Follow the money

A panel of Islamic finance experts, gathered in Toronto at a major conventional finance industry meet, agrees that it would be a matter of time before the rest of the world get on the Islamic finance bandwagon.


From left: Sibos TV compere Kavita Maharaj, Rushdi Siddiqui, Daud Vicary Abdullah, Yakub Bobat and Afaq Khan.

“Follow the money,” was how the panel of four, including INCEIF President & CEO Daud Vicary Abdullah, summed up the future of Islamic finance when the panel appeared on Sibos TV to discuss wide-ranging Islamic finance issues. Earlier, the four, who included Rushdi Siddiqui (Moderator), Global Head of Islamic Finance, Thomson Reuters; Yakub Bobat, Global Head of HSBC Amanah, Commercial Banking, HSBC; and Afaq Khan, CEO, Islamic Banking, Standard Chartered Saadiq; discussed similar issues at the first-ever Sibos session dedicated to Islamic finance.

Sibos 2011, the annual conference of the Society for Worldwide Interbank Financial Telecommunication held from 19 to 23 Sep, attracted more than 8,000 participants from all over the world.

“Non-Muslims are increasingly showing an interest in Islamic education and financial products. Education is important to give everyone a level playing field,” said Daud Vicary Abdullah. More than a third of INCEIF students were non-Muslims and he expected this to increase.

While more than 90% of sharia assets are in the Middle East and Malaysia, there is an increasing demand for Islamic finance instruments to be applied to trade more broadly.

Afaq Khan said trade is the backbone of the global economy and as growth and trade shift east, non-Muslim countries have to better understand the preferences of Muslim countries. He added: “We are also seeing a greater desire for sovereign wealth funds to invest in an Islamic manner beyond their borders.”

The panel also highlighted the fact that more than 90% of Islamic finance assets are located in the Middle East and Malaysia, but Western markets are increasingly opening up to (or exploring the opportunities of) Islamic Finance including the UK, France, Australia and Luxembourg. The US and Canada are likewise exploring opportunities, with Toronto being touted as the future North American hub for Islamic Finance. Earlier this year, PwC has ranked Toronto second only to New York City among “capitals of finance, commerce and culture,” citing Toronto’s intellectual capital, costs and liveability among the reasons for its choice. The Banker counts Toronto among the top 10 financial centres in the world.

The demand for Sharia compliant financial products is stronger than ever.  Opportunities exist for non-Islamic financial players to expand into the Middle East and Asia (amongst many other markets) and for Islamic financial players to expand into markets such as North America.

An article on the session also appeared in the official publication for Sibos 2011.

Source: Sibos Issue | www.sibos.com | 21 September 2011 |

 

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