Now well into its second decade, the IFN Service Providers Poll is unique to the industry in its recognition of the vital elements that underpin the wider system. While the banks, the law firms and the investment funds represent the outward face of the Islamic financial markets, it is the service providers who support operations, facilitate transactions, set the standards and rate the results. Without these crucial cogs, the Islamic finance wheel would cease to turn. So, for the 14th year running, we are delighted to present to you the winners of our annual IFN Service Providers Poll — chosen by the industry, for the industry.
As the only comprehensive and unbiased guide to the top providers to the Islamic financial services industry, the Poll is designed to shine a light on corners of the market that are sometimes left uncelebrated. Yet, as the record number of votes this year shows, their services are far from unappreciated. Over nine categories (excluding the previously contested Takaful and re-Takaful class, which will be referenced in a separate context), the survey represents an invaluable overview of the industry, its current health and the perspective of its leading practitioners.
Most Outstanding Standard-Setting Body
Despite being the most hotly contested category of the survey with the most votes received (13% of the total) by a considerable margin, the best standard-setting body of 2019 brings no surprises. For the ninth year in a row, AAOIFI took home the crown: followed (as in the previous two years) by the Malaysia-based IFSB and Bahrain’s International Islamic Financial Markets (IIFM).
Established in 1991 and based in Bahrain, AAOIFI is a leading international not-for-profit organization working toward the development and issuance of standards for the global Islamic finance industry. It is supported by over 200 institutional members in over 45 countries: including central banks and regulatory authorities, financial institutions, accounting and auditing firms and legal firms, and its standards are followed in numerous jurisdictions as a legal requirement or as guidelines by leading Islamic financial institutions across the world.
AAOIFI is a pioneer for the progressive harmonization of international Islamic finance practices, and 2019 was a landmark year for the organization. In January, it issued long-awaited new standards for Sukuk governance and disclosures, as well as financial reporting for Sukukholders. In the same month, it partnered with the IIFM in a joint venture to strengthen the Islamic finance industry, and in April the group appointed Omar Mustafa Ansari as its new secretary-general, following the departure of the long-serving Hamed Hassan Merah back in 2018. In May, the board approved a new standard on Shariah compliance and fiduciary ratings for Islamic financial institutions, while in August it issued a code of ethics for Islamic finance professionals and in October the board held its 15th meeting and approved the draft of the ‘First-time adoption of AAOFI financial accounting standards’.
Best Islamic Consultancy Firm
The consultancy category, which received the third-highest number of votes this year, threw more of a curve ball. Taking the prize from long-standing incumbent Dar Al Sharia, 2019 saw ISRA Consultancy, the consulting arm of Malaysia-based International Shari’ah Research Academy for Islamic Finance (ISRA) win the honors.
Headed by CEO Ashraf Hashim, ISRA Consultancy has leveraged its position as an affiliate of Malaysia’s central bank to build a strong network both locally and globally — aided by its strategic alliance with partner institutions the International Center for Education in Islamic Finance and the Islamic Banking and Finance Institute Malaysia (IBFIM). The firm has also taken a popular stand over fee transparency, offering upfront and pre-agreed fees for its services, which has clearly proven popular with its clients.
Best Shariah Advisory Firm
While Dar Al Sharia may have lost out to ISRA in the consultancy category, the industry stalwart reasserted its dominance in the advisory stakes, coming in at number one followed by Amanie Advisors in second place and Bahrain’s Shariyah Review Bureau in third place. Since the departure of long-standing CEO Sohail Zubairi back in 2017, Dar Al Sharia has not rested on its laurels, but thrown itself into active advisory roles across the Islamic world as well as creating new partnerships — such as its September 2018 joint venture with the Saudi-based Islamic Research and Training Institute (IRTI) to promote and develop new Islamic financial solutions including structuring and developing new products, undertaking research and capacity-building, as well as developing Shariah governance for Islamic financial institutions and other relevant stakeholders.
Best Islamic Research Firm
The field of Islamic finance research is both esoteric and highly academic — yet perhaps unlike the conventional industry, it is integral to and inseparable from the principles, ethics, operation and activities of faith-based banking activities. While the past two years have seen ISRA take top billing and its close competitor IRTI come in second with Pakistan’s Center for Excellence in Islamic Finance third, this year changed the lanes. Malaysia’s Institute of Islamic Banking and Finance at the International Islamic University Malaysia (IIUM) came in first, knocking ISRA into second place and pushing IRTI down into third.
Best Islamic Index Provider
It will come as no shock that the dominant S&P Dow Jones once again came top in the index provider category — continuing its record-breaking run of success for the 13th year in a row. The provider has pioneered Shariah compliant indices across the full board of its offerings — and to good effect, with its Shariah compliant family outperforming their conventional peers by around 2% in the first half of 2019 (according to July 2019 data).
Best Rating Agency in Islamic Finance
Once again S&P Global Ratings took home the crown, following on from its 2018 success and knocking 2017 winner Moody’s Investors Service off the top spot. Malaysia’s RAM Ratings once again came third.
Led by Global Head of Islamic finance Dr Mohamed Damak, S&P Global Ratings has gained a reputation for telling it how it is — with pragmatic and realistic outlooks that do not sugarcoat obstacles or inflate growth prospects. At its annual Islamic finance roundtable in September, the agency highlighted three factors that could boost the industry back into double-digit growth for 2020: inclusive standardization (a flagship issue for Dr Mohamed, as industry observers may be aware), fintech and environmental, social and governance opportunities.
Best Interbroker for Islamic Transactions
Back on top for the third year running, DDCAP kept the crown as best broker, beating long-term rival Bursa Suq Al-Sila’ back down into second place once more, and with Eiger Trading Advisors coming third.
DDCAP has bet heavily on technology in recent years and it seems to be paying off, with the success of its bespoke real-time trading platform ETHOS as well as its recent partnership with Refinitiv to provide a fully integrated treasury trading workflow for Shariah compliant transactions.
The group has also pioneered ethical practice, and in 2016 became one of the first Islamic financial sector signatories to join the UN Principles for Responsible Investment. In 2019, DDCAP opened its first Asian office in Malaysia, with plans to expand further into the ASEAN market, including Indonesia, Singapore and Brunei.
Best Islamic Technology Provider
In the technology category, Path Solutions was crowned the winner for the 12th consecutive year, cementing what seems like unassailable dominance over the sector.
Path has captured high-profile new business across the globe this year, with new clients including Jaiz Bank in Nigeria, which upgraded its Islamic core banking platform iMAL in April; Boubyan Bank in Kuwait, which did the same in February; and Ameen Al-Iraq Islamic Bank, which selected Path to power its new digital bank back in September 2018.
Best Stock Exchange for Islamic Listings
Finally, and in one of the most ferociously fought categories of the year, Bursa Malaysia yet again took home the prize of Best Stock Exchange for Islamic Listings, in only the second year after the category was introduced back in 2018.
Facing serious competition from around the world however, the contest was closely fought — and while 2018 saw Pakistan Stock Exchange take second place and Dubai Financial Market come in third, 2019 shook things up once again with London Stock Exchange grabbing the title of runner-up and Saudi’s Tadawul coming third — both exchanges that have made substantial efforts over the past year to boost their profile, attract issuance and appeal to international investors.
Admirable though these actions are however, they were not enough to win out against the giant of them all, the Malaysian bourse. The world’s first end-to-end Shariah compliant investing platform, Bursa Malaysia boasted 680 Shariah compliant companies as of December 2018 — over three-quarters (76.4%) of its total universe. The exchange had a market capitalization of RM1.67 trillion (US$398.14 billion) as of September 2019.
As always, IFN would like to extend our warmest congratulations to all participants in this year’s IFN Service Providers Poll, as well as our heartfelt thanks to the voters who make the IFN Service Providers Poll such a unique and reliable benchmark for market performance.
|Table 1: IFN Service Providers Poll 2019 Results|
|Most Outstanding Standard-Setting Body||AAOIFI||IFSB||International Islamic Financial Markets|
|Best Islamic Consultancy Firm||ISRA Consultancy||Amanie Advisors||Islamic Banking and Finance Institute Malaysia|
|Best Shariah Advisory Firm||Dar Al Sharia||Amanie Advisors||Shariyah Review Bureau|
|Best Islamic Research Firm||IIUM Institute of Islamic Banking and Finance||International Shari’ah Research Academy for Islamic Finance||Islamic Research and Training Institute|
|Best Islamic Index Provider||S&P Dow Jones||MSCI||FTSE Russell|
|Best Rating Agency in Islamic Finance||S&P Global Ratings||Moody’s Investors Service||RAM Ratings|
|Best Interbroker for Islamic Transactions||DDCAP||Bursa Suq Al-Sila’||Eiger Trading Advisors|
|Best Islamic Technology Provider||Path Solutions||International Turnkey Systems||Oracle FSS|
|Best Stock Exchange for Islamic Listings||Bursa Malaysia||London Stock Exchange||Tadawul|