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Daud Vicary Abdullah is Global Leader of the Deloitte Touche Tohmatsu (DTT)
Islamic Finance Industry group. Daud, based in Kuala Lumpur, oversees the
overall strategy and development of DTT's Global Islamic Finance Industry group,
and provide guidance to member firms on governments, corporations, and financial
institutions related to the Islamic Finance sector. Daud was the first Managing
Director of Hong Leong Islamic Bank, and following that, he became the Chief
Operating Officer and Acting CEO at Asian Finance Bank. A distinguished fellow
of the Islamic Banking and Finance Institute of Malaysia (IBFIM), Daud is also a
Chartered Islamic Finance Professional (CIFP) and a former Board member (2003 –
2007) of the Accounting and Auditing Organisation for Islamic Financial
Institutions (AAOIFI). He is the author alongside Keon Chee of"Islamic Finance:
Why it makes sense - Understanding Its Principles and Practices" published in
January 2010 (Marshall Cavendish).
The following article was first published in the Islamic Business section of
Business Point (see
reference link) and is reprinted here with
permission. It is built on the concept of E.P.L. for the Islamic Finance
Industry: E standing for Education, P for Perception and L for Liquidity.
As highlighted earlier I want to take a look at the impact of EPL on the
development of Islamic Finance. E is for Education, P is for Perception and L is
for Liquidity. My plan is to share with you some comments on each of these
topics over the next couple of months. So here goes on Education.
From my perspective, as an Islamic Finance Practitioner and observer for the
last 20 years, Education in Islamic Finance can be broken down into three key
areas:-
1.Academic
2.Industry training
3.General Public Awareness
Let's take a look at each of these areas in turn.
From an academic perspective there are now a number of courses in Islamic
Finance being run at universities and business schools around the globe. This is
a reflection, in part, that the Islamic Finance business is expanding and that
there is a need to produce expertise in areas ranging from Sharia'a to product
development. The structure and content of these courses vary from the very
academic to the less academic with some industry content. All in all I would say
that this is still a "work in progress" and there is still much to do and learn
about providing the right structure and ammunition for young students who decide
on embarking on such courses to get them ready for business and to be valuable
to the ongoing development of the industry. This is, of course, a challenge
throughout for academia, either getting students ready for the real world or
preparing them for a lifetime of research. Both routes are relevant, but for
Islamic Finance we have yet to get the balance right.
The cry from the industry and from regulators and indeed commentators is "feed
us with more people to fuel the growth of the industry". I think we need to
temper the quantity with quality, because from where I sit, I am yet to be
convinced that we are turning out enough people of real quality who are prepared
and capable of taking the industry to the next level. As I said earlier, it is
still a work in progress.
OK. Now it's time to take a look at industry training. I think this topic can be
broken down into two broad areas.
1. The first is specific industry training, either for practitioners who want to
build a broad area of skills in Islamic Finance and dedicate their lives to the
industry OR develop specific skills, in depth, around key areas such as Shari's,
Risk management etc.
2. The second area is the provision of training for those people who have a
passing interest and want to learn more in order to understand the benefits that
Islamic Finance can bring and capitalize on its opportunities.
These two broad areas need, in my opinion, different approaches. Not only in
terms of content, but also, in terms of delivery method. Almost a case of
"speaking to the listening of the student."
I am afraid that there is a need for greater quality control throughout in this
area. I have seen some awful examples of people jumping on the bandwagon in
order to make a quick buck and try to deliver "quality" training. I have also
seen the complete opposite, with relevant, well crafted, well thought through
and well delivered content.
There is probably a need for more certification and the development of
recognized industry standards. This will take time and in the meantime I am
afraid that there will continue to be a good deal of muddling through. The only
advice I can give is check with people you know and trust and ask for their
feedback.
The final area I would like to address is raising general public awareness. Here
I am NOT thinking about Islamic Finance training courses for everyone, but
rather raising awareness through Financial Literacy training, on the salient
points and value proposition of Islamic Finance.
Still the most frequently asked question I get is "do I have to be a Muslim to
participate in Islamic Finance". The answer is patently NO, but the number of
people who ask it would indicate that this still not clear. I would also venture
the thought that the general public at large does not have that much idea about
conventional finance, let alone the Islamic variety. Here is a major opportunity
to embark on financial literacy programs at schools and community centres so
that everyone has the opportunity to understand the basics and make some more
informed choices in areas that will impact on their day to day lives. In some
way this type of education, which includes observations on Islamic Finance, will
start helping to dispel some of the myths regarding Islam and Islamic Finance.
That, however, is another story and one which I shall cover in my next article
on PERCEPTION.
There is much to do and not a moment to lose.
Your feedback and comments are very important to us, please feel free to contact
the author via email.
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