IFN is proud to bring you the results of the 11th annual IFN Service Providers Poll, honoring the best and brightest of the silent stars supporting the industry through all its ups and downs over the last 12 months. From consultancies to rating agencies, tech firms to standard setters, the Islamic finance industry is made up of more than its parts and every cog in the wheel plays a vital role in ensuring its success.
The IFN Service Providers Poll, now in its 11th year, is recognized beyond dispute as the leading awards of the industry, and prides itself on being the only comprehensive, independent and unbiased guide to the leading players supporting the Islamic financial services sector. Once again this year we received an exceptional response, highlighting the importance of these players to the ongoing functionality of our business.
Due to the niche nature of the industry, it is inevitable that many familiar faces return year after year — but this only emphasizes their success in reincarnating themselves and innovating their services to ensure they remain relevant in a constantly evolving industry. This year we also see some new players rise to the top, marking the growth and progress of a sector that has taken significant strides over the last 12 months amid tough competition and challenging economic circumstances.
With faltering oil prices, volatile commodities, tightening credit conditions, tough lending criteria and political uncertainty sweeping the globe from east to west, 2016 has not been an easy year for anyone: and those who have succeeded deserve ample recognition for their solid performance amid tough times.
Read on to discover who climbed to the top of the pile this year — and how.
Setting the standard
The Bahrain-based AAOIFI yet again took the top spot for Most Outstanding Standard-Setting Body: winning the award for the sixth year in a row and comfortably controlling the proceedings with 45% of the vote. In a category always dominated by the three leading players, Malaysia’s IFSB closed the gap somewhat from last year, taking second place with 38% in a close-run race, while the International Islamic Financial Markets (IIFM) came third with 17%.
Established in 1991, AAOIFI is supported by over 200 institutional members from over 45 countries worldwide: including central banks and regulatory authorities, financial institutions, accounting and auditing firms and legal firms. It has issued over 95 standards in the areas of Shariah, accounting, auditing, ethics and governance for international Islamic finance.
The organization has had a busy year, forming a new Shariah board in early 2016 and holding its first meeting in March — the first major step in Shariah form since its last Shariah review six years ago. The group split its accounting and auditing board in two, creating a board solely focused on governance and ethics, in a bold move to focus on the importance of regulation and governance within the industry. The meeting led to the election of Shaikh Muhammad Taqi Usmani, a leading Shariah scholar and jurist, and chairman of the Shariah Board of the Central Bank of Pakistan, as AAOIFI chairman. The meeting also covered six new Shariah standard exposure drafts along with 11 new research studies and 13 reviews of existing standards and 19 standards currently under review, marking the thoroughness and vigor with which the organization approaches its duties.
AAOIFI launched an ambitious reform agenda at the end of 2015 which it has pursued with vigor over the last 12 months, including reviews of its Sukuk and capital market standards as well as a new standard on the sale of debt, as well as updating its accounting curriculum and reviewing up to 10 of its accounting standards. In 2015, the central banks of Morocco, Kazakhstan and Jordan joined its ranks, while in 2016 the agency welcomed the Capital Market of Authority of Saudi Arabia in what Secretary-General Dr Hamed Hassan Merah called: “A quantum leap for AAOIFI, taking into consideration the Kingdom’s central role at various levels. In AAOIFI, we are particularly keen to achieve higher degrees of harmonization and standardization in Islamic finance products and practices worldwide, and this would add to the industry’s transparency, reliability and credibility.”
Most recently, in October AAOIFI held its 45th meeting in which it adopted Shariah Standard No. 57 on Gold and its Trading Controls, which it developed in collaboration with the World Gold Council and which should open up a whole new realm of opportunities for the industry. Several further standards are expected by year end, including a new regulation covering Islamic credit cards and another standard looking at the liability of investment managers. A draft accounting standard on Murabahah is also expected by the end of 2016, with preliminary studies on Sukuk and Ijarah standards also underway.
Advising the industry
Standards are a key framework within which the industry must operate: but these cannot be applied or adhered to without the invaluable services provided by the stalwart leaders of the consulting and advisory field.
In the category for Best Islamic Consultancy Firm, Dar Al Sharia (a subsidiary of Dubai Islamic Bank) won yet again with 55% of the vote. In a slight shake-up, the Islamic Financial Advisory Services of Meezan Bank in Pakistan surged ahead to take second place for the first time with 24%, while Malaysia’s Amanie Advisors came third with 21%.
“It is a great honor to continue to enjoy the trust from the industry for the seventh year in a row,” commented Sohail Zubairi, CEO of Dar Al Sharia.
“They say it is easier to reach the top but difficult to maintain it. Dar Al Sharia retaining the top position in the IFN poll for the last seven years is attributed to sheer dedication by its team members to deliver high quality and authentic Islamic finance consultancy and advisory services to the clients on a consistent basis. I commend the IFN leadership and team for starting and maintaining the most transparent industry poll.”
In a double win, Dar Al Sharia also won Best Islamic Advisory Firm this year, taking a resounding 51% of the vote and winning the prize for the second year in a row. As one of the stalwarts of the Islamic financial services industry, the group is consistent in its robust and rigorous approach to Shariah advice, the value of which is reflected in its ongoing success and recognition from a highly competitive industry.
Always an exciting race, honorable mentions must also go to Amanie Advisors and again the Islamic Financial Advisory Services of Meezan Bank, which finished neck and neck with 25% and 24% respectively in one of the closest competitions of the year.
The Best Takaful Provider category is always one of the most closely-fought in the contest, and one which often throws up surprises — and 2016 was no exception. Last year’s winner, Prudential BSN Takaful, was nowhere to be seen; and instead Pakistan’s Pak Qatar Family & General Takaful surged ahead to take the crown. 2014 winner Etiqa Takaful took second place, while Abu Dhabi National Takaful Co came a respectable third.
One of the pioneers of Takaful in Pakistan, Pak Qatar Family & General Takaful (Pakistan) has had a strong year and is now present in every major city in the country with a strong expansion program to grow its branch network for both individual and corporate members. The group has created bancaTakaful relationships with a number of leading banks in Pakistan which has cemented its success, and been instrumental in bringing Islamic insurance solutions to the wider public. It has also collaborated with a number of industry players to develop awareness, including a strong relationship with the IBA Center of Excellence. In 2015, the group demonstrated its strength and success with the distribution of a 28% surplus among its individual Family Takaful participants, the eighth year that it achieved a surplus distribution and reflecting its strongly competitive performance throughout the year.
The award for Best re-Takaful Provider was another hotly contested category — but the clear winner was Dubai Islamic Insurance and Reinsurance (AMAN) (UAE), last year’s runner-up. 2015 winner MNRB ReTakaful of Malaysia took second place, while AIG Re-Takaful (Malaysia) came in third.
The re-Takaful award is always tightly contended, with a variety of strong players that make waves in the industry and compete closely for the top spot. AMAN has had an active year, cementing itself as one of the top players in the GCC with moves such as a collaboration with Emirates Islamic for auto Takaful and the adoption of the UAE national ID card as an alternative to its health insurance card.
It is reassuring to see that MNRB ReTakaful remains in the game, as the firm had a tough few years with losses in 2014 and a withdrawal of ratings from Fitch in 2015 followed by an internal restructuring exercise. In April 2016, MNRB Holdings was awarded a license in Malaysia to undertake General and Family re-Takaful after its restructuring, through a newly established re-Takaful division — replacing the former MNRB Retakaful unit, which will continue to manage its outstanding business portfolios. It is good to see that the group is now getting back on its feet.
Broking the deal
Once again and following on the heels of its resounding win in 2015, the Malaysian bourse’s commodity Murabahah, Bursa Suq al Sila’, raced into first place for Best Interbroker, with a resounding majority.
Overall, the Malaysian exchange has had an excellent year, with its best results since 2008 in the first half of 2016. Bursa Suq Al-Sila’ is a Shariah compliant commodity Murabahah trading platform which facilitates Murabahah and Tawarruq transactions. While the securities market, both regionally and globally, has seen a dampened year on the back of economic and political uncertainty, analysts note that Bursa has continued to see strong growth on the back of derivatives and fee income. For the first half of 2016, growth in derivatives (which makes up 19.3% of total revenue) grew by 20.8% (compared to a 5.1% year-on-year decline in securities trading revenue) while higher Bursa Suq al Sila’ and market data revenue helped drive growth in fee income.
“Bursa Suq Al-Sila’ (BSAS) is honored and proud to be recognized for two consecutive years as Best Interbroker for Islamic Transactions,” commented Jamaluddin Nor Mohamad, the director of Islamic capital markets at Bursa Malaysia. “The strong growth in BSAS trading was mainly driven by the adoption of [the] Islamic Financial Services Act (IFSA) in Malaysia and conversion of bank deposits from Mudarabah to Murabahah contracts, as well as the growing interest in tenor-based pricing. The stellar performance has been encouraging as we observe more interest coming from the MENA and Asia regions as the platform caters for the large-sized transactions, made possible by the availability of a large supply of physical commodities.”
Rating the industry
The contest for Best Islamic Rating Agency is always close, with the leading players fighting a tight battle while smaller regional competitors can often offer sterling competition. Excitingly in 2016, top Malaysian rating agency RAM Ratings took the top spot, beating off the bigger players with a resounding victory that won over two-thirds of the vote. Last year’s winner Moody’s Investors Service came second, while S&P Ratings took third place.
The win highlights the valuable role played by regional rating agencies in supporting, building and encouraging their local capital markets. RAM provides crucial and independent credit opinions that allow investors and market participants to make informed decisions that contribute materially to the growth and strength of the industry.
“RAM Ratings is honored and grateful for the market’s vote of confidence in recognizing our Sukuk rating and Islamic finance thought leadership,” said CEO Foo Su Yin of RAM Ratings. “We will continue to be a catalyst for Islamic finance development.”
Researching the way
In a relatively small category with just a few key players, the winner of the Best Islamic Research Firm has swung back and forth multiple times over the years. However, in 2016 the International Shari’ah Research Academy (ISRA) once again took the top spot — cementing on last year’s success and consolidating its leading position with almost three quarters of the vote. The Islamic Research and Training Institute (IRTI) came second, while Gulf Investment House once again took third place.
The results highlight ISRA’s increasing dominance in the research space, and the organization has been extremely active over the past year in developing its activities and making a real contribution to industry knowledge. Most recently, it collaborated with Bank Negara Malaysia to produce the valuable Educator’s Manual on Shariah Standards for the industry, which marked an important milestone in Shariah education in Malaysia. The organization is ambitious and optimistic for the future of the industry, and its enthusiasm permeates its global activities — with its latest forecast suggesting that Islamic global banking assets could reach US$3 trillion by 2018.
Indexing the Islamic universe
On the indexing side, S&P Dow Jones Indices (SPDJI) came top yet again — marking a decade of unbroken success, and the longest-running unbroken win in the history of the poll.
“S&P Dow Jones Indices’s commitment to Islamic finance is long-standing and continuous and this award is a recognition of this commitment. We are very privileged to serve the community of Islamic financial professionals with our indices, which focus on integrity of data, breadth of coverage and innovative investment approaches,” said Alka Banerjee, the managing director of global equity and strategy indices at S&P Dow Jones Indices.
SPDJI won 41% of the vote this year compared with 59% last year, and its dominance seems unchallenged by any serious competitor despite the suggestion last year that the merger of Russell Indexes and the FTSE Group to become FTSE Russell could change the game. However, FTSE did take second place in the contest for 2016, while 2015 runner-up MSCI came third.
Shaping the future
And finally, the industry would be unable to function without the technology that underpins all its operations: from the most basic to the most complex. For the ninth year in a row (and 10th time in total), Path Solutions takes the crown for Best Islamic Technology Provider. This category was extremely close, with a new runner-up emerging this year. Oracle FSS came second in a very tight race, while Malaysia’s Silverlake FSS took third place.
Path Solutions is one of the most prolific, hardworking and supportive players of the Islamic finance industry, and takes its role far beyond its day-to-day business activities to support entrepreneurial and technological advances and activities in all its forms. Most recently, for example, the group sponsored the Egyptian Collegiate Programming Contest in order to support the development of young professionals within the industry.
“We are gratified to add to our success this prestigious award that we are winning for the tenth time, in addition to being recognized by such a prominent industry-focused publication,” commented Mohammed Kateeb, the group chairman and CEO of Path Solutions. “But what makes this award exceptional, is earning it through the votes of our esteemed clients and partners — a fantastic validation of the value and technology leadership we are bringing to the Islamic finance industry. Certainly, we are determined to continue this impressive trajectory.”
As always, IFN extends its heartiest congratulations to all the participants in the IFN Service Providers Poll, the exceptional performance of which represents the growing strength, reach and size of the Islamic finance industry across the world. Thank you also to everyone who voted in this year’s event, making it an independent and unbiased election that truly represents the leaders of the industry as voted for by their peers. We are proud and privileged to be able to facilitate and distribute such honors, and we value the support that allows us to do so.
Most Outstanding Standard-Setting Body
Best Islamic Consultancy Firm
Dar Al Sharia
Best Takaful Provider
Pak Qatar Family & General Takaful (Pakistan)
Best Re-Takaful Provider
Dubai Islamic Insurance & Reinsurance Co (AMAN) (UAE)
MNRB Retakaful (Malaysia)
Best Interbroker for Islamic transactions
Bursa Suq Al-Sila’
Best Islamic Rating Agency
Moody`s Investors Service
Best Islamic Research Firm
International Shari’ah Research Academy for Islamic Finance (ISRA)
Best Islamic Advisory Firm
Dar Al Sharia
Best Islamic Index Provider
S&P Dow Jones Indices
Best Islamic Technology Provider