An important determinant of branding success is scale of operations, which means that large international conventional banks have a clear advantage over their much smaller Shariah compliant counterparts. Nevertheless, the larger Islamic banks such as Al Rajhi Bank, Kuwait Finance House and Dubai Islamic Bank have brands that are well recognized in their local markets, and will no doubt be recognized in the markets in which they plan to expand, notably Malaysia for Al Rajhi and Pakistan for Dubai Islamic Bank. Successful branding is not simply a matter of a well-designed logo, but also of customers associating their own satisfaction in the services the bank provides with the brand. This implies the need to provide and maintain a high level of service quality. Research into the attitudes of Islamic banking clients in Kuwait and the UAE has revealed some dissatisfaction with the speed of service and complicated bureaucratic processes, and hence it is evident that Islamic banks still have some way to go to improve services. Nevertheless, the largest and oldest have a good track record, and their branding clearly provides comfort to their numerous customers. PROFESSOR RODNEY WILSON: It depends if the Islamic bank wants to be a local, national, regional or international player. For local and national brand awareness it’s generally a function of being the first (and possibly only) one “on the block” with branch offices, and advertising of their products and services. So, it is image and informational advertising. On the regional level, it appears (generally) that it’s more wholesale and transaction-oriented. International branding is more difficult to pin down, because of crossing cultures, regulations, home country competition, etc. For example, if we look at the UAE, we see that Dubai Islamic Bank has high brand awareness in Dubai (amongst all the Emirates), Abu Dhabi Islamic Bank has high brand awareness in Abu Dhabi, and Sharjah Islamic Bank has high brand awareness in Sharjah. If we look at Saudi Arabia, Al Rajhi and NCB (Islamic retail) have high brand awareness nationally; in Qatar, it is Qatar Islamic Bank and Qatar International Islamic Bank; in Kuwait, it is Kuwait Finance House. On the regional level (GCC), it is Kuwait Finance House, Gulf Finance House, and the upcoming Unicorn Investment Bank, to name a few. On the international level, Dallah Albaraka, DMI and Arcapita (formerly First Islamic Investment Bank) all have a presence in London and the USA. The key issue for branding at the international level is investment in the brand. Islamic banks have never reached out to the western media, a very important stakeholder in and on finance news and views. Islamic banks with international aspirations need to be: (1) patient, (2) advertising in such media forums, (3) make their executives available to the media, and (4) put out information in a timely and periodic basis. Presently, advertising is done minimally, if at all, as institutions see it as a cost and not an investment in the brand. Financial journalism is much more knowledgeable and aggressive in the west than in the OIC with Islamic banks, hence better preparations are required. Finally, building an international brand requires to be in it for the long haul. I believe that if Islamic banks were to look at a great example of building an international brand/awareness by a GCC “entity,” they should look at Dubai Inc, Emirates Airline and Emaar. RUSHDI SIDDIQUI: “Branding” takes an investment in strategy, time and money. It can be local, continental or even worldwide. It can be general banking or niche-oriented. There is nothing new to be learned, so conventional “branding tools” apply as well to Islamic banks as to any other bank. As visibility is important, one thing to do is to SHOW the availability and reliability of the products and their furnishers. Since in most jurisdictions there are recognized “financial services” offered by accredited “financial institutions,” all with local regulatory approval and supervision, Islamic financial institutions should have no problem competing with their conventional counterparts. PAUL WOUTERS: Brands must essentially reflect the Unique Selling Point (USP) of the bank, in addition to generating emotional appeal to the customers. Being relatively new and innovative players in the financial markets and challenging the very foundation of the conventional banking model, the brands of Islamic banks must reflect quality in everything they do – quality in their conformity to Shariah principles and what ensues from this in terms of the fairness and equity features of their products and transactions; quality in customer service; quality of management, particularly risk management and financial management; and quality and transparency in financial reporting. Whilst Islamic banking products and services are offering a sound ethics-based challenge to conventional products, a possible fiduciary concern in the minds of regulators and markets is whether these banks are being managed professionally so that depositors are not placed at a higher level of risk by way of bank failures. Needless to say, the core USP of Islamic banks should be compliance with Shariah. Nevertheless, Islamic banks must ensure that there is no compromise on management quality, particularly risk management, operating efficiency, profitability and long-term viability. A relentless focus on all of these factors by the boards of Islamic banks will be essential in the brand-building process. FAIZAL SALIEH: Islamic finance has come a long way in the past three decades to find its way into mainstream banking. As a nascent industry, it has made the case for itself to economists as a viable self-containing financing system. Now the industry needs to work collectively to stamp for itself the same brand name that conventional banking enjoys. Thus far Islamic finance has concentrated its efforts to develop economically sound Shariah compliant tools, now it needs to focus most of its attention on the needs of the customer. The industry has a lot to do before it can recline comfortably on an equal footing with conventional financial institutions. In trying to win the market that conventional banking competes in, the Islamic finance industry needs to account for certain considerations. It will require the development of a full range of products that will meet the same functions of conventional banking products. However, this must be done keeping in mind Shariah compliance and standing firm in the base of holy sources. Conventional banking should serve the sole purpose of being a benchmark and not a model for emulation. This mindset must be instilled in the industry as it moves forward. Trying to build for itself a brand name on a par with conventional tools, Islamic finance must first meet the requirements of the clientele. This entails prolific financial engineering whilst remaining grounded in the Shariah to address the different needs of clients. This is just a stepping stone, albeit the most crucial one as the industry marches into the mainstream. A plethora of Shariah compliant financial products serves little purpose if they are not of the same calibre as conventional products. This mandates the birth of a new kind of professional: Shariah conversant bankers/economists. Currently, very few can boast of being adept in both aspects of this industry and they are heavily sought after internationally. Once this gap is bridged, there can be smoother mutual co-operation in creating what should be superior Islamic banking products. These suggestions are purely the primary steps that the industry needs to take as it strives to find its place in the market. In retrospect, the industry has burgeoned over the past decade or so and has seen unprecedented success. This should only bolster efforts to push the industry forward to provide better and better Islamic banking products. The products will thus endure the crucial period of accruing credibility and eventually earn the same brand recognition as and compete on the same footing with conventional products. HISHAM MABROOK: |