In the latest IFN Podcast, Daud Vicary Abdullah tells VINEETA TAN that more Islamic finance students are looking for a career outside the conventional confines of Islamic financial institutions, gravitating toward non-traditional avenues to deliver greater impact using Shariah concepts of finance, and this is triggering a paradigm shift in the ways Islamic finance courses are being structured and delivered.
“The thing that has struck me most when I first joined INCEIF six years ago, a vast majority of our students were looking to INCEIF and myself to help them look for a job within the Islamic finance industry; however, that has changed,” Daud Vicary Abdullah, the former president and CEO of International Center for Education in Islamic Finance (INCEIF), shared. “The vast majority of our students are no longer looking for a job within the industry and that is, I think, down to the global financial crisis and the lack of credibility of banking as a whole — not with Islamic finance in particular, but its association with banking.”
Parallel to this is the growth of SMEs and entrepreneurship, says Daud. “Many of them want to use Islamic finance to make an impact quickly, so they get into crowdfunding, into fintech, into organizations they can advise such as boutique consulting firms.”
This shift has prompted INCEIF — the only dedicated Islamic finance graduate school in the world — to rethink and redesign its curriculum where engagement with students and the business community is central.
“Part of our curriculum is not about Islamic finance but about ethics and governance and softer skills. We are moving toward action learning where students go out and solve problems,” said Daud, adding that the university is still at the early stages in enhancing its modules. “It is not just about jobs in Islamic financial institutions that is still important, but it is also how we apply Islamic finance.”
This change in mindset brought by a new generation of potential Islamic finance professionals is one part of the evolution the Shariah finance industry has experienced since its early days and as the industry progresses, new questions emerge.
Take Malaysia for example, where 28% of its banking market is now Islamic and the country looks on track to reaching its 40% target by 2020.
“What happens when the retail market, which is the bulk, get to 40% or more? That means you are reaching a tipping point where monetary and fiscal policies have to adapt to the new majority, and that new majority does not sit easily within the confines of the Basel Committee of the Bank of International Settlements,” Daud explains.
While this is likely to present a potential hurdle for Islamic finance in Malaysia, but it also presents an opportunity.
“Malaysia has the opportunity to be brave enough to change the playing field: to change the regulations, to change its views on fiscal and monetary policies and to set an example to the rest of the world that it can be done better,” affirms Daud.
This is an excerpt from a Special Podcast Edition with industry veteran Daud Vicary Abdullah exploring how the industry has evolved over the last few decades. To listen to the full conversation, log on to IFN Podcasts.