Posts Tagged ‘Islamic Banking’

Walid Aradi discusses why Dubai is well positioned to as a financial hub for international Islamic finance

Recently, Tahseen Consulting’s Chief Executive Officer, Walid Aradi, spoke with Philip Moore from Emerging Markets regarding his views on the emergence of Dubai as a global Islamic finance center. In a wide-ranging discussion, Aradi explained the competitive factors that Dubai has going for it as well as highlights the negative impact skills shortages and gaps may have on the evolution of the industry in the UAE.

Tahseen Consulting’s research on labor market requirements in the UAE’s Islamic finance sector was cited in the New York Times’ article Dubai Seeks to Become Islamic Economic Hub.

Last year we projected that another $87 to $124 billion could potentially enter the Islamic banking system in the UAE by 2015 which will create approximately 7,800 new jobs at Islamic banks in the UAE. By 2015, the UAE’s Islamic financial services sector will likely double in size from approximately 10,000 employees currently to 20,000.

You can view the original blog post here

Tahseen Consulting’s Research on the UAE’s Islamic Finance Workforce Featured in the New York Times

Tahseen Consulting’s research on labor market requirements in the UAE’s Islamic finance sector was cited again in the New York Times’ article Dubai Seeks to Become Islamic Economic Hub.

Tahseen Consulting’s research on labor market requirements in the UAE’s Islamic finance sector was cited again in the Gulf News’ article Islamic Finance Talent Gap to Reach 8,000 Plus.

Last year we projected that another $87 to $124 billion could potentially enter the Islamic banking system in the UAE by 2015 which will create approximately 7,800 new jobs at Islamic banks in the UAE. By 2015, the UAE’s Islamic financial services sector will likely double in size from approximately 10,000 employees currently to 20,000.

You can view the original blog post here

Tahseen Consulting’s work on identifying skills shortages in the Islamic finance sector in the UAE has been frequently cited by the media and in the run up to the Global Islamic Economy Summit

Tahseen Consulting’s work on identifying skills shortages in the Islamic finance sector in the UAE has been frequently cited by the media and in the run up to the Global Islamic Economy Summit

In January 2013, we highlighted the issue of skills shortages and gaps potentially limiting the ambitions of aspiring Islamic finance hubs in the Arab World. A key challenge that all aspiring Islamic finance hubs face is developing a banking workforce with Sharia knowledge, the ability to clearly explain Islamic banking products, and the ability to contribute to product development. Without these competencies staff in Islamic financial institutions have difficulties explaining products to customers and are unable to contribute to product innovation. In the run up to the recent Global Islamic Economy Summit in Dubai, our research on skills needs required by emerging Islamic financial hubs was cited in by several news outlets and institutions in the GCC.

glufnewscoverage.fw

gcficoverage.fw

dkvcoverage.fw

7daysarticle coverage.fw

View Our Other Work on Islamic Finance and Banking in the Arab World

In our blog post Skills Shortages and Gaps May Limit the UAE’s Islamic Finance Hub ambitions (http://tahseen.ae/blog/?p=597), we highlight that the UAE, for example, faces tremendous skills shortages in forging a vibrant Islamic finance industry.

In our blog post Tahseen Consulting’s CEO Sees Strong Growth Potential for Local Banks in the UAE (http://tahseen.ae/blog/?p=735), Walid Aradi outlines why local banks have been gaining market share from international competitors in the UAE

In our blog post Tahseen Consulting Analysis Cited by Abu Dhabi Council for Economic Development in its Analysis on the Growth of Islamic Finance in the UAE (http://tahseen.ae/blog/?p=694), Tahseen Consulting’s Wes Schwalje comments of on the growth of Islamic finance in Abu Dhabi

Last week the UAE joined the growing list of global financial hubs which aspire to also become Islamic finance hubs. The list includes countries such as Thailand, UK, Singapore, Hong Kong, India, France, Canada, Japan, India, China, Nigeria, Malaysia, and Bahrain. Despite their aspirations, many of these countries lack the critical financial sector standards and human resources to offer substantial sharia compliant banking and financial services.

Our study of Islamic financial hubs reveals several common structural approaches pursued by Islamic banking leaders:

  • Dual Banking Systems: The most successful Islamic banking hubs operate a full-fledged Islamic banking system in parallel with a full-fledged conventional system complete with liberalization measures that also allow foreign banks to operate
  • A Step-by-step Approach: Successful Islamic banking hubs have an overall long term strategy to develop a large number of instruments; a large number of institutions; and an Islamic interbank market
  • Comprehensive Legislation: Successful Islamic banking hubs pass comprehensive Islamic banking legislation and typically have a common Sharia Supervising Council for all Islamic banks
  • A Practical, Open-minded Approach: To complement education and training of potential employees entering the Islamic financial services sector, Islamic banking hubs employ research-based approaches and product experimentation to serve local needs and ensure innovation
  • Participation in Forming International Standards: Several Islamic banking hubs have established bodies to internationalize Islamic banking standards which are  involved in regulating the global industry and establishing standards involved in furthering Islamic finance training and education

As shown in the figure below, these structural approaches to forming an world-class Islamic banking system are underpinned by sound financial systems rooted in internationally accepted economic, financial, and statistical standards.

Islamic banking and financial systems

Establishing a sound financial system and Islamic banking sector requires adoption of internationally accepted economic, financial, and statistical standards

Human Resources Frequently Limit Ambitions of Aspiring Islamic Finance Hubs

Based on our projections that a another $87 to $124 billion could potentially enter the Islamic banking system in the UAE by 2015, approximately 7,800 new jobs will be created at Islamic banks in the UAE assuming current asset concentration ratios remain similar. We also project another 500 jobs will be created by 2015 in other Islamic financial services segments. By 2015, the Islamic financial services sector will double in size from approximately 10,000 employees currently to 20,000.

Established 2011 Total Assets in $Current Number of EmployeesProjected Number of New Employees Needed by 2015
Total$69,000,947,4116,2377,864
Dubai Islamic bank1975$24,683,505,1772,0002,522
Sharjah Islamic bank 1976$4,831,918,801412519
Abu Dhabi Islamic bank 1997$20,245,231,6081,2001,513
Emirates Islamic bank (merged with Dubai Bank)2004$5,853,895,0951,0971,383
Noor Islamic bank 2007$4,598,651,499650820
Al Hilal Islamic bank2008$7,697,841,417702885
Ajman Islamic bank2008$1,089,903,815
176222
Number of employees in the Islamic banking sector in the UAE

By 2015, the Islamic financial services sector will double in size from approximately 10,000 employees currently to 20,000.

To meet this growing demand for employees trained in Islamic finance, the UAE will need to significantly broaden its education and training options to ensure availability of human capital does not stall the growth of the sector. While it has a number of current executive training institutions and higher education institutions that target mid-level employees in the Islamic finance sector, the UAE does not have any programs that target new entrants interested in the field or senior level leaders. The UAE also does not have institutions which provide research and analysis that advances the field. The experiences of Bahrain and Malaysia show that research capabilities and institutions have been key structural feature of Islamic banking systems that lead to product innovation and effective regulation. Furthermore, many of the masters programs in Islamic banking and finance in the UAE remain general MBAs or masters degrees with very few specialized courses related to practical aspects of Islamic banking that are required by employers. The exceptions are Zayed University and Hamdan Bin Mohammed e-University which have in-depth course offerings in Islamic finance and economics.

Tahseen Consulting’s Related Work

Read about Tahseen Consulting’s work on skills gaps and how they impact Arab businesses

Islamic Banking Training in the UAE

While it has a number of current executive training institutions and higher education institutions that target mid-level employees in the Islamic finance sector, the UAE does not have any programs that target new entrants interested in the field or senior level leaders.

Malaysia's Islamic Banking Education and Training System

Malaysia’s human capital development programs span all levels of the industry with a focus on internationalizing operational and product standards.

Towards a Islamic Finance Human Capital Development Strategy for the UAE

To solidify its position as an Islamic finance hub amongst the heavy competition, the UAE will need to significantly enhance its current education and training system. This includes human capital development and research programs to ensure:

  • Quantitative supply of Islamic banking graduates through expanded undergraduate offerings or financial sector bridge programs that target non finance graduates
  • High quality executive training focused on resolving likely skills gaps amongst current employees
  • Specific executive training and leadership development training for senior level bank leaders and regulators to create the necessary vision and Sharia knowledge to enable product innovation
  • High quality research and thought leadership that pushes the boundaries of the sector and allows the UAE to participate in the internationalization of operational and product standards which is currently being led by competing Islamic financial hubs