and to develop and collaborate further with industry, not only in the area of specific research as guided by them, but also in the broader field of Thought Leadership where INCEIF can play a significant role in helping to define the future of Islamic finance.
“Our public lectures and discourse series are held every quarter to invite discussions among academia, industry practitioners and regulators on current issues affecting Islamic finance,” he said.
As at June 2011, according to INCEIF, enrolment of students reached 1,930 – comprising 1,755 Chartered Islamic Finance Professional (CIFP) students, 67 Masters in Islamic finance and 108 PhD in Islamic finance candidates. To date, INCEIF has turned out 113 CIFP and Masters graduates, and hopes to award its first PhD’s at the end of the current academic year.
The figures do not give the breakdown in terms of distance learning programs or attendance-based courses.
The importance of the human capital challenge for the Islamic finance industry cannot be over-stated.
The International Monetary Fund (IMF) last September published a working paper titled “The Effects of the Global Crisis on Islamic and Conventional Banks: A Comparative Study” in which it warned that expertise in Islamic finance has not kept pace with the rapid growth of the industry. The human capital challenge is dire given that Islamic bankers need to be familiar with conventional finance and be versed on the different aspects of Shariah, particularly on the Islamic law of transactions.
Such a requirement is becoming essential given the increasing degree of sophistication of Islamic financial products. But as the IMF Paper points out, “professionals with this dual qualification are hard to find, although the number of newcomers in Islamic finance is steadily growing. Not surprisingly, the shortage of specialists also has an impact on product innovation, and could hinder the effective management of risks relevant to the industry, including the lack of instruments to hedge against the volatility in currency and commodity markets and the relatively higher liquidity, legal, and reputational risks.”