Ahmed Khizer Khan on banking in Pakistan | Burj Bank | Video

Transcript

Pakistan‘s central bank is pursuing strategies to promote Islamic banking, including establishing fully-fledged Islamic banks in the private sector. Ahmed Khizer Khan from Burj Bank discusses the advantages of Islamic finance.

World Finance: Briefly introduce us to Burj Bank and your market position

Ahmed Khizer Khan: Burj Bank is the newest bank in Pakistan. I think the best way to look at it is that the Islamic market in Pakistan is divided into two categories, the first one is the fully-fledged Islamic banks, there are five of those, and then there are thirteen windows. When I say ‘windows’ for an Islamic bank I mean the parent is probably a conventional bank, and their window operation, as we call it, for Islamic banking.

Burj Bank is a fully-fledged Islamic bank

Burj Bank is a fully-fledged Islamic bank, and it’s the newest Islamic bank. It used to be called Dawood Islamic Bank and it got rebranded to become Burj Bank, and we are positioning ourselves based on service delivery, the quality of service we provide, and, Alhamdulillah, that’s allowed us to become one of the fastest growing Islamic banks in Pakistan.

World Finance: You talk about the importance of service quality, what are your key products and services?

Ahmed Khizer Khan: The main products are our deposit accounts and in the asset book we grow on various mudarabah, musharakah, the Islamic financing products. The other place that we have also started in the consumer banking arena is our autos product, and we are becoming pioneers in terms of launching new products and facilities. I think the key element in Islamic banking right now is a mix of various products that the customer requires and as far as our delivery channels are concerned, the main channels besides branches, we have the branchless banking we’re focussing on, we call it the ADC which is the Alternative Distribution Channel.

In anything that we do where we touch the customer or where the customer is touching us, we ensure service quality, we monitor it. So the focus on service quality is what’s differentiating us. From the time the customer enters a branch, the look and feel of the branch, the way the first person who they interact with, which we call a CSO, a Customer Service Operator, who is going to direct them, and depending upon what transaction they want to do, up until the time that they leave the branch. And the branch manager thanks them for coming in, we focus on service delivery.

World Finance: You mention the re-brand and the re-profiling process that took place in 2011, tell us about this and the challenges involved.

Ahmed Khizer Khan: I think re-branding is one thing that has worked phenomenally well for us. This bank was a family-owned bank so to speak, and that’s why it was called Dawood Islamic Bank, its major shareholding was with the Dawood family. We had a major change in shareholders, one of our largest shareholders is now the private sector development arm of the Islamic Development Bank, which is known as ICD, which is Islamic Corporation for the Development of private sector. Also we have Bank Alkhair which is a Bahrain based bank, we have a Kuwaity investor, we have UAE which is Gargash Enterprises, Daman Investments, so one of the things we noticed was this is now a middle-eastern heritage, the shareholding is significantly changed, and then we looked for various options, with our shareholders with our board, of names.

Islamic finance is probably one of the fastest growing elements in Pakistan

We really wanted to reach new heights, and Burj as you may realise is a name which is now associated with reaching a new level, a new height. The challenges mean that you have to rebrand every physical location, you had to get the brand across, and you had to earn from the customer the trust with the new brand. So we moved very fast on that, our marketing team did an exceptional job in making sure that the message was received, and what the brand stood for, what the objective was and what the bank wanted to accomplish was communicated effectively. And we overcame all the challenges, and the brand became one of the most recognised brands now.

World Finance:So in the context of Pakistan’s banking sector, what role does Islamic finance play?

Ahmed Khizer Khan: Islamic Finance is probably one of the fastest growing elements in the Islamic Republic of Pakistan. As you know, Pakistan is one of the most populous countries, there’s about 180 million people, it’s the second largest Islamic country in the world after Indonesia.Predominantly, the population are muslims, so therefore Islamic finance is a very appealing concept to the general public.

It is now that we have penetrated the market to become about 10 percent closer in Islamic banking, this is the entire Islamic banking industry, and the conventional banking has continued since the inception of the country, so they’ve been there for 65 years, whereas Islamic banking has been there for probably about 10 years. But it’s probably one of the most rapidly growing areas and like I said, the choice remains between fully-fledged Islamic banks, or the windows, but I think both elements are growing very very quickly.

World Finance: How important is transparency and inter-department communications, both at Burj Bank and in Pakistan at large?

Ahmed Khizer Khan: Well, I’ll speak for the bank first. I think one of the, if you like, the bases of our success has been the transparency, from anything else occuring, from the strategy to our execution of our strategy, to various difficult decisions we’ve been taking, to the good times in terms of when the business is doing well, everything is shared with our management and our senior team, and then trickles down into the organisation. One of the forums and ways we do this is in our town halls. So I travel from each city, and I have touched and communicated directly with about 85 percent of our staff, and there’s 1000 people that work at our bank. They have an open forum, so they ask any questions, the management sits on stage, they answer anything. Then we have a very effective board, I think transparency, governance is very strong at the board level.

So management, fiduciary responsibility remains to make sure that the staff has very clear direction at the bank, and what is important in terms of the board in terms of the shareholders, because at the end of the day, delivery of what the vision is is critical to our success. As far as Pakistan is concerned, I think I would apply the same principal anywhere, if it’s transparent, it’s clear, it’s honest, I think you’ll have less room for misinterpretation, less room for misgivings, and overall success. Transparency is critical for Pakistan also.

World Finance: You mention there the delivery of your vision, so finally, tell us where you want the bank to be in 5 years?

Ahmed Khizer Khan: We would like to be Alhamdulillah one of the fastest growing banks, we’d like to be the lead bank, we want the customer to make the choice to come to us. We want to be the bank that is looked at to be a progressive bank, which is coming out with unique solutions to cater to the customers needs. We would like to be considered the bank which is going to be the first stop for any customer when they want to have an Islamic finance, or and Islamic banking transaction. And when they leave or the transaction is complete, they should have a feeling that this is the right bank that they approached, that there is a lot of repeat customers and repeat business. As such, we would like to be the bank the choice that the customer makes, and Alhamdulillah, we are on that track.

Ahmed, thank you

Thank you.