Top 5
As Islamic finance grows and expands into new markets, greater opportunities have emerged and the technology that comes with it has evolved. World Finance spoke with Rosie Kmeid, Global Head of Corporate Communications and Marketing at Path Solutions to find out more.
What were the biggest challenges in the sector last year?
The biggest challenge faced in the Islamic finance technology sector was the reluctance to invest in new software applications due to global economic uncertainty and political unrest in many regions. This caused reluctance in adopting new solutions, and possibly postponing any planned projects until the turbulence settles down. Of course, this has had a negative impact on Islamic financial services, which is a sub-sector of the global financial services industry.
What do you anticipate the trends will develop to be in 2014?
Recently the banking industry has been focusing on customer relationships, risk management, and micro finance. We believe this will remain the focus this year, whereby with the hope that political unrest will be resolved, risk management and regulatory compliance will be key trends to allow the financing sector to mitigate the different risk factors as prescribed under Basel II and III.
Digital banking trends are also projected to predict their biggest push, where we will see greater experimentation in new products built around mobile, web and social commerce. By 2015, it is projected that over 60 percent of customers worldwide will be using mobile banking, and more than 90 percent will use online banking, according to a survey by Capgemini. More and more people are quickly embracing these tech trends and advances as they will have the luxury of performing their businesses anywhere, anytime.
How has the development of Islamic finance in Africa impacted the technology sector?
The origin of Islamic finance in Africa can be traced back to the 1960s with Egypt being the first African country to offer Islamic banking products. Several African countries followed suit, which helped raise the African market for Islamic finance. Recently it has been noted that many existing banks are considering the conversion to Islamic banking in Nigeria, Kenya, Somalia and other nations across the continent.
The origin of Islamic finance in Africa can be traced back to the 1960s with Egypt being the first African country to offer Islamic banking products
This of course has positively impacted on the sharia-compliant technology providers allowing them to supply these banks with the solution to support their new initiatives. African banks have been approaching Islamic finance aggressively, and are providing state-of-the-art ethical banking services with the same level of service their customers are used to in conventional banking. This includes internet and mobile banking, while they have also focused on servicing the SME business layer by providing sharia-compliant micro finance solutions to expand and support a wide range of non-subsidised Muslim resources.
From which region do you anticipate the most interest this year?
We believe that growth will be sustained in Africa, though this will be subject to the slowdown of the turbulence in some areas, especially North Africa (Egypt, Libya, Algeria and Tunisia). Of course, we have noted some demand in other parts of the world, like the Sukuk initiative in the UK, and the growing Islamic banking in CIS countries, for example Azerbaijan, Kazakhstan, Tajikistan and Russia.
What do you see will be the biggest challenges this year technology-wise?
This will be coping with the banks’ appetite to provide next-generation services to their customers, addressing data privacy and the security of information, cultivating customers’ loyalty and giving them increased confidence and the convenience to perform safe online banking transactions.
We also consider that cloud computing will facilitate infrastructures proven valuable with the globalisation of financial institutions, which operate international activities or cross-border finance, requiring a robust infrastructure to reach all branches around the world.
