The results are in, and once again Islamic Finance
news leverages its unrivalled industry network to bring you the best in sector provider performance over the past 12 months: as voted for by a comprehensive cross-section of peers, experts and industry leaders from across the globe.
Throughout the month of July, IFN conducted its 10th annual IFN Service Providers Poll amongst its readers. An exceptional 6,070 votes were cast, with 1,466 being eliminated due to irregularities: leaving a record-breaking 4,606 votes counting towards the final results. This outstanding result continues a trend that has seen participation levels in the IFN Service Providers Poll increase exponentially since its inception a decade ago: with this year’s valid votes representing a 60% increase on last year’s results.
Recognized as the industry’s leading poll, the IFN Service Providers Poll prides itself on being the only comprehensive and unbiased guide to the leading supporting providers to the Islamic financial services industry: as voted by the readers. For the first time this year, we are also announcing second and third places along with the percentage of votes, in order to provide greater clarity.
This year saw strength in numbers, as the previous winner’s in seven out of the 10 categories once again took home the prize: demonstrating a trend in 2014 towards consolidation and stability rather than innovation and exploration. However, while the results may showcase a range of familiar faces, their achievements are anything but ordinary: and the success of many of our winners over multiple consecutive years highlights the exceptional leadership, support and strength which has done so much to develop and drive forward the Islamic finance industry through a turbulent and volatile economic and geopolitical landscape. In addition, the high number of nominations for multiple categories emphasizes the increasing breadth and depth of Islamic finance, with an ever-widening pool of providers emerging to push the current leaders forward and a consistent atmosphere of competition ensuring an absence of complacency.
* = 2013 winner
Setting the standard
Once again the Bahrain-based Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI) won the category of ‘Most Outstanding Standard Setting Body’; taking the top spot for the fourth consecutive year by a comfortable margin. In 2014 AAOIFI extended its lead over rivals IFSB and International Islamic Financial Market (IIFM), which last year took the same places but in a somewhat closer race.
While the runners up occupy invaluable positions in the industry, participants in the Poll continue to support AAOIFI’s respected leadership in the role of standard setter and industry arbiter: which as the sector grows both in depth and geographical spread is becoming more important than ever. With a new secretary-general in the process of being elected following the departure of Dr Khaled Al-Fakih this year, we can look forward with interest to a new direction for the agency in the months to come.
“AAOIFI is committed to discharging our responsibilities in developing and issuing high-quality standards. In order to support the growth of the international Islamic finance industry, the standards development process must be robust and accompanied by effective consultation with the industry and the esteemed Shariah scholars,” said Shaikh Ebrahim Bin Khalifa Al Khalifa, the chairman of the board of trustees for AAOIFI, regarding the change of leadership. During the transition period until the appointment of a new secretary-general, AAOIFI’s activities and operations will be overseen by Khairul Nizam, current deputy secretary-general.
Consulting the best
Building on a lengthy winning streak, Dar Al Sharia won the category of ‘Best Islamic Consultancy Firm’ for the fifth consecutive year. Established in 2007 as a subsidiary of Dubai Islamic Bank, Dar Al Sharia has built a sterling reputation as one of the sector’s most valued advisory and consultancy firms and a leading global provider of Shariah compliant solutions.
The award for Best Islamic Consultancy Firm, while dominated by Dar Al Sharia, has seen competition increase rapidly over the past few years: with the growing number of nominations standing testament to the increasing demand for innovative and flexible Islamic solutions as the sector develops in sophistication. This year 19 organizations were nominated, with a close contest seeing Dar Al Sharia once again pull ahead of last year’s runner’s up, Amanie Advisors.
In one of the most fiercely contested categories of the competition, Etiqa Takaful beat a record 80 nominated firms to win the category of ‘Best Takaful Provider’ for the third consecutive year. Edging out over Prudential BSN Takaful by just 3% of the vote and narrowly beating last year’s runner up Abu Dhabi National Takaful Company, Etiqa Takaful demonstrated not only its own domestic strength but also the exceptional potential and growth within the increasingly competitive global Takaful industry.
The firm distinguishes itself through its ‘Etiqa Way’ brand, which permeates its work culture and customer service and focuses on a simplified, streamlined and service-based approach. “This award is the result of all our combined effort and is a strong testimony of Etiqa Takaful’s leadership position in the Takaful industry,” commented CEO Ahmad Rizlan Azman. “Winning this award for the third consecutive year is definitely a huge success for us, and it further drives us to work towards maintaining our title. Even though we are ranked No. 1 in the Takaful business in Malaysia, we are grounded by the core of the Etiqa brand, which is humanizing insurance and Takaful, where we believe in placing people over policies.”
In one of the few new moves in this year’s contest, Swiss Re Retakaful won the category of ‘Best Re-Takaful Provider’ for the very first time. However, the firm is no stranger to success, having come in second place in 2013 to this year’s runner up, Takaful Re, in close contest. This year was another photo finish, with just 2% separating the leaders and sector stalwart Saudi Reinurance Company yet again putting in another strong performance to finish third. Although not as open a field as the Takaful provider category it is notable this year that with 18 companies nominated, the reTakaful space is growing apace in both provision and competition.
“We are very happy to receive this prestigious award,” confirmed Marcel Papp, the head of Swiss Re ReTakaful. “It shows that our clients appreciate the efforts Swiss Re and its reTakaful team have put in in the past five years since the establishment of the reTakaful office in Kuala Lumpur. This award will give us even more motivation to continue working together with our Takaful clients to grow the Islamic finance industry further.”
From new face to old favorite: in 2014 the category of ‘Best Islamic Index Provider’ was yet again won by S&P Dow Jones Indices – for an impressive eighth consecutive year. With one of the biggest margins in the contest, S&P Dow Jones took over half the votes to storm home in a resounding victory. Of the rest of the field, MSCI again took second place, extending its lead over 2013’s third runner up, Russell-IdealRatings – two providers that joined forces in March of last year. These top three players dominate the sector: between them accounting for 99% of total votes despite a field of eight nominated firms.
Alka Banerjee, the managing director of strategy and global equity indices at S&P Dow Jones Indices, commented that: “S&P Dow Jones Indices is proud to have won the ‘Best Islamic Index Provider’… which recognizes our leadership position and dedication in this area. Islamic finance is a dynamic and promising segment in the global financial market.” She also confirmed that: “We are committed to continuously providing high quality and innovative Islamic and Shariah indices that bring greater transparency and accessibility to the investment community.”
However, despite the dominance of S&P Dow Jones, the Islamic index landscape has seen some significant shifts in recent months that suggest that next year might see a shake-up in the sector. In June of this year the London Stock Exchange Group’s FTSE Indexes partnered with Russell Investments index business to create the third-largest global index provider in terms of exchange-traded assets under management. With a combined global ETF AUM of US$339 billion as of April 2014, the new entity comes just behind MSCI (US$356 billion) and draws closer to S&P Dow Jones (US$705 billion). With Russell’s strength in the US market opening new horizons for the combined FTSE/Russell/IdealRatings Islamic index families, the consolidation in the sector could see an eventual challenge to the ongoing dominance of the current index giant.
Platform for success
Another service provider stalwart, DDCAP in 2014 won the category of ‘Best Interbroker for Islamic transactions’ for the fifth consecutive year, marking its continued dominance in the brokerage space. Managing director Stella Cox however highlighted the keen competition in the sector, noting that: “Given that they are industry voted, IFN‘s awards are of significant market relevance. The original shortlist demonstrated that DDCAP operates within a highly competitive market segment, where wholesale clients rightly have access to the service they require from a geographically diverse and proficient group of providers. We are hugely appreciative that our customers elect to work with us, many having done so for over 15 years, and we offer our sincere thanks to all those who voted for us in this year’s Poll.”
While the top three faces are all familiar, this year saw a switch around as Malaysian Bursa Suq Al-Sila slid past the UK’s Eiger Trading to take second place. While the total field numbered seven nominations, the top three contestants took almost two thirds of the vote this year, demonstrating their continued dominance of the global Islamic brokerage market.
Making the grade
Standard & Poor’s also won the category of ‘Best Islamic Rating Agency’ for the third consecutive year, building on its 2013 success and extending its lead to an impressive 40% of the total vote.
“S&P is delighted to win the award for Best Islamic Ratings Agency”, said Stuart Anderson, Managing Director & Regional Head Middle East at Standard & Poor’s Ratings Services. “This is the fourth time that S&P has won this award, acknowledging our team’s deep understanding of and commitment to the Islamic finance industry.”
The IIRA continues to beat major players including Moody’s (third runner up) and Fitch Ratings as well as domestic players including RAM and the Malaysian Rating Corporation, suggesting a continued concern and demand by industry players for a Shariah-specific focus in their ratings provision. With the top three firms taking almost 80% of the vote out of a field of eight, it is clear that especially for the two leaders; the market remains very happy with their performance.
In a category that has seen the winner swing back and forth between the top players in a compelling contest; this year the International Shariah Research Academy for Islamic Finance (ISRA) yet again reclaimed the category of ‘Best Islamic Research Firm’ from last year’s winners KFH Research – a firm who itself took the prize from ISRA following its 2012 win. However, in a surprise turn given the photo finish of last year’s competition, this year ISRA pulled ahead to cement its lead beyond a doubt: taking almost two thirds of the vote compared to 27% for KFH Research and just 9% for the third runner up, Gulf Investment House.
Dr Mohamad Akram Laldin, executive director, commented that: “We at ISRA are very proud of this recognition and would like to take the opportunity to thank all who have supported us in our research and consultancy work. We also thank Bank Negara Malaysia for their endless support.”
Advising the industry
In another category that is continuously closely contested, Amanie Advisors won the category of ‘Best Shariah Advisory Firm’ for the first time, taking the top spot away from former winners Dar Al Sharia. “Personally, and on behalf of my colleagues, we are very pleased to be voted by our peers, clients and friends around the world as the IFN Best Shariah Advisory Firm 2014,” commented Dr Daud Bakar, CEO of Amanie Advisors. “As a global company we aim to contribute much more in the future, particularly within the new emerging markets for Islamic finance.”
Amanie has been creeping up for the last several years, closing the gap further in each consecutive poll, culminating in its 2014 win. However with just 2% between the two leaders and Islamic Finance Advisory & Assurance Services (IFAAS) coming a very close third with 17% of the vote, the advisory field is still highly competitive, especially on a geographical basis: with Malaysia-based Amanie spreading its international wings in recent years while Dar Al Shariah continues to dominate in the Gulf and UK-based IFAAS building on its surprise third place last year to close the gap between the leaders with expansion into Europe, Africa and the Middle East. However, with a total of 14 nominations in the category and the three leaders taking 61% of the vote, we can perhaps expect increased competition to push next year’s contest even further.
Rounding off our Service Providers Poll as always, is the category upon which the execution and operations of the industry depend and, although often unsung, without which Islamic finance could not exist. And yet again, for the seventh year in a row, Path Solutions took home the prize for ‘Best Islamic Technology Provider’, exceeding its closest competitor Oracle FSS by a 10% margin.
Mohammed Kateeb, group chairman & CEO of Path Solutions, commented that: “We are honored to be acknowledged by IFN readers. This award is a reflection of our commitment to the global Islamic finance industry; having played a pivotal role in developing cutting-edge and innovative Shariah-compliant software solutions that still lead the way in this growing sector.”
Despite the continued dominance of the winner however, the top three firms this year captured just over a third of the total votes in a field that comprised 31 competitors – as the technological race continues to exceed itself and the contest grows ever fiercer.
Congratulations to all
The fierce competition and fast-growing field of nominations in this year’s Poll stands testament to the growing sophistication and spread of the Islamic finance industry, and the increasing power and influence which its players wield in the wider financial markets. The feedback this year was once again extraordinary, and IFN are humbled by the exceptional response and overwhelming support from across the globe. We are proud and delighted to be able to represent the voices of the industry, and to provide a channel through which participants can recognize, reward and review performance over the past year through an unequaled audience of peers.
We would like to congratulate all winners and nominees for their outstanding achievements, and thank all our voters for taking part. We look forward with anticipation to next year’s contest. — LM