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Innovation and invention in modern Muslim world Innovation and invention in modern Muslim world(0)

By Rushdi Siddiqui,

The Islamic Development Bank, held their 24th Annual Symposium in beautiful Dushanbe, Tajikistan, invited me to chair a session on ‘Innovating for Economic Development in IDB Member Countries’.

At first glance, the words ‘invention’ and ‘innovation’ are not typically associated with the Muslim world.

The word ‘imitation’ (or reverse engineering) often is linked to the third world, Muslim majority countries. Yes, there is some element of innovation involved in reverse engineering, from pharmaceuticals to electronics, but it’s not something to be proud about to entice, say, foreign direct investment. The bigger question is, how much longer should the Muslim world continue to flatter via imitation, i.e., a ‘Xerox’ society.

Innovation and invention have been traditionally linked to Islam/Arab/Muslims since the birth of the religion, but something happened along the way. We have become a society of buyers over builders, consumers over savers, exporters of capital and importers returns, hence, an unsustainable situation.

The first revelation to the Prophet Muhammad (peace be upon him) was about reading:

Translation: In the name of Allah, the Most Beneficent, the Most Merciful.

Read: In the name of your Lord Who created.

Quran: 96:1

Created man from a clot of blood

Quran: 96:2

Read: And your Lord is the Most generous

Quran: 96:3

Who taught [man the use of] the pen

Quran: 96:4

and taught man that which he did not know

Quran: 96:5

Reading implies searching and seeking information to the far corners of the world, from Arabia to China and beyond, that yields knowledge, which eventually becomes wisdom. A wisdom that gets applied for betterment of man (individually), society (collectively) and the stewardship for future generations.

Thus, our predecessors have contributed to sciences, humanities, culture, arts, mathematics (algebra, logarithm, system of numbers), etc., and acknowledged by the likes of Prof Carole Hillenbrand’s book, ‘What the East taught the West.’

Furthermore, there is a ‘mobile’ museum, 1001 Inventions: The Enduring Legacy of Muslim Civilisation, .. ‘…1001 Inventions uncovers a thousand years of scientific and cultural achievements from Muslim Civilisation from the 7th century onwards, and how those contributions helped create the foundations of our modern world.’ It has been showcased in the GCC: Abu Dhabi, Doha, and Dhahran.

There are number of theories, from conspiracy to self destruction, on what happened along the way for the Muslim world, as a whole, to become a ‘knowledge deficient society.’ We only have to look at the small number of patents filed form the Muslim world to the US Patent/Trademark Office, countries aspiring to become knowledge based economies in their 2020/2030 vision planning, countries establishing entities, like Malaysia’s Talent Corporation, to bring back the emigrated human capital, and so on.

Innovation formula?

There is neither an exact formula for innovation nor a firm timetable with milestones. Instead, innovation is about establishing a fluid enabling infrastructure, with accountable benchmarks, customised to the local situation. Some of the elements of enabling include:

Initially government leads but removes itself from being a market participant to avoid crowding out affect, hence, a sunset privatisation of innovation

Availability and accessibility of risk capital PLUS mentoring, Muslim majority countries are about collateral based finance, including Islamic banking. Therefore, funds alone will not result in success, but MUST include mentoring to include, say, opening doors to suppliers/customers, legal documentation, etc.

Culture and cluster that is focused addressing national/regional needs, hence, one size fits all becomes a ‘white elephant’ project.

Education both university oriented (reverse linkage) and harnesses power of street smarts via inclusion to offer market demand, not just based, solutions.

First step

The IDB has the credibility and financial muscle to possibly fast track innovation in selected Muslim countries like the UAE, Malaysia, Turkey, Saudi Arabia, etc., however, it must take a stakeholder approach.

It must understand that the constraints of a country and work within those challenges to offer a market based solution as innovation is not only about economic development, but, as important, economic diversification.

The benchmarks must be reasonable and measurable with two important milestones: employment generation and raising the gross national income (GNI).

Thus, as a first step, IDB should create an Innovation Council (IC) for several selected member country as pilot programmes. The members of the IC may include financiers, regulators, businessmen, academics, etc., to give 360 degree review of the landscape and a pathway forward towards leading instead of following.

The writer is co-founder and MD of Azka Capital, private equity advisory firm focused on halal industry initiatives, and he is an advisor to Thomson Reuters on Islamic finance and Halal industry. Views expressed by the author are his own

Rushdi Siddiqui: Is the Islamic finance industry ready for social media? Rushdi Siddiqui: Is the Islamic finance industry ready for social media?(0)

By Rushdi Siddiqui, co-founder and managing director of Azka Capital

Social marketing eliminates the middlemen, providing brands the unique opportunity to have a direct relationship with their customers. — Bryan Weiner.

Today, it seems Islamic finance is still stuck at a hard-copy of stage communication (faxes) when the financial world has moved on to Facebook, Twitter, blogging, etc.

Many Islamic financial institutions have Web sites, but how often is it updated beyond awards won? How many Islamic banks, takaful operators, Shariah consulting firms, industry bodies, etc, are on Facebook? Yet, the youth — its future clients — in many Muslim countries with Islamic finance are on Facebook.

What about the cross-sell of Islamic finance to non-Muslims as an ethical alternative? These potential customers are an important cluster of social media and they are continuously looking for offerings aligned with their values.

Several Islamic financial institutions have Twitter accounts, unsure how many of their (retail) clients are on Twitter. Do these institutions believe SMS, Internet and mobile banking is the “social media” connection to their clients?

Maybe the culture of social media is lacking in, say, the GCC. But we saw how effectively social media was utilised during the Arab Spring.

Fear

Is there a fear of technology among Islamic financial institutions? The fear of hackers stealing from customer accounts and identity theft? They have heard about horror stories on hacking from US- and EU-based banks with allegedly better (read, more expensive) firewalls.

Is there fear that social media connectivity will raise the level of transparency to conventional benchmarks standards and with accountability to follow? Put differently, will social media result in enhanced governance? It is not a bad thing in this post-credit crisis environment where companies are rewarded via a stable stock price and rave reviews for transparency and governance.

Is there fear that “bad news” concerning Islamic financial institutions will spread like wildfire if (deeply) connected to social media? It will spread anyway as news organisation coverage is supplemented by bloggers and tweeters in real time.

Resources

Is it a lack of resource issue in having, say, a “chief social media officer”? It would appear that Islamic financial institutions have not looked at public relations and outreach as an investment in their brand, but, rather, a cost of doing business.

Brand-building goes towards commitment to not only clients and staff, but long-term growth of the institution, including eventual cross-border expansion and future clients. Furthermore, during challenging market cycles, the message to the community, whose attention has become shorter, is the confidence inspiring “business as usual”.

Guidance

The Thomson Reuters Islamic Finance Gateway, or IFG, may just provide a guidance for Islamic financial institutions on understanding about the benefits of social media connectivity. It comes down to market intelligence, and the market place is the best source of “knowledge that powers” market movements. The community connectivity function of the IFG comes down to insights by industry experts making sense of the information overload, communicating about important sign posts on the road ahead and allowing community to interface with experts on a secure platform.

LinkedIn, Twitter

At the behest of colleagues, I joined LinkedIn about a year ago to connect with like-minded colleagues globally to share ideas and articles. Outside of unsolicited endorsement of people I have connected with, but, not worked with, it has been a pleasant experience, especially reading leadership articles.

Furthermore, I started tweeting a few months ago, initially on Islamic finance and the halal industry, but have expanded to issues related to Muslims, Islam, Muslim countries, etc. It has been a fulfilling experience and I should have joined much earlier. Why?

1. Tweeting forces one to convey their message in 140 characters, becomes very important in today’s world of short-attention span and information overload. Islamic financial institutions should be able to convey thought leadership within these constraints.

2. Twitter brings news in real time from multiple eyes, hence, it’s a multiple “op-ed” of the market place on the subject matter. The raw news provides more colour than polished sound-bites.

3. Twitter has allowed me to follow the likes of global leaders like His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and his comments in real time. He first tweeted about Dubai being a hub for an Islamic economy a few months ago.

Conclusion

Shaikh Mohammed’s tweets, at the time of writing this, on the performance of UAE government standards should encourage Islamic financial institutions to engage and embrace the social media to not only connect, but also to report developments.

Rushdi Siddiqui is co-founder and managing director of Azka Capital, a private equity advisory firm focused on halal industry initiatives, and an advisor to Thomson Reuters on Islamic finance and the halal industry.

Rushdi Siddiqui on Dubai’s timely Islamic finance strategy Rushdi Siddiqui on Dubai’s timely Islamic finance strategy(0)

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

As I was on DIFC’s Islamic Finance Advisory Council (2007) and presently on Malaysia’s Securities Commission International Islamic Advisory Council, hence, a number of colleagues have asked me about the recent announcement by His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

Shaikh Mohammed, stated: “Our cosmopolitan outlook to doing business continues to be our economy’s driving force. Adopting a modern and scientific framework for Islamic economies worldwide, here in Dubai, meets the demand from local, regional and international investors for a central hub to invest, grow and do business.”
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Back to the future of Islamic finance Back to the future of Islamic finance(0)

By Rushdi Siddiqui

When a person, company or ‘movement’ hit their glass ceiling of growth, then its time to go back to the future and review, reassess, and respond or ‘retire’.

At the recently concluded 19th World Islamic Banking Conference (WIBC), I spoke on ‘Global Strategies for Global Markets.’ For this niche market to have mainstream acceptance, its about the ‘4Ps.’

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The Weakest Link: Short-Term Liquidity & How It Impacts Islamic Finance The Weakest Link: Short-Term Liquidity & How It Impacts Islamic Finance(0)

By Rusdhi Siddiqui, Global Head of Islamic Finance at Thomson Reuters

Let me start off with a loaded question, what one word in Islamic finance is as important as Shari’ah, tax, accounting, regulation, and standardisation (STARS)?

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Mushtak Parker Interview Part III: Liquidity Management Challenge Mushtak Parker Interview Part III: Liquidity Management Challenge(0)

By Rushdi Siddiqui is the global head of Islamic finance at Thomson Reuters

In the last instalment of a three-part interview, Mushtak Parker, the leading journalistic voice on Islamic finance,   shares his   views on the  International Islamic Liquidity Management Corporation (IILM), education in Islamic finance, moving the industry to US$2 trillion (RM6.22 trillion), scholars on multiple boards, the late Dr Zaki Badawi and, finally, how he would like to be remembered. The following are excerpts from the interview.
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Mushtak Parker Speaks His Mind Mushtak Parker Speaks His Mind(0)

Leading journalist on Islamic finance tells why he is often ‘harsh’ on the industry and his other views

“To be persuasive we must be believable; to be believable we must be credible; (to be) credible we must be truthful.” Edward Murrow.
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SPECIAL COMMENT: Eliminating the disconnects in Islamic Finance SPECIAL COMMENT: Eliminating the disconnects in Islamic Finance(0)

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

IF ISLAMIC finance (IF) is about business, then, logically, the product offering must primarily be about business and syariah compliance second, correct?  Read More

Islamic finance: Fitting In & Standing Out Islamic finance: Fitting In & Standing Out(1)

By Rushdi Siddiqui

A Sharia-compliant equivalent of the popular UK and US reality show The Apprentice has recently been announced by a UK-based organisation.

This follows the news of an ‘Islamic Facebook’ and ‘Halal-Tube.’ The Muslim world also has superheroes, like The 99, Muslim dolls (Dara and Sara), Muslim Cola (Mecca Cola), Islamic car, and so on.
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Special Comment: Hitting the glass ceiling? Special Comment: Hitting the glass ceiling?(0)

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

To grow, Islamic banks must compete with conventional lenders

Dedicated Islamic banks are generally national in nature and in certain markets have reached their ‘natural market share’ for Islamic banking, according to an A.T. Kearney study.

A recent report by the consulting firm A.T. Kearney, The Future of Islamic Banking, and a Reuters article, ‘No windfall from Qatar ban on Islamic windows’, have generated much productive chatter globally.
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