Could you provide a brief journey of how you arrived where you are today?
I accepted the offer from OSK Investment Bank (OSKIB) to lead the newly established Islamic banking division last year as it was time for me to move on to a new challenge after having served Bank Islam, the first full-fledged Islamic bank in Malaysia, for more than 20 years.
The value proposition offered by OSKIB in relation to the Islamic banking activities was very appealing as OSKIB has big plans for its Islamic finance operations that are not restricted to local businesses but capitalizes on its presence in the regional market. I believe that I can be a part of this grand aspiration and contribute to its success.
What does your role involve?
My immediate role is to establish a proper infrastructure to oversee the Islamic banking operations, identify new business opportunities and work with other business units within the OSKIB Group to offer a complete suite of Islamic investment banking products and services not only in Malaysia but at all our regional offices.
As this is a newly established Islamic window of a conventional investment bank, my role as director and head is also to educate and ensure good coordination with the various business and support units, as it is necessary at this point to tap the existing infrastructure and resources to support the Islamic banking activities.
What is your greatest achievement to date?
If we were to look back beyond my stint here, I can say that among my most satisfying contributions was to help develop the world’s first full-fledged Islamic money market in 1994.
As one of the senior members of the Islamic Technical Money Market Committee in Bank Negara Malaysia, I am proud that Malaysia has managed to introduce a dedicated Islamic money market that functions independently of the conventional markets. This Islamic money market acts as a catalyst to the introduction of countless Islamic financial market instruments not only in the money market but also the Sukuk, foreign exchange and derivative markets.
Which of your products/services deliver the best results?
We have offered Mudarabah Term Deposits-i to our clients and we will be launching our Commodity Murabahah Deposits-i and Tawarruq Financing-i soon. However, it is in the area of Shariah advisory that we are making significant in-roads as we are in the midst of discussions with a few potential clients, which include conventional foreign financial institutions.
What are the strengths of your business?
OSKIB has two competitive advantages compared to our local competitors. Firstly, we are an established investment bank with expertise in debt capital markets, corporate finance as well as derivative and structured products. Secondly, we are a growing regional player with footprints in financial centers like Singapore, Hong Kong and Shanghai in addition to emerging markets like Indonesia and Cambodia.
By leveraging on our wide-ranging expertise and established network, our Islamic banking franchise is expected to provide superior services to our clients.
What are the factors contributing to the success of your company?
I consider the commitment and teamwork of our people within the OSKIB Group, from both the Islamic banking team and other supporting departments, as the cornerstone to realizing our vision to be one of the leading regional Islamic investment banks.
What are the obstacles faced in running your business today?
As opposed to the straightforward borrower-lender relationship in conventional financing transactions, Islamic banking and financial transactions are slightly more complex and therefore entail a more detailed explanation to the relevant stakeholders.
Clients tend to compare and demand that the features of Islamic instruments offered be the same as conventional ones. However, we believe that through continuous education, our clients will eventually appreciate the benefits of Islamic financial transactions and will see why it needs to differ from conventional transactions.
Where do you see the Islamic finance industry in, say, the next five years?
Larger Islamic financial institutions will likely emerge not only in Malaysia but also in other parts of the world. In order for Islamic players to aggressively grow globally, they will need to be big in order for them to be able to absorb bigger risks and bring down transaction costs.
I believe that the consolidation of the Islamic financing industry is inevitable and it may start in Malaysia with the merger of the smaller Islamic banks.
Name one thing you would like to see change in the world of Islamic finance?
I would love to see the world’s largest economy, the US, embrace Islamic banking and finance. Although that remains to be seen, I believe that with continuous education and public relations, it is not impossible for an Islamic Banking Act or Islamic Securities Act to be passed in the US which will pave the way for more active participation by Islamic players and investors in that market.