Iqbal Khan, CEO of Fajr Capital and the 2012 recipient of the Royal Award for Islamic Finance, shares his thoughts on Islamic finance leaderships and the state of play of the global Shariah finance industry.
Islamic finance leadership
• It is important for aspiring leaders and Islamic finance professionals to:
1. Stay steadfast and committed
“When you are building a business based on the real economy to create value to society, you are already on a winning proposition.”
2. Continue to work on enabling both the macro and micro environments
Malaysia is a great example whereby every government in power has been committed to Islamic finance
3. Building robust institutions
“When you build institutions, you must focus on building people — if you have competence and integrity in management, you will get amazing results.”
The Islamic finance industry: Past, present, future
• When the industry started, the founders have two major concerns: should they wait for the perfect regulatory infrastructure or launch the industry first with a framework that would be a work-in-progress? They chose the latter.
• The Islamic banking and asset management industry should always be about equity and risk-sharing, although in practice, this isn’t always the case.
• The current banking model is broken as Islamic finance has grown in the shadows of the conventional industry and as a result, has made significant compromises and lost its authenticity, integrity and impact; however, it has given Islamic finance mainstream relevance in terms of global footprint and coverage.
• The most powerful model for the Islamic finance sector is the consumer-to-business model; in order for the industry to move forward, we need to reach the ‘tipping point’ as expounded by Malcolm Gladwell in his book, ‘The Tipping Point: How little things can make a big difference’.
• Asset management is the future of the Islamic finance industry.
• “What we are missing are authenticity and goodness (financing for good); so it is about converging with ethical finance and shifting toward a cooperative model for banking, Takaful and asset management.”