Islamic finance education is an essential component of the Islamic finance ecosystem. Meanwhile, Islamic economics emerged after World War 2, the period when independent Muslim states appeared on the world map and Islamic finance started its development in the form of social banking, as with the case of Mit Ghamr in Egypt in the 1960s and Lembaga Tabung Haji in Malaysia in 1963. The International Conference on Islamic Economics held in Mecca in 1976 is accepted as the birth of Islamic economics as an independent discipline. The teaching of Islamic finance started later in the1990s, following the arrival of Islamic banking, and focused on the doctrinal debates on Riba. As at the end of 2017, the Islamic financial sector consists of approximately 1,400 financial institutions and almost 700 education providers from 76 countries worldwide.
Review of 2020
COVID-19 resulted in destruction in almost every sector. One of the sectors most affected is unquestionably the education sector. For the first time in the history of education, the entire system experienced the migration from traditional, face-to-face teaching to online education. Policymakers, management, lecturers, students and parents had to adjust themselves to the new normal.
To measure the impact of COVID-19 on Islamic finance education, we conducted an online survey with the participation of 150 Islamic finance educators from 12 jurisdictions. Our findings suggest that during this challenging time, 77% of educators found it challenging to balance their personal and professional life, and 80% experienced a significant increase in anxiety. To the question “I have experienced online teaching for the first time after the outbreak of COVID-19”, 67% of participants replied ‘Yes’ (Chart 1). Consequently, 70% found preparation for online lectures to be more time-consuming.
Forced online education requires information technology (IT)-related skills such as familiarity with the use of online teaching platforms. Before COVID-19, 23% of Islamic economics and finance (IEF) educators never used any of those platforms (Chart 2a). However, with the outbreak of the pandemic, all respondents got familiar with at least one or even more platforms. Zoom with 43.57% appeared to be the most popular and widely used online teaching platform (Chart 2b).
In general, for lecturers, limited interaction among students, lack of motivation and technical problems appeared to be the main issues during the ‘new normal’. However, despite the entire challenging environment, findings show that 90% of academic institutions proved to be successful in providing the necessary infrastructure and materials for online teaching.
Preview of 2021
COVID-19 will expedite the adoption of artificial intelligence in the banking sector. In the ‘new normal’, even less technology-friendly customers who prefer over-the-counter services will have no option but to use mobile banking. This means that fewer frontline employees in the banking sector would be employed in the future. However, the need for employees with IT and programming language skills will soar. Accordingly, 86% of IEF educators unanimously agreed that IT-related courses should be in the IEF curriculum (Chart 3).
COVID-19 also highlighted that understanding the psychology of investors and customers plays a crucial role in predicting the market. Therefore, another emerging discipline which needs to be taught is behavioral finance. Behavioral finance studies the influence of psychology on the financial behavior of individuals, and focuses on the fact that investors are not always rational, have limits to their self-control and are influenced by their own biases. For this reason, students who want to be employed or employers who wish to maintain competency in the Islamic finance sector need to invest their time and resources to amass the aforementioned expertise.
The current pandemic is much more than a health crisis; it is also an unprecedented socioeconomic crisis. Stressing each of the countries it touches, it has the potential to create devastating social, economic and political effects that will leave deep and long-standing scars. The pandemic disrupted many sectors, and education is one of them.
There is no doubt that online learning experiences issues when conducted for the first time and will not be as effective as physical classes; however, alternative and aided technology certainly has filled the vacuum, otherwise the learning process would have altogether stopped. Secondly, the human psyche takes time to adapt to change, so adjusting technology-aided learning will undoubtedly take time to make it more useful and convenient for all to adopt.
Dr Kamola Bayram is an assistant professor at KTO Karatay University, Turkey as well as a project consultant and advisor for project management at the International Council of Islamic Finance Educators. She can be contacted at [email protected]