Regardless of what has happened within the banking sector over the 18 months, Scotland still boasts an impressive financial services industry, comprising insurance, fund management, and wealth management.
The Edinburgh financial industry differentiates itself from London in a number of ways – it avoids much of the noise and short-term investment thinking that can be found in the City. The Scottish capital has a history of long-term asset management based on sound investment principles across different investment products: institutional pension funds, unit trusts, investment trusts. The Scottish asset management industry now controls around £550bn of assets invested across a global landscape.
In short, Scottish financial services firms are well-placed to benefit and play a part in the global Islamic Finance growth story.
For the uninitiated, Islamic Finance refers to a system of finance that conforms with the principles of Islamic law (or Sharia). On a basic level, in Islamic finance the payment or acceptance of interest is prohibited, as well as investing in businesses that provide goods or services considered contrary to its principles, which we would recognise as being ethical and socially responsible. It's worth around $1 trillion globally and is growing at estimated rate of 15%-20% per year. What's more the UK is recognised as the leading western country for Islamic Finance.
Scotland can increasingly take advantage of this opportunity and also attract the 'Islamic dollar'. Areas such as banking, asset management, wealth management and even insurance could move into Islamic Finance. The Scottish financial services industry and the government in Scotland are taking note of this short and long-term changing financial landscape, and are looking to attract such Islamic funds and investment into Scotland. This also has the added benefit of further diversifying Scotland’s financial services industry.
A number of the Scottish fund managers now manage funds that are 'shariah compliant', aimed at a more international investor base. Scottish fund managers have also won some recent Middle Eastern investment mandates and in due course there may well be an Islamic finance element to that. Away from the investment side, with the growth in Scottish expertise in technology, fund administration and custody of assets there are other opportunities in these areas for Islamic Finance.
This creates new job opportunities for people with the right skills, experience and flexibility to further develop the growth of Islamic Finance in Scotland. Scotland also has a sizeable indigenous Muslim population, estimated at 50,000. Interest in Islamic Finance in this area is also growing to the extent many young Muslim graduates are keen to break into the sector. The opportunities it creates are open to all, though, not just of the Muslim faith.
It is worth noting that Scotland has a proven track record in innovation and pioneering development within new market segments. Islamic Finance could also be one area that Scotland takes the lead in many areas specifically around asset management and fund administration. For the ambitious the opportunities are certainly there to be taken.
Link: http://news.scotland.efinancialcareers.co.uk/newsandviews_item/newsItemId-22674
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