Careers in Islamic finance tap into embryonic field

Choosing this line of work reflects a desire to leave a legacy for the next generation despite bumps and bruises along the way

By Rushdi Siddiqui, Special To Gulf News

My children, son (14) and daughter (11), asked a straight-forward two-part question as part of their homework assignment on parent car-eer choices: why did you choose Islamic finance? Will you retire in Islamic finance?

At surface level, they seem to be easy questions, but they are more difficult to explain than stock screening or writing about Sharia-compliant risk.

Query: Are there programmes or courses for children of parents in Islamic finance to train the next generation?

Entry

Today there are more roads leading to Islamic finance, but for those of us who got into this space in the mid-1990s, especially living in the West, it was not about the money, but an interest, a cause or an (job) opportunity to get into something during the post-formative stages of development, i.e., after establishment of IDB, DIB, KFH, Albaraka, Tabung Haji, etc.

All of us in one way or another want to leave a legacy behind for the ‘village' that raised us, and Islamic finance, being embryonic, better affords that opportunity, even today. Put differently, conventional finance and capital markets are older, more developed and efficient vis-à-vis Islamic finance, hence, less opportunity to make a mark.

For example, over the years certain people have been equated for achievements at certain institutions, even if affiliation is no longer evident. Iqbal Khan (founder of HSBC Amanah), Richard Thomas (UBK), Esmail Daddabhoy (Islamic repos at UBS), Governor Zeti Akthar Aziz (Islamic central banker), Michael McMillian (Special purpose vehicles for Islamic structures), and people have equated me to Islamic indexes (Dow Jones Indexes).

But there has to be due credit given to (western) conventional institutions, especially non-banks, that have embarked upon addressing the needs of the Islamic finance marketplace. To them, it's not about religious sentiment, but new market opportunities, as many of their existing markets are mature and saturated, hence, eroding margins.

For Islamic finance, the credibility issue is neatly addressed when institutions like S&P, Thomson Reuters, Clifford Chance, and PWC enter the space, as these global brands will not risk tarnishing their brands without due diligence on a sizeable opportunity. And their decades of experience is the need of the hour for this niche market to become ‘conventionally efficient and competitive.'

Thus I got interested in Islamic finance after I read an article in the New York Times and then saw a Tombstone ad in the Financial Times about a deal closed by The International Investor (Kuwait). I wound up at an index provider after I pitched the idea about being the world's first Index provider to have an Islamic equity index, and they saw an opportunity for licensing revenue with Islamic indexes.

Exit

Once people get into Islamic finance they may job hop from one Islamic finance entity to another, usually based on compensation during the pre-crisis days, while others stay at one firm until a sense of accomplishment of the vision or retire. So, for career Islamic finance people, it's all they know and it's how they are generally type-cast/labelled.

 Query: Do non-Muslims in Islamic finance encounter the same labelling issue? Is it easier for non-Muslims (than Muslims) to go (back) to conventional finance, or is this too broad a generalisation question?

Query: What about a Sharia scholar leaving Sharia advising or changing profession to become an Islamic banker or lawyer? Muddassir Seddiqi, no relation, is a good example of a scholar turned scholar/lawyer. Is this a possible avenue for scholars going forward?

So, what kind of second career do Islamic finance people land? For example, Iqbal Khan, HSBC Amanah founder, is now founder/CEO of Fajr Capital, Hussain Al Qemzi, previous CEO of Sharjah Islamic Bank, is CEO of Noor Islamic Bank, and I went from being a Global director at Dow Jones Islamic Index Group (10 years) to Global head of Islamic finance and OIC Countries at Thomson Reuters.

The second career in Islamic finance is about a fire in the under-belly. It's a continued commitment to possibly (1) right some wrongs, (2) finish what you started, (3) make a difference, (4) pierce the Islamic ‘glass' ceiling, or (5) desire to go back to an unstructured environment to create value.

A career in Islamic finance is like raising a child; bumps, bruises and challenges at different ages, but also achievements and accomplishments along the way to adulthood. We get into Islamic finance for a cause and it becomes a causeway to a career.

Gulf News

Tamkeen and Ernst & Young to train 130 Bahraini graduates

Tamkeen has signed a $1.2m contract with Ernst and Young to train 130 Bahraini graduates in Islamic finance and business accounting, the labour fund’s CEO said on Monday.

Bahrain’s emergence as a banking hub in the region has created a growing need for professionals qualified in Islamic financial work, Tamkeen said.

A recent survey conducted by the firm found that more than 1,340 banking and investment specialists are needed to fill vacancies in the financial sector.

“One of the major challenges facing Islamic finance was the availability of a trained national workforce,” said Deen Jayah, the director of Ernst & Young's Business Community Training Center.

The Bahraini government plans to increase the number of nationals working in the private sector by 185,000 people over the next five years, with at least 35,000 locals to be trained in post secondary graduate and doctoral programmes to replace qualified expats.

Abdulellah Ebrahim Al Qassimi, chief executive of Tamkeen, said: “There are even greater opportunities in the Islamic finance area and we were keen to tap this arena of career growth for Bahrainis."

Ernst & Young is the only approved training provider for the Chartered Institute of Management Accountants (CIMA-UK) programmes in Bahrain.

As part of a new initiative by the CIMA, graduates will study and sit exams for the Certificate in Business Accounting or the Certificate in Islamic Finance, over a one year period. Students will also be trained to work in private banks at the same time, Jayah said.

Students will be separated into three batches, with training provided by professionals at the Ernst & Young's Business Community Training Center. Applicants will be selected through a competitive exams, interviews and group discussions.

Al Qassimi added that the scheme intends to empower Bahrainis by giving them opportunities to stand out as employees of choice, who can power the growth of the nation.

Link: http://www.arabianbusiness.com/576289-tamkeen-and-ernst-aamp-young-to-train-130-bahraini-graduates

Islamic finance 'important in accountancy'

Islamic finance is a growing issue in the world of accountancy, it has been suggested.

Daud Vicary Abdullah has just been appointed as global leader of Deloitte Touche Tohmatsu's Islamic Finance industry group.

He believes that the field should present new areas of growth for financial services firms for some time to come.

Commenting on the sector, he said: "The Islamic Finance industry is rapidly expanding, which presents opportunities for companies in various businesses around the world."

Deloitte's member firms already provide Islamic institutions with advice on matters relating to sharia compliance, as well as audit and tax issues.

Link: http://www.gaapweb.com/news/2062-Islamic-finance-important-in-accountancy-.html

In his new role, Mr Vicary Abdullah will support the member firms to ensure they are offering the best possible service.

Recently, Dr Mohd Daud Bakar, an international sharia expert, warned that the Islamic Finance sector could face a talent shortage in the future.

He urged institutions to ensure they are committed to the training of staff so they develop the skills needed to thrive in the field.

Could Islamic finance provide an accountancy jobs boost?

Islamic finance is an increasingly important aspect of some accountancy jobs, according to one expert.

Daud Vicary Abdullah, who has just been appointed as the global leader of Deloitte Touche Tohmatsu's Islamic finance industry group, explained that the sector is rapidly expanding.

He said: "The Islamic finance industry is rapidly expanding, which presents opportunities for companies in various businesses around the world."

Demand for such skills has seen Deloitte's member firms providing services including audit, tax and consulting to Islamic financial institutions, as well as advice on sharia compliance issues, Mr Vicary Abdullah added.

Recently, Dr Mohd Daud Bakar, an international sharia expert, called on the accountancy profession to ensure that people have the skills needed to help Islamic finance operations run smoothly.

He warned that the sector could face a talent shortage in the future if action is not taken to address the issue of staff development now.
Link: http://www.ashdowngroup.com/news/could-islamic-finance-provide-an-accountancy-jobs-boost--news-19475245

Skills shortage fear for Islamic finance

Shortage of expertise could hinder growth

Emily Beattie

A shortage of expertise and a lack of regulatory harmonisation among Sharia’a principles are the biggest obstacles for growth in the Islamic finance sector, according to a new report.

But accountants at BDO are predicting the sector will be embraced by London’s financial hub – more than half of executives in the Islamic finance sector believe it will grow by 10-20% in the next three years, as confidence in the conventional banking system has suffered a knock.

Just under a third of the executives believed that Dubai would be the leading financial centre for Islamic finance in three years, though London was also expected to be a major centre alongside Manama in Bahrain, BDO said.

The Accounting and Auditing Organisation for Islamic Financial Institutions, based in Bahrain, is seeking to improve the harmonisation of Sharia’a principles, and the major accountancy firms are involved in working committees that deal with accounting standards in Islamic finance.

‘As the business environment gets better so I would expect to see more Islamic financial institutions in London,’ said Mohammed Amin, head of Islamic finance at PricewaterhouseCoopers.

Amin said there is a shortage of expertise among Sharia’a scholars, the experts that are required to advise on the religious implications of Islamic finance. ‘The shortages are of people who are experts in religions and have the experience in finance,’ he said. ‘Sharia’a standards are produced by a panel of Sharia’a scholars, the main thing [the firms] can do there is to train these scholars to understand finance better.’

Link: http://www.accountancymagazine.com/croner/jsp/Editorial.do?channelId=-305535&contentId=1393086&Failed_Reason=Session+not+found&Failed_Page=%2fjsp%2fEditorial.do&BV_UseBVCookie=No

Is a career in Islamic finance right for you?

Mohammad Khan, director, Islamic finance at PricewaterhouseCoopers talks to Gavin Hinks about the opportunities available to those who want to move their careers into this fast-growing area.

Click the following link for video:
http://www.accountancyage.com/accountancyage/video/2251893/video-opportunities-islamic

Islamic finance must boost professional staff: experts

Islamic finance must strengthen regulation, boost its professional staff and diversify as it takes on a bigger global role in the aftermath of the worldwide financial crisis, experts said.

Financial products compliant with Islamic Shariah law are likely to gain in popularity as investors seek safer havens after the ruin caused by toxic derivatives sold globally by mainstream Western banks, they said.

However, experts warn that Islamic financial institutions must be on their guard against falling into the same unbridled excesses that jolted Wall Street and snowballed into a global economic downturn.

“Islamic finance is not immune from such pitfalls. Hence we must be careful to avoid this error in the Islamic financial industry,” said Muhammad Sulaiman Al-Jasser, governor of the Saudi Arabian Monetary Agency.

“Islamic financial institutions are continuing to invest time and effort to improve corporate governance and risk management and I expect that they will continue to avoid mistakes made in designing over-complicated securities,” he said.

He and other experts were speaking at a recent meeting of the Islamic Financial Services Board held in Singapore, which is aiming to be a key player in Islamic finance.

INTEREST

Islamic banking has been left relatively unscathed by the global financial crisis, largely because of rules forbidding engagement in the kind of risky business that sank mainstream institutions like Lehman Brothers.

Islamic Shariah law bars the payment and collection of interest, which is seen as a form of gambling.

RISK-SHARING

Islamic finance also operates on the principle of risk-sharing between the issuing bank and the buyer of a financial product, making it a less risky alternative to some conventional banking instruments.

Al-Jasser and other speakers told the Singapore conference that Islamic finance was likely to gather momentum in the aftermath of the downturn.

“It is my belief that Islamic finance has moved on to a new stage in the last few years. In the past, it was an individual decision based on faith, now it is competing on its own very strong merits in the global marketplace,” he said.

Islamic finance is now established in 47 countries with more than 600 institutions managing “balance-sheet assets” worth over US$630 billion, with another US$200 billion to US$300 billion managed as investment funds, he said.

Heng Swee Keat (王瑞傑), managing director of the Monetary Authority of Singapore, said more Asian countries were using Islamic finance to fund infrastructure projects.

‘SUKUK’

Issuance of Islamic bonds, called sukuk, in Asian currencies totaled US$64.3 billion last year, down 1.5 percent from 2007 when it expanded by 50 percent over the year before, Moody’s Investor Service said this month.

But the industry has much room for growth as Islamic finance represents only 1 percent of the total assets held by the global financial markets, experts said.

Ahmad Mohamed Ali, president of the Islamic Development Bank, urged the industry to offer a wider range of financial services, noting that commercial banking accounts for more than 70 percent of Shariah-compliant assets.

“There is a need for major investment banks that provide a different model of investment banking, a model that is able to have positive impact on economic growth without compromising stability and resilience,” he told the meeting.

“We also need varieties of venture capital institutions, small and medium financing institutions specialized in financing, leasing, etc,” he said.

As global regulatory bodies revise financial regulations to prevent future financial crises, Islamic regulatory and accounting standards must also improve, Ahmad said.

While the previous approach focused on regulating individual Islamic financial institutions, regulatory bodies should now adopt a comprehensive strategy to address both macro and micro-economic issues.

Muliaman Hadad, deputy governor of the Bank of Indonesia, said one of the key challenges was producing much-needed professional staff to deal with Shariah-compliant financial products.

EDUCATION

Indonesia, the world’s most populous Muslim nation, will also launch an education campaign across the country to help people — including bankers, bureaucrats, students and religious leaders — understand Islamic finance better.

Tunc Tahsin Uyanic, a sector manager for the World Bank in the East Asia and Pacific region, offered the bank’s assistance in personnel training, education, policy direction, development of new financial instruments and regulation. 

Link: http://www.taipeitimes.com/News/worldbiz/archives/2009/05/11/2003443302