ISFIRE December 2018 Issue by aatazazfaisal

Every Decision Considers

Your Future Oasis was formed with the belief that a company could deliver a track record of continual excellence, outstanding results and superior returns in a socially responsible and ethical manner. It is a belief that has led us to an unwavering commitment towards our clients, their families and society at large. Over the past twenty one years this commitment has made us a trusted global wealth manager and led us to continue to value each decision we make. Because we know that every choice we make today will impact the lives of our clients tomorrow. IRELAND Oasis Global Management Company (Ireland) Ltd 4th Floor, One Grand Parade, Dublin 6, Ireland. Tel: +353 (1) 495 9800 Fax: +353 (1) 495 9888

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Collective Investment Schemes | Global Funds | Individual Savings Accounts www.oasiscrescent.com Disclaimer: Oasis funds are long term investments. Past performance is not a reliable indicator to future results. The value of your investment may go down as well as up and you may not get back the original amount invested. This advert issued by Oasis Crescent UK Ltd., an authorised financial services holding company registered by the FCA in the UK, No. 7757777. FP92/11/2018

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Connecting the global Islamic financial market responsibly www.ddcap.com

NOTE FROM THE

EDITOR

IN CHIEF

nother year is upon us. As I sit here in the tail end of 2018 writing this note, I am reminded of the many things we have to be thankful for and many more to look forward to. For one, 2019 will mark the tenth-year anniversary edition of ISFIRE magazine. While initially ISFIRE focussed primarily on Islamic finance, the magazine is today regarded as a leading international publication in the area of Islamic business and finance, delivering to its discerning readership a mix of exclusive interviews with leading personalities, scholarly contributions on a number of latest topics, expert opinions on topics related to management and leadership, and news & events to keep readers updated on the latest developments in the industry. Contents in this last issue of the year speak to challenges, opportunities and trends driving the global Islamic business and finance industry. Articles on Shariâ&#x20AC;&#x2122;a-compliant cryptocurrency, blockchain-based waqf, zakat management, and the role of Islamic social finance are some of the thought pieces featured. The column Perspectives look at the issue of education and the 4th Industrial Revolution. With technology rapidly changing our economic, cultural and social realities, the question of how to prepare the younger generation and re-educate the current generation for these changing realities has been a pressing issue for contemporary higher education. We also reached out to professionals asking them to share with our readers what is the one leadership lesson they wished they had learned sooner. Our cover story for this issue features Mr. Amman Muhammad, CEO of FNB Islamic Banking, who was named IRBA CEO of The Year 2018 at the recent concluded 4th Islamic Retail Banking Awards (IRBA) 2018 in Dubai. A leading Islamic finance leader in South Africa, Mr. Amman Muhammad has been the driving force in pushing the Islamic banking and finance agenda in his country. I hope you stay connected with ISFIRE and wish you a good year full of triumph and growth.

Dr. Sofiza Azmi Editor-in-Chief

ISSN 2049-1905

EDITOR-IN-CHIEF Dr. Sofiza Azmi CEO, Edbiz Consulting

INTERNATIONAL EDITORIAL BOARD Dr. Nafis Alam University of Reading Malaysia

Professor Mehmet Asutay Durham University

Professor Dr. Mehmet Bulut Istanbul Sabahattin Zaim University, Turkey

Dato’ Dr. Asyraf Wajdi Dusuki Islamic Finance Expert

Professor Joseph Falzon University of Malta

Dr. Mian Farooq Haq

TABLE OF

CONTENTS DECEMBER

State Bank of Pakistan

Professor Kabir Hassan, The IDB Prize Winner 2016 University of New Orleans

Dr. Rizwan Malik Islamic Finance Expert

Moinuddin Malim Alternative International Management Services

Dr. Aishath Muneeza INCEIF

Dr. Asmadi Mohamed Naim Universiti Utara Malaysia

Professor Muhamad Rahimi Osman Universiti Teknologi MARA

M. Saleem Ahmed Ranjha Wan Miana Rural Development Programme

Dr. Irum Saba Institute of Business Administration, Karachi

Dr. Mughees Shaukat College of Banking and Financial Studies, Muscat

Dr. Usamah Ahmed Uthman King Fahd University of Petroleum & Minerals

ADVERTISEMENTS, COMMERCIAL AND SUBSCRIPTION ENQUIRIES Faisal Mehmood E: fmehmood@edbizconsulting.com T: +44 (0) 203 617 1089

PUBLISHED BY Edbiz Corporation Limited 305 Crown House, North Circular Road, Park Royal, London, NW10 7PN, United Kingdom T: +44 (0) 203 617 1089 E: info@edbizconsulting.com W: www.edbizconsulting.com

ISFIRE REVIEW 10 Shari’a-Compliant Cryptocurrency and the

Need for an Islamic Crypto Exchange

Maxat Salpynov

36 Takaful in Nigeria: The Role of Shariah

Advisory Committee

Dr. Talmiz Usman 42 Implementing Islamic Social Finance:

Challenges and Proposed Solutions

Asst. Prof. Dr. Nor Razinah Mohd Zain and Prof. Dr. Engku Rabiah Adawiah Engku Ali

70 Strengthening SDGs Through Untapped Waqf

Funds: A Blockchain-based Waqf

Faaza Fakhrunnas and Yunice Karina Tumewang

COVER STORY 24 An Exclusive Interview With

Amman Muhammad

CEO of FNB Islamic Banking

TALKING POINTS 18 Hidden Traps in Shari’ah Decision Making Ehsanullah Agha

78 Going from Post to Pillar Iqbal Nasim, CEO at National Zakat Foundation, UK

24 42 POINT OF VIEW 34 The Millennials: Business and Tech Wizards or

Self-Entitled Clowns?

Dr. Muneer Zuhdi

62 Data Driven Organisation: It’s Not Just An IT

Project…

Dr. Farouk Abdullah

64 Elon Musk’s Mastery of Sales Success Hassan Ali

PERSPECTIVES

52 Education And The Global Impact Of The

Fourth Industrial Revolution

82 10 Leadership Lessons Professionals Say They

Wish They Had Learned Sooner

ISFIRE PERSONALITY 58 Toyin Kekere-Ekun CEO, Lotus Capital

ISFIRE REPORT

88 The 8th Global Islamic Finance Awards 2018

Celebrates Excellence in Islamic Finance

This publication is provided for information purposes only and should not be treated as financial, legal or policy advice in relation to Islamic banking and finance in general or to any Islamic financial institution in particular. The reader should not act on the basis of the information contained in this publication without having obtained individual, expert advice. In this respect, publishers, editors, contributors, sponsors and other supporters of the publication do not assume responsibility for any damage resulting from decisions made by the reader on the bases of the information contained herein.

ISFIRE REVIEW

SHARIâ&#x20AC;&#x2122;A-COMPLIANT

CRYPTOCURRENCY

AND THE NEED FOR AN

ISLAMIC CRYPTO EXCHANGE MAXAT SALPYNOV

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CRYPTOCURRENCY IS NOW RECOGNISED AS ONE OF THE KEY INNOVATIVE AREAS IN THE FIELD OF ISLAMIC FINANCE.

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Cryptocurrency is now recognised as one of the key innovative areas in the field of Islamic finance. This has led to the initiation of cryptocurrency projects in various Islamic countries via the setup of cryptocurrency exchanges. Southeast Asia is already a hotbed for cryptocurrency with the likes of Bitcoin Indonesia (Indonesia) and Coinbox (Malaysia). In the UAE, Dubai-based BitOasis offers its services in Kuwait, Bahrain and Saudi Arabia. Recently, Stellar became the first digital ledger technology (DLT) protocol to obtain Shari’a certification for payments and asset tokenization. The Shariyah Review Bureau (SRB), an Islamic advisory firm licensed by Central Bank of Bahrain, provided the certification for Stellar, alongside guidelines for the types of assets that can be traded in its platform. The move highlights how Fintechs are broadening their footprint to include growth markets in the Middle East and Southeast Asia.

The increasing interest in bitcoin and other cryptocurrencies has extended into the Islamic world and the main centres of Islamic finance. On the other hand, the absence of a cryptocurrency platform that would guarantee the work in accordance with the norms of the Shari’a, has kept a significant number of Muslim investors from entering the cryptocurrency markets. Another problem is the lack of a unified position on cryptocurrencies amongst the Muslim communities. Ethical uncertainties pertaining to compliance of individual cryptocurrencies and the market as a whole with the norms of the Shari’a has led to the distancing of and, as a consequence, to the non-involvement of almost a quarter of the world’s population towards a technologically innovative financial sector.

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Complicating the debate further is the fact that there are hundreds of unique cryptocurrencies, each with different features related to the process of distribution, mining and trading. They also differ in terms of their underlying commodities, projects or businesses. Moreover, it is inappropriate to have one Shari’a ruling for various cryptocurrencies, as a majority of the cryptocurrencies clearly have characteristics that are forbidden for Muslims. Most of the existing Shari’a rulings either deal with only bitcoin or include all types of cryptocurrencies, disregarding their peculiarities. Given that the most famous type of cryptocurrency is bitcoin, existing fatwas (legal opinions) are generally concerned solely with bitcoin. However, the principles and arguments in analysing any types of cryptocurrencies are similar. SHARI’A COMPLIANCE OF CRYPTOCURRENCY

It is important for the development of the cryptocurrency economy to understand whether the cryptocurrency is halal for Muslims or otherwise. Scholars around the world have differing views of cryptocurrencies. In general, scholars and Shari’a experts have two different opinions. The first group of scholars is of the view that cryptocurrency is haram, i.e. prohibited by Shari’a. The other group argues that cryptocurrency is in principle halal (permissible) because of the social concurrence concept. However, they also emphasised that this does not necessarily mean that cryptocurrencies can be recognised as a legitimate form of currency. National Sharia authorities have not ruled on whether cryptocurrencies are permissible, and while several global bodies recommend standards for Islamic finance, none has the authority to actually impose them.

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Many governments seem ambivalent: worried about the potential for instability, but unwilling to lose the chance of benefiting from new technology. The Saudi Arabian and UAE central banks have warned their citizens about the risks of trading bitcoin, but have not imposed outright bans. Islamic jurists in South Africa have ruled in favour of cryptocurrencies, arguing they have become socially acceptable and commonly used. Further, some scholars in Turkey, India, and Britain have labelled cryptocurrencies impermissible. In January, Egypt’s Grand Mufti declared they should not be traded. However, one of the prominent scholars in the world — Shaikh ’Abdul Sattar Abu Ghuddah — is of the view that cryptocurrency sits on the border of permissibility and prohibition. His issue with cryptocurrencies are their excessively speculative nature and security risk. In summarising the fatwas of scholars who support the view that cryptocurrency is haram, several common reasons of prohibition are highlighted below:

THE FIRST GROUP OF SCHOLARS IS OF THE VIEW THAT CRYPTOCURRENCY IS HARAM, I.E. PROHIBITED BY SHARI’A. THE OTHER GROUP ARGUES THAT CRYPTOCURRENCY IS IN PRINCIPLE HALAL (PERMISSIBLE) BECAUSE OF THE SOCIAL CONCURRENCE CONCEPT.

a) Bitcoin is not a legal tender (medium of payment recognised by a legal system to be valid for meeting a financial obligation) and does not have an intrinsic value. b) Issuer of bitcoin is unknown and bitcoin is not monitored and backed by a central bank or government. c) Bitcoin is not stable and highly speculative. d) Bitcoin is not transparent and can be used for money laundering and illegal operations.

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BITCOIN IS NOT A LEGAL TENDER (MEDIUM OF PAYMENT RECOGNISED BY A LEGAL SYSTEM TO BE VALID FOR MEETING A FINANCIAL OBLIGATION) AND DOES NOT HAVE AN INTRINSIC VALUE. ISSUER OF BITCOIN IS UNKNOWN AND BITCOIN IS NOT MONITORED AND BACKED BY A CENTRAL BANK OR GOVERNMENT. BITCOIN IS NOT SPECULATIVE.

STABLE

AND

HIGHLY

BITCOIN IS NOT TRANSPARENT AND CAN BE USED FOR MONEY LAUNDERING AND ILLEGAL OPERATIONS.

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IN ORDER TO ADVOCATE THE PERMISSIBILITY OF BITCOIN FROM THE SHARIâ&#x20AC;&#x2122;A POINT OF VIEW, EACH POINTS PRESENTED ABOVE ARE DISCUSSED IN DETAIL BELOW.

A) BITCOIN IS NOT A LEGAL TENDER AND DOES NOT HAVE INTRINSIC VALUE

When a government announces something as a legal tender, it automatically gets the acceptability within its jurisdiction. On the other hand, to qualify something as money, a legal tender status is not a necessary condition. Bitcoin is driven purely by supply and demand, the same thing that drives the cost of gold and dollars. However with bitcoin, the supply is well known, and the mechanism cannot be gamed. Bitcoin replaces trust in centralised governmental authorities with trust in a transparent and auditable mechanism as well as trust in decentralised algorithms. The main criterion for money in Shariâ&#x20AC;&#x2122;a is its acceptability as a mean of exchange, whether enforced by government laws, or through widespread voluntary acceptance. In order for cryptocurrency to have value, there needs to be two components: scarcity and utility. Scarcity means that cryptocurrency has a finite supply. In the case of bitcoin, there is a predetermined amount that could be ever mined; which is 21 million coins. Hence, the total supply of bitcoin cannot be manipulated or inflated. With fewer bitcoin left to be minted (only 20% left to be mined), analysts anticipate a steady increase in prices as digital scarcity makes the coin more valuable than other assets over time, even gold.

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Bitcoin also has an intrinsic value since it derives its value from the effort it takes to mine as well as the fairly high production cost (of mining) involved. Furthermore, its value is supported by its high demand; whereby people using bitcoin are ready to buy and sell bitcoin for real goods and services. This confirms the value of bitcoin as a recognised means of exchange and payment. B) ISSUER OF BITCOIN IS UNKNOWN AND BITCOIN IS NOT MONITORED AND BACKED BY A CENTRAL BANK OR GOVERNMENT

Considering the claim that bitcoin is not monitored and guaranteed by the central authority, we can argue that the governing framework of bitcoin is a set of rules adopted by voluntary mutual acceptance users of the cryptocurrency, and that these rules are published and open for anyone to critique or even suggest revisions. It is mathematically impossible to manipulate the laws and rules that govern the bitcoin mining and transaction processes because of the cryptographic technology underlying the cryptocurrency. Furthermore, bitcoin uses blockchain technology, which is more secure than any centralised system.

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C) BITCOIN IS NOT STABLE AND HIGHLY SPECULATIVE

Cryptocurrencies are highly volatile. which makes them very risky to trade. The risk of loss in trading or holding cryptocurrencies can be substantial. If you look at bitcoin as a payment instrument, without doubt, big changes in value are not in favour of bitcoin. On the other hand. there are many currencies with high inflation rates. Tracing back to history, there were even more examples of huge inflation, when money was getting down thousands of times in one year. The situation with bitcoin is completely different. This is a fairly new invention, which has become more expensive in the 8 years since its inception. Throughout its history, Bitcoin has gone through a number of extreme changes in terms of price – from fast pace growth to several crashes. In fact, it has had over six instances where it lost more than 30% of its value. In 2017, Bitcoin went up roughly 2,000% and in 2018, it has plummeted more than half of that price. Presently, bitcoin is not yet stable and is subjected to sharp price changes. At the same time, a Muslim should not set a target to receive speculative income and be engaged in speculation, but should invest and/or use bitcoin as a medium of exchange or payment and as a store of value. Shari’a principles, in addition to general prohibitions such as riba, maysir, gharar, qimar, khilabah and ghishsh; emphasise on the real economic activities based on physical assets. In attempts to sway the debate, some startups have launched cryptocurrencies backed by physical assets and thereby certifying them valid by Islamic advisors. The idea is to limit speculation.

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An example of cryptocurrency backed by physical asset is the gold-based cryptocurrency. Here, a token or coin is issued that represents a value of gold (for example 1 gram of gold equals 1 coin). The gram of gold is stored by a trusted custodian (preferably third party), and can be traded with other coin holders. At a minimum the price of the coin will always equal the current gold rate. If the cryptocurrency becomes popular then the price of the coin can potentially increase in value, greater than the value of gold. If the cryptocurrency doesn’t take off then the value remains as the value of the gram of gold. In 2017, a cryptocurrency that is fully backed by gold assets was launched by a Dubai-based fintech, OneGram. As the name suggests, each OneGram Coin is fully backed by one gram of gold. OneGram obtained a ruling that its cryptocurrency complies with Shari’a principles from Dubai-based Al Maali Consulting. Another Shari’a-compliant gold-backed cryptocurrency, GOLDX, was launched by the Malaysia-based firm HelloGold. With Amanie Advisors as its Shari’a Advisor, HelloGold has based its operational processes and business model on the Shariah Standard on Gold by the Accounting and Auditing Organization for Islamic Financial Institutions. D) BITCOIN IS NOT TRANSPARENT AND CAN BE USED FOR MONEY LAUNDERING AND ILLEGAL OPERATIONS

The reason behind the creation of bitcoin was for it to become digital cash as an alternative to it becoming an actual currency. It is important to note that all money laundering and illegal activities that bitcoin can be used for, can also take place via cash. Cash has been the primary mode of payment for drug dealers, money launderers, and other criminals. Some Islamic scholars claim that bitcoin is impermissible as it is subject to fluctuation and has the potential to be used in illegal activities.

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These are not valid reasons under Shari’a as these factors are external to bitcoin. The price of bitcoin is subject to supply and demand, just like commodities and fiat currencies, and the use of any lawful thing for an unlawful purpose cannot not make the thing itself unlawful. Also, bitcoin removes the need for a bank to store and send your money, so there should not be any worry about a bank using your money to generate profit from riba for themselves. However, in the process of analysing the different thoughts on the Shari’a compliance of cryptocurrencies, it must not be forgotten that fiqh (Islamic law) is a process rather than a strict code. The differences between several legal schools of thought should be utilised to resolve a problem at hand in light of modern circumstances rather than obstructing the way to progress. In fact, there is a problem in the lack of a systematic study of the cryptocurrency market and its key elements based on Shari’a norms. ISLAMIC CRYPTO EXCHANGE

A crypto exchange is a digital platform, on which customers can trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies. A cryptocurrency exchange is also known as a digital currency exchange (DCE). Although there are over 11,000 cryptocurrency exchanges in the world1, currently no exchange for halal coins are in existence. Recently, ADAB Solutions (UAE-based financial services firm) announced plans to launch the world’s first Shari’a-compliant cryptocurrency exchange. Called the First Islamic Crypto Exchange (FICE), the platform aims to become a universal solution for the involvement of Muslims and users of Islamic finance in the cryptocurrency market. When launched, this will be the first project that allows the performance of cryptocurrency transactions which are in accordance with the principles of Islamic finance and on the basis of Shari’a norms. It will be open to all users, regardless of their religions.

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1. ref: https://coinmarketcap.com/

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FICE will offer services based on the high moral and cultural values of Islam and will give confidence as well as rovide access to all users of cryptoeconomics. This allows the formation of an interested community, which will be on a systemic basis formalising the work of cryptoeconomics based on Shari’a norms. One of the most important features of this project is that the management of the company is in accordance with the Islamic management model, which supplements the generally accepted standards of business management. The company’s Corporate Governance System is developed based on AAOIFI and IFSB standards. But the most important difference lies in the fact that FICE will introduce a Shari’a Advisory Board (SAB) within its structure.

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The SAB is an independent body represented by internationally recognised Shari’a experts, who will provide inputs on Shari’a matters to ensure FICE’s compliance with Shari’a principles. FICE will not only provide highquality services and information to the Muslim community about the cryptocurrency market, it will also carry out an explanatory mission as well as facilitate the involvement of the Muslim community within the cryptocurrency market. Based on the principles of Islamic finance and adherence to Shari’a norms, FICE would potentially solve the problem of excessive risks in cryptocurrency systems by excluding the speculative component from the work of the exchange. This will allow the stabilisation of the crypto-exchange platform, which will increase its reliability and protect FICE users from excessive risks.

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MAXAT SALPYNOV IS DEPUTY CEO OF ADAB SOLUTIONS. HE HAS OVER 15 YEARS OF EXPERIENCE IN BANKING AND HAS A STRONG ENTREPRENEURIAL AND BUSINESS BACKGROUND WITH MAJOR EXPERIENCE IN ISLAMIC FINANCE.

ISFIRE REVIEW

TALKING POINTS

HIDDEN TRAPS IN

SHARI’AH DECISION MAKING

EHSANULLAH AGHA

The emergence of Islamic finance has introduced a new discipline known as “Shariah advisory services” (SAC). SAC adds a unique value proposition of religious law in the area of commercial life, where secularism rules almost unquestioned throughout the rest of the world. This phenomenon has emerged as a regulatory requirement to ensure Islamicity of Islamic

Periodic Shari’ah Review

Preliminary Shari’ah Analysis

Annual Shari’ah Review

Shari’ah Ruling

Shari’ah Review of the Documents

ISFIRE, DECEMBER 2018

1. As the sellers struggle to accept the reality of declining prices on time, they had to offer more discounts to sell the property.

Product Initiative

Dissemination of Shari’ah Ruling

financial institutions (IFIs) by establishing an independent Shari’ah Board (SB). According to AAOIFI, “Shari’ah board is entrusted with the duty of directing, reviewing and supervising the activities of the IFIs to ensure that they comply with Shari’ah principles”.1 The following diagram depicts the cycle of SB involvement in the business of an IFI.

TA L K I N G P O I N T S

Legal Documentation and Product Proposal

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TALKING POINTS

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TALKING POINTS

One of the major responsibilities of SB is to issue a Shari’ah certification (fatwa) endorsing Shari’ah compliance of the products offered by the institution. Shari’ah scholars (SB members) pronounce the resolution through a collective ijtihad — a systematic logical approach adopted to apply legal ruling to a financial matter based on their interpretation of Shari’ah sources. From a juristical perspective, this is called “tanqihul manat”. According to Sheikh Taqi Usmani, a leading Islamic finance scholar, the process of tanqihul manat requires a Shari’ah scholar to get the “right description” (tassawur al-mas’alah) by understanding financial nature and business model of the product and, then to apply the relevant Shari’ah ruling (al-ttakyif al-shari).2

SHARI’AH DECESION MAKING TRAPS

STATUS-QUO

THE FRAMING TRAP

The first logical move in tanqihul manat is known in business management science as “framing the problem”. It is like a frame around a picture that separates it from the other objects in the room. In Shari’ah decision making, framing creates a mental border that encloses a particular aspect of a situation to outline the key elements of it for in depth understanding. A mental frame enables the Shari’ah scholars to navigate the complex nature of a financial product, so they can avoid solving the wrong problem or solving the right problem in the wrong way. Since majority of SB members (Shari’ah advisors) come from Shari’ah background, they typically rely on the information presented to them by the management of an IFI (i.e. business and product development unit) as they normally do not possess practical exposure to analyse directly a complicated product. Therefore, the way a product is defined to them by the management actually shapes the potential Shari’ah solution that SB members select

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The exercise of tanqihul manat is in fact an important component of Shari’ah advisory services provided to IFIs by Shari’ah scholars, which simply can be termed as “Shari’ah decision making”. Scientific research proved that there are various psychological traps, which significantly influence decision making.3 This article highlights only those traps that potentially lead to debacles in Shari’ah decision making, namely (1) the framing trap, (2) the status-quo trap, (3) the anchoring trap and (4) the confirming-evidence trap, along with antidots tips.

FRAMING TRAP

ANCHORING

(of course with some exceptional Shari’ah minds who have developed throughout the years a phenomenal comprehension of financial markets). A substantial amount of studies found that “framing” significantly impacts outcome of a decision. The framing effect is an example of cognitive bias, in which people react to a particular choice in different ways depending on how it is presented e.g. as a loss or a gain, positive or negative.4 Similarly, there are evidences suggesting that framing influences Shari’ah decision in Islamic finance industry depending on the manner in which a financial matter is presented before the SB. A famous example of the framing trap could be a fatwa endorsing conventional insurance as attributed to a famous Egyptian Scholar Muhamad Abdahu. A French man explained to him that insurance is like a mudarabah contract where one party provides capital and the other manages the fund. Later, he asked Muhamad Abdahu about its Shari’ah status. Muhammad Abdahu considered it a Shari’ah-

2. Usmani M. T. (2011). Usul Ifta wa Adabuhu. Karachi: Maktabah Mariful Quran.

CONFIRMING EVIDENCE

3. Hammond, J. S., Keeney, R. L., & Raiffa, H. (1998). The hidden traps in decision making. Harvard Business Review, 76(5), 47–58.

4. Paese, P. W., Bieser, M., & Tubbs, M. E. (1993). Framing effects and choice shifts in group decision making. Organizational Behavior and Human Decision Processes, 56(1), 149–165.

5. Usmani M. T. (2011). Usul Ifta wa Adabuhu. Karachi: Maktabah Mariful Quran.

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TALKING POINTS

compliant product based on the information presented to him. This was in reality “mis-framing” of the product.5

6. Atallah, & Ghoul. (2011). The Wa`d based total return swap: Shariah compliant or not. The Journal of Derivatives, 4(5).

7. DeLorenzo, Y. T. (2007). The total returns swap and the “Shariah Conversion Technology”Stratagem. Retrieved from http://www. failaka.com/downloads/ DeLorenzo_TotalReturnsSwap.pdf

8. Samuelson, W., & Zeckhauser, R. (1988). Status quo bias in decision making. Journal of Risk and Uncertainty, 1(1), 7–59.

Another latest example in Islamic finance would be the case of Islamic total return swap proposed by a multinational bank in 2007 and was approved by some Shari’ah scholars. The proposed product was claimed to be a Shari’ah-compliant version of the conventional total return swap (TRS), which had been christened as the “wa’d” (unilateral promise) - based total return swap. The objective was to use non-compliant assets and their performance to swap its returns into a so-called Shari’ah-compliant investment portfolio.6 The product was presented to Shari’ah scholars in a way reflecting that the performance of non-halal fund is just used as a benchmark index for the Islamic investment fund, resembling the interest-based pricing mechanism (LIBOR) in Islamic banking products. However, its legality was heavily criticised by other scholars on the ground that wa’d is used as a mere stratagem to halalize a prohibited income. The analogy (qiyas) between the use of LIBOR for pricing and the use of the performance of non Shari’ah-compliant assets for pricing is both inaccurate and misleading. The only similarity is that both are used for pricing. LIBOR is used to indicate the return, while the other is used to deliver the return. Sheikh Yuosuf DeLorenzo categorically considered this Shari’ah decision as an unfortunate one (due to mis-framing):7 “It is an unfortunate shortcoming on the part of the Shariah board in this transaction that it has failed to consider the context of the offering. It is an even greater shortcoming when it fails to consider the consequences the product will have for the entire industry. When it is

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clear that a product cannot be offered in its own form or, in other words, when it cannot be offered directly, but must be offered by means of a stratagem that is basically a derivative like a swap, red warning flags should go up. In such situations, the Shariah Board must pay careful attention to the circumstances of the offering. If the circumstances can be found to justify such a product, then it may be possible to grant approval. If not, however, approval must be withheld. In the case of promised returns from a referenced basket of assets, the assets must be Shariah compliant in order for the returns to be Shariah compliant. It really cannot be otherwise.” To avoid such incidences, Shari’ah scholar shouldn’t automatically accept the initial frame formulated by one of SB members or the management. Rather he should always try to reframe the problem in various natural ways. Sheikh Taqi Usmani accentuated that a Shari’ah scholar shall get a deep understanding of the concerned case before issuing a fatwa: Sometimes the fatwa seeker–due to his limited knowledge (of Shari’ah)– cannot explain features that determine Shari’ah ruling (of the case enquired). In such scenarios, the scholar (mufti) shall try to obtain the relevant information by other means. This happens –mostly– in commercial affairs related questions in which the fatwa seeker presents a case according to his understanding and ignores the important aspects (that impacts Shari’ah ruling). While in some instances,

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TA L K I N G P O I N T S

TALKING POINTS

the fatwa seeker deliberately misrepresents (misframes) the matter (to manipulate its Shari’h ruling) …Therefore, Imam Muhammad– a famous Muslim jurist– used to visit markets to understand nature of the business nature and the prevailing commercial trends. THE STATUS-QUO TRAP

9. Burmeister, K., & Schade, C. (2007). Are entrepreneurs’ decisions more biased? An experimental investigation of the susceptibility to status quo bias. Journal of Business Venturing, 22(3), 340–362.

10. Zulkifli. (2016). From legalism to value-oriented Islamic finance practices. Humanomics, 32(4), 437–458.

11. Chapman, G. B., & Johnson, E. J. (1994). The limits of anchoring. Journal of Behavioral Decision Making, 7(4), 223–242.

12. Campbell, S. D., & Sharpe, S. A. (2009). Anchoring bias in consensus forecasts and its effect on market prices. Journal of Financial and Quantitative Analysis, 44(2), 369–390.

13. Tawarruq is a financial instrument involving a series of sale contracts conducted in succession — a person purchases a commodity from a seller on deferred basis and subsequently sells it to a party other than the original seller on a cash basis for the purpose of obtaining liquidity.

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Status quo trap is an emotional bias and a preference for the current state of affairs. Psychologically, human brain considers a prevailing practice as a reference point and perceives other alternatives that vary from that baseline as inferior, hence undesirable.8 This trap affects decision making eloquently as it underpins that the current practice is based objectively on a rationale. Therefore, whenever a new product is introduced there is a great tendency of rejection in the market.9 In the case of Islamic finance, the status-quo influences Shari’ah decision making from two aspects: management and scholarly reputation. It has been argued that the sin of innovation (thinking out of the box) tends to be punished much more severely than sins of replicating conventional products. The management often displays a strong bias toward a “novel” proposal since it perpetuates the ‘status-quo’ of existing conventional financial system that still—unfortunately—serves as a baseline for Islamic banking industry. For example, in 2014, Bank Negara Malaysia introduced mudarabah, musharakah and wakalah based investment account policy to portray the true spirit of Islamic investment. Nevertheless, instead of adopting this new model, IFIs resorted back to tawarruq based products.10 On the other hand, it is also observed that if a product is approved by famous Shari’ah scholars, it becomes often a challenge for junior Shari’ah scholars to question it or even to suggest another alternative due to the well-endowed reputation of those who endorsed it. To some extent, the status quo may be considered—depending on the case— a viable option. However, adhering to it out of fear will limit Shari’ah advisory options, and ultimately will compromise effective decision making.

TA L K I N G P O I N T S

To overcome this challenge, all other options should be carefully analysed. Exaggerating the effort or cost involved in switching from the status quo should be avoided. As far as questioning the opinion of senior Shari’ah scholars is concerned, the rule of thumb in Islamic discourse is to examine validity, authenticity and suitability of the underlying Shari’ah justification in the light of Islamic jurisprudence. This principle is exemplified by the evolution of Islamic jurisprudence into different school of thoughts, proving how constructive criticism has been playing a productive role throughout Islamic civilisation. An academic criticism shall not constitute by any means a discredit. THE ANCHORING TRAP

Anchoring in psychology refers to the common human tendency of giving disproportionate weight to the first information he or she receives.11 During decision making, an initial impression, estimate or idea thwarts subsequent thoughts and judgments, like an anchor that prevents the boats from moving away. For example, the initial price offered for a used car, sets an arbitrary focal point (anchor) for all following discussions. Prices discussed in negotiations that are lower than the anchor may seem reasonable, perhaps even cheap to the buyer, even if said prices are still relatively higher than the actual market value of the car.12 In Shari’ah decision making, a common anchor could be the first proposal presented either by the management or a member of the SB. For instance, when an IFI intends to replicate a conventional product, its first Shari’ah-compliant structure (alttakyif al-fiqhi) proposed during brain storming session may serve as an axis around which the subsequent discussion will revolve. One good example is the excessive use of tawarruq,13 which was initially suggested for personal financing in dire need cases. Nonetheless, since last two decades tawarruq has become the ideal baseline for both assets and liabilities sides products offered by IFIs. Due to its anchoring effect, it paved the way for reverse financial engineering that led to stagnancy and lack of innovation in Islamic finance. A prominent Islamic economist Najatullah Siddiqi demonstrated through macroeconomic analysis that the harmful consequences of tawarruq are much greater than the benefits generally cited by its advocates.14 He further articulates:

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TALKING POINTS The market has enthusiastically welcomed this development (tawarruq) mainly because it takes us back to familiar grounds long trodden under conventional finance. As a result, several scholars who approved tawarruq in the first instance are raising their voices against its indiscriminate widespread use. But profitmaximizers have rarely been amenable to moral exhortations. It is recommended to try using alternative starting points and approaches rather than sticking with the first line of thought that occurs. A scholar should be open minded with the capability to think about the problem independently before consulting others in order to avoid becoming anchored by their ideas. He should be vigilant to avoid anchoring by advisers, consultants and others from whom he solicits information and counsel. He should share with them as little as possible about his own ideas, estimates, and tentative decisions as revealing too much may result in his preconceptions simply coming back to him.

past jurists cannot be applicable to contemporary cases. After mentioning various examples of cultural trends that have changed with the passage of time, he concluded: “these are clear evidences affirming that a mufti (scholar) shall not confine himself (in making a Shari’ah decision) to what is written in classical books without taking into consideration the contemporary practices. Otherwise, the harm of such a Shari’ah decision will be more than its benefits.18 To circumvent confirming bias, a scholar should examine evidences with equal rigour avoiding the tendency to accept confirming evidence without question. One of SB members may play devil’s advocate to argue against the contemplating decision. All possible juristic solutions should be explored before drawing at a Shari’ah resolution. In seeking the advice of other experts, leading questions that invite confirming evidence should not be asked. It is advisable for SB member to not surround himself with a yes-man who always seems to support his point of view.

THE CONFIRMING-EVIDENCE TRAP

CONCLUSION

Confirmation bias is the tendency to “search for or favour evidence and information that confirms one’s preexisting beliefs or hypotheses”.15 Research shows that decision makers sometimes seek out information that supports their prevailing instinct or point of view, while avoiding information that contradicts it. This trap affects the individual to halt gathering information when the evidence gathered confirms the views (prejudices) one would like to be true. The source of confirmation bias lies deep within human psyches that disconfirmation is unquestionably superior to confirmatory reasoning.16

Psychologists have identified a series of manipulative flaws hardwired into human thinking process, which we often fail to recognise them during decision making. Shari’ah decision is apparently not an exception. By analysing the above facts, it can be concluded that these traps together point towards two key findings. First, an unfortunate Shari’ah decision might be the result of the partial information received by SB members and their subsequent limited perspectives. Such a decision will not only undermine legality of the product enquired but might also trigger reputational risk for the industry. To provide profound Shari’ah advisory services that reflect the multi-dimensional aspects of Islamic finance, the SB should deal with accurate information exploring issues from multiple perspectives.

In Shari’ah decision making, a common confirming bias occurs when a scholar seeks juristical evidences in classical literature (al-juzyat al-fiqhiyyah) to validate his position regarding a contemporary case. Bai’ alinah (sale of an asset with its subsequent repurchase on a deferred payment basis) – a common Islamic financing product in South Asia but divisive in other jurisdictions – would be a good example to illustrate confirming-evidence trap. Although Its permissibility is narrated from Imam Al-Shafi’i (founder of Shafi’i school of thought), but he referred to it as an unorganised sale that takes place occasionally without prior arrangement. Yet, this reference was taken by some IFIs to legalise a buy-back sale in an organised manner to offer a commercial financial product. This practice has created a growing frustration among scholars and proponents of Islamic economics due to the failure of Islamic finance in addressing the real economic and ethical issues beyond the legal realm of Shari’ah compliance. 17 Such a cheery-picking legalism not only undermines the true spirit of Islamic law (maqasid al-Shari’ah), but also deviates from the multi-dimensional aspects of Islamic finance at both macro and micro level. A famous Hanafi jurist Ibn Abidin rightly pointed out that a Shari’ah ruling in classical feqhi texts is usually based on the cultural norms of that particular period, which no longer can be prevalent. Consequently, some opinions of

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Second, most of these decision-making traps are correlated. Falling into one trap often leads to become prey of other traps as well. Avoiding these traps largely depends on how the SB members interact with each other during a decision-making process. Furthermore, we are always susceptible to these traps in the future despite having a successful track record in the past due to the different nature of decisions and circumstances. Therefore, Shari’ah scholars who are the source of confidence in Islamic financial industry should critically evaluate the situations confronting them to bypass the traps. Ehsanullah Agha is a PhD Scholar of Islamic finance at International Islamic University Malaysia and he is currently associated with Habib Metro Bank-Sirat Pakistan.

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14. Siddiqi, M. N. (2007). Economics of Tawarruq: How its Mafasid overwhelm the Masalih. In Tawarruq Seminar organised by the Harvard Islamic Finance Programme, at London School of Economics, London, UK on (Vol. 1).

15. Plous, S. (1993). The psychology of judgment and decision making. Mcgraw-Hill Book Company.

16. Mahoney, M. J., & DeMonbreun, B. G. (1977). Psychology of the scientist: An analysis of problem-solving bias. Cognitive Therapy and Research, 1(3), 229–238.

17. Syed, E. A., & Omar, M. (2017). Hiyal in Islamic finance: a recognition of genuine economic need or circumvention of Riba? Qualitative Research in Financial Markets, 9(4), 382–390.

18. Abeddin, I. (1990). Rasaael Ibn Abedin. Cairo: Maktabat al-Qahirah.

TA L K I N G P O I N T S

COVER STORY

AN EXCLUSIVE INTERVIEW WITH

AMMAN MUHAMMAD

CEO of FNB Islamic Banking

PLEASE TELL US THE STORY OF ISLAMIC BANKING IN SOUTH AFRICA, AS IT WILL BE INTRIGUING FOR OUR GLOBAL READERSHIP TO LEARN ABOUT ISLAMIC BANKING IN A COUNTRY WHERE MUSLIMS MAKE A SMALL MINORITY. The South African Islamic banking story is largely characterized by the history of Islam in the country. 2018 marks nearly 365 years that Muslims have been resident in South Africa. Around 1654, the Dutch East India Company established the Cape as a half¬way house for its ships travelling between Holland and the East Indies. It was also to serve as a penal settlement for convicts and political exiles from the East. It was in that same year that amongst those political prisoners was probably the first recorded Muslims to land on South African soil, two years after the white settlement in the country. It is interesting to note that those very same political prisoners and political exiles would lay profound and deep-rooted foundations that would ultimately allow the Islamic faith to thrive, prosper and play pivotal roles in the ultimate development of the new democratic South Africa. This foundation of faith was an important inspiration and extended deep, to the extent that many a Muslim were to take up noteworthy roles in the fight against “Apartheid”, the worst of afflictions that the old South African regime was unfortunately so notorious the world over for. Apartheid, a system of racial segregation enforced through government legislation designed to strip ‘non-white’ people (generally categorized as all people of colour) the most basic of human rights. Apartheid’s core principles were diametrically opposed to the teachings and practice of Islam. Apartheid was a non-democratic political system that denied the masses the right to a vote and ensured a state sponsored segregation of education, medical care, public services, financial services and numerous other critical services. The 1994 election marked the end of the Apartheid. Nearly 20 million South Africans casted their vote on 27 April that year in which Nelson Mandela and his political party, the African National Congress, gained an overwhelming victory of 62.65%.

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The ‘new’ democratic South Africa fielded a number of Muslim members of Parliament and a number of dedicated freedom fighters that quietly played significant roles in ensuring the collapse of the Apartheid system.

LEADING ISLAMIC WINDOW OF A CONVENTIONAL BANK IN SOUTH AFRICA HAS ITS OWN CHALLENGES. WHAT IS YOUR EXPERIENCE OF DEVELOPING FNB ISLAMIC AS A PREMIER BRAND NOT ONLY IN SOUTH AFRICA BUT ALSO IN THE REGION?

While Muslim numbers are considered to be marginal when compared to the country’s total population, the size of this constituency should not be confused with their affluence and influence.

First National Bank or as more commonly referred to as FNB, is the oldest bank in South Africa, and its roots can be traced back to 1838. When looking at FNB’s history, two things in particular stand out. The first is a story of survival - different circumstances in South Africa have posed many great challenges in our history, all of which FNB has successfully met.

In any case, Muslims continue to play an important role in South Africa and not just in politics, but famously on the sports field, medicine, education, philanthropy, academia, media and in economics. There are no formal statistics that precisely specify religious followings in South Africa. However, based on social, community and Islamic theological estimations; the number of Muslims is approximated to between one and a half to two and a half million people, roughly accounting for two percent of the total population of the country. Here once again, it is not the volume but rather the value of contribution that this community makes towards the development of the nation.

This track record provides a solid foundation for our future challenges. The second is a story of people our history has always been firmly influenced by the needs of the people we serve. The Acacia tree in our brand logo is a suitable representation of our history. Our roots run deep in South Africa, and we have grown thanks to our commitment to serving the needs of our clients and communities. This is evident in the fact that FNB was the first of the large four banks in South Africa to open an Islamic banking window and offer Islamic banking to whomever chooses this banking option, irrespective of their faith, and is not exclusive to South Africa’s minority Muslim population.

Given the constitutional freedom that South Africa affords its citizens, Muslims are free to practice their faith free from prejudice and persecution and it is against this back-drop that Islamic banking took root as a credible niche banking alternative to mainstream conventional banking. Islamic banking has been around for nearly 20 years. South African Islamic banking industry would be considered as an emerging Islamic financial market by global standards. However, recent legislative and potential regulatory enhancements will see South Africa steadily advance towards becoming an advanced Islamic financial market, firmly establishing itself as Africa’s predominant Islamic financial services market.

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Islamic banking products can be found in each one of the franchises that makes up the Group entity known as FirstRand Bank. FNB is a part of this banking group. In totality, the banking group offers a full spectrum of Islamic banking and financial service offerings, all of which fall under my leadership.

This offer includes Islamic retail and commercial banking – offered through the FNB brand, Islamic corporate and merchant banking services – offered through the RMB brand, Islamic vehicle and equipment finance – offered through the WesBank brand and Islamic trusts and wills and bespoke Islamic equity trading options – offered through our Wealth & Investments division. FNB Islamic Banking was not always the premium brand that it is today. We worked hard at creating the awareness of this as a niche banking alternative amongst potential customers and amongst key FirstRand Bank stakeholders. Once the required awareness was established across the board, I was able to drive home core Islamic banking education which essentially enhanced the overall Islamic banking value proposition.

THE ACACIA TREE IN OUR BRAND LOGO IS A SUITABLE REPRESENTATION OF OUR HISTORY. OUR ROOTS RUN DEEP IN SOUTH AFRICA, AND WE HAVE GROWN THANKS TO OUR COMMITMENT TO SERVING THE NEEDS OF OUR CLIENTS AND COMMUNITIES. THIS IS EVIDENT IN THE FACT THAT FNB WAS THE FIRST OF THE LARGE FOUR BANKS IN SOUTH AFRICA TO OPEN AN ISLAMIC BANKING WINDOW AND OFFER ISLAMIC BANKING TO WHOMEVER CHOOSES THIS BANKING OPTION, IRRESPECTIVE OF THEIR FAITH, AND IS NOT EXCLUSIVE TO SOUTH AFRICA'S MINORITY MUSLIM POPULATION.

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ISFIRE HAS GLOBAL DISTRIBUTION AND OUR READERS COME FROM ALL OVER THE WORLD. TELL US ABOUT YOUR PERSONAL APPROACH TO ISLAMIC FINANCE. AS CEO OF FNB ISLAMIC BANKING AND PRIOR TO THAT IN YOUR ILLUSTRIOUS CAREER, HOW HAVE YOU CONTRIBUTED TO THE DEVELOPMENT OF ISLAMIC FINANCE? My interest in Islamic banking and finance really started to blossom while I was working at Deloitte, while in the Financial Institutions Services Team, where I was involved in audit, advisory and consulting services. We were once engaged to investigate alternate funding mechanisms for a Non-Governmental Organization. After exploring several failed conventional alternatives, an Islamic underlying structure was eventually short-listed for further investigation. It was during this investigative period that I began exploring the wider world of Islamic banking. Shortly thereafter, my curiosity turned into an obsession and within no-time I had established a full-fledged Islamic Financial Institutions Advisory Services” business that offered a comprehensive range of Islamic banking services, focusing on risk, compliance and governance related matters.

IN ANY CASE, MUSLIMS CONTINUE TO PLAY AN IMPORTANT ROLE IN SOUTH AFRICA AND NOT JUST IN POLITICS, BUT FAMOUSLY ON THE SPORTS FIELD, MEDICINE, EDUCATION, PHILANTHROPY, ACADEMIA, MEDIA AND IN ECONOMICS. THERE ARE NO FORMAL STATISTICS THAT PRECISELY SPECIFY RELIGIOUS FOLLOWINGS IN SOUTH AFRICA. HOWEVER, BASED ON SOCIAL, COMMUNITY AND ISLAMIC THEOLOGICAL ESTIMATIONS, THE NUMBER OF THE MUSLIMS ARE APPROXIMATED TO NUMBER BETWEEN ONE AND A HALF TO TWO AND A HALF MILLION PEOPLE, ROUGHLY ACCOUNTING FOR TWO PERCENT OF THE TOTAL POPULATION OF THE COUNTRY.

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FNB Islamic Banking and its CEO Amman Muhammad were honoured with the Critic’s Choice Most Trusted Brand and IRBA CEO of the Year awards for 2018 at the 4th Islamic Retail Banking Awards 2018 in Dubai.

proposition also incorporates a world class rewards programme. An FNB Islamic banking customer is afforded all the required benefits that a conventionally banked customer gets and it allows for convenient accessibility to funds using sophisticated yet userfriendly digital banking applications.

SOUTH AFRICA HAS A NUMBER OF ISLAMIC FINANCIAL INSTITUTIONS. HOW DO YOU POSITION FNB ISLAMIC BANKING IN THE OVERALL LANDSCAPE OF IBF IN THE COUNTRY, IN THE REGION AND GLOBALLY?

We take innovation to the next level by incorporating the services of our in-house MVNO (mobile virtual network operator) through FNB Connect, which, in my opinion is the only bank that I know of, that offers a customer a bank branded cellular sim card and competitive data options.

We like to position ourselves as a “One Stop Islamic Financial Services Shop”, where all of our customers’ Islamic financial needs are catered to. The time, effort and research that went into the development of our core value proposition is what sets us apart. We have depth built into what is being offered to our customer.

I believe that we have responded to our customers’ needs by delivering on a Shari’ah compliant banking offer that formally replaces the need for conventional banking products.

Over and above the expected attributes that one normally expects from a quality banking offer, our core Islamic banking

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WE LIKE TO POSITION OURSELVES AS A "ONE STOP ISLAMIC FINANCIAL SERVICES SHOP", WHERE ALL OF OUR CUSTOMERS' ISLAMIC FINANCIAL NEEDS ARE CATERED TO. THE TIME, EFFORT AND RESEARCH THAT WENT INTO THE DEVELOPMENT OF OUR CORE VALUE PROPOSITION IS WHAT SETS US APART. WE HAVE DEPTH BUILT INTO WHAT IS BEING OFFERED TO OUR CUSTOMER.

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LET US ASK AN EASY QUESTION TO MAKE THE INTERVIEW LIGHTER IN TONE AND CONTENTS. WHICH SPORTS DO YOU PLAY AND ENJOY THE MOST? AND WHY? I try to play golf. I’m not the best at it but am always trying to find time in my hectic diary to justify a round or two. I think that golfing legend Arnold Palmer captured it aptly by noting “There is no king of golf. Never has been, never will be. Golf is the most democratic game on earth. It punishes and exalts us all with splendid equal opportunity”. I’m fortunate in that two of my sons have taken up golf. In the past my wife forbade me from playing and now she encourages me to play more golf with my sons. It’s amazing how well this has worked in my favour. Furthermore, golf allows for a relaxed and comfortable environment when dealing with customers. Fortuitously, we are seeing more and more of our customers taking up the game. This allows us to interact and deal with our customers on the course. Remember a bad day on the golf course is better than a good day in the office.

DO YOU THINK SPORTS ALSO HELP IN BUSINESS BY WAY OF NETWORKING AND IDENTIFYING WIDER OPPORTUNITIES? Yes, most certainly. As noted in my previous response, sports and sporting events have a universal appeal. It creates a relaxed and comfortable environment, where bankers and customers alike can relate to each other in a different relaxed atmosphere, infinitely different to that of the boardroom. Customer meetings outside the office allow for a greater level of socializing and in that environment, I find customers tend to be much more comfortable in discussing their personal and business banking requirements.

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FNB ISLAMIC BANKING IS AN AWARD-WINNING BANK, WITH ITS MOST RECENT SUCCESS AT GLOBAL ISLAMIC FINANCE AWARDS 2018 HELD AT SARAJEVO ON SEPTEMBER 29. HOW WOULD YOU EXPLAIN YOUR SUCCESS AND RECOGNITION? Goals and objectives never materialize by themselves. They require strategically crafted plans, which, in turn require meticulous execution.

It is always easier said than done and in our case, we’ve had to re-invent our brand, re-design our product-set and infuse a sense of trust into our customer base all while on-the-move.

Social media can play a massive role in creating awareness of Islamic finance, as it has a wider reach and can target a market who are tech savvy and are engaged online. The South African Muslim community certainly meet these criteria and at best can be described as a digitally savvy market.

Mandela fought for those very ideals and principles that Islam holds sacrosanctthe idea of freedom, the fight against oppression and basic human dignity. He spent his life in the servitude of his people and at great personal cost to his own personal freedom and family, which, resulted in him being sentenced to 27 years in prison.

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WHAT IS A TYPICAL DAY LIKE FOR AMMAN MUHAMMAD? HOW DOES IT START AND HOW IT ENDS?

The advantage of social media, unlike traditional means of advertising, is that it is instant and allows you to engage with your target market.

This is no light question. You are asking me to choose between globally respected and admired icons. Being a South African, I am forced to be a little bit more biased towards the beloved father of our hard-fought democracy, Nelson Mandela.

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Today, we proudly celebrate the oldest statesman in the world in the form of Mahathir Mohamed and the memory of the great Nelson Mandela who would have been 100 years old had he lived.

The world of social media is rising at an astonishing pace. However, boosting your brand awareness via social networks is about marketing to the right people, through the right channels. It means you must find the right social media channels where your target market is.

ANOTHER LIGHT QUESTION. IF YOU HAVE TO CHOOSE BETWEEN NELSON MANDELA AND MAHATHIR MOHAMED, WHO WOULD BE YOUR PICK, AND WHY?

Valuable customer insights can be gained from such conversation and can help drive Islamic banking offerings to be more customer centric based on their needs.

THE WORLD IS FAST BECOMING ORIENTATED TOWARDS THE USE OF SOCIAL MEDIA. WHAT ROLE CAN SOCIAL MEDIA PLAY IN CREATING AWARENESS AROUND ISLAMIC FINANCE AND CREATING A VIBRANT RETAIL MARKET FOR ISLAMIC BANKING IN SOUTH AFRICA?

As we know well, nothing happens without the blessing of the Almighty, and then, meticulous execution requires a complete buy-in from the entire team. It is only when the entire team comprehends this collective dream, do we witness the magic come to life.

He chose to fight for the freedom of his people and in the end, was able to negotiate a peaceful settlement, saving South Africa from a potentially deadly civil-war.

The off-shoot of this opportunity is that you can create ‘word of mouth’ which is earned media, where your customers spark conversations on the topic of Islamic finance and banking. This not only creates awareness between friends and family, but also makes a viral conversation.

A typical day in my life can best be described as long and rewarding. When I’m not travelling, my day normally starts off with the performance of my Fajr prayer, thereafter a healthy breakfast with the family and then me taking my children to school. I have five sons, two of whom are at university and the other three are at school. The school round is an important morning ritual and allows me to spend precious ‘alone time’ with my kids while driving them to school. I normally reach office early, around 7:30 am, usually an hour before anyone else. This time allows me to tackle those issues that require quiet reflection and contemplation. Once the team is in the office, the energy picks up and before you know it, the day fast approaches an end. But not before having to deal with a variety of matters that range from segmental to individual business unit agendas and a fair share of external issues. My day also involves dealing with a wide range of key stakeholders, from customers to employees, Shari’ah scholars, the media, industry bodies, community organizations, and many more. In contrast to other executives, I am required to engage with all of them. On top of that, I have to build the business strategy and be the internal and external face of the organization through good and bad times.

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COVER STORY JUSTICE IN ALL ITS FORMS, WHETHER IT BE SOCIAL, POLITICAL OR ECONOMICS RELATED, ARE AMONG THE CORE TEACHINGS OF ISLAM, THIS IS BEST ILLUSTRATED IN THE CHARACTER OF NONE OTHER THAN THAT OF OUR DEAR PROPHET MUHAMMAD (PBUH / SAW).

Apart from South Africa, we are also operational in Botswana and aim to launch Islamic banking in other key SubSaharan geographies as well.

ON A PERSONAL NOTE WHO HAS INSPIRED YOU THE MOST AND WHY? HOW HAS THIS INSPIRATION SHAPED YOUR APPROACH TO ISLAMIC BANKING?

I strongly believe that this magnificent trail of discovery led me to the path that I am currently on. As an Islamic banker, I am convinced that deepest inspiration was presented to me through those teachings left behind by our noble Prophet Muhammad saw (PBUH).

Justice in all its forms, whether it be social, political or economics related, are among the core teachings of Islam. This is best illustrated in the character of none other than that of our dear Prophet Muhammad saw (PBUH).

ANY NEW PLANS FOR FNB ISLAMIC BANKING?

We continue to innovate in the product space and have plans to launch exciting products in both the retail and commercial environments. As far as channel is concerned, we have struck a healthy balance between human and digital customer interactions.

FNB Islamic Banking has already experienced an amazing transformation, and has fast metamorphized into a Group wide business which now offers Islamic banking across the Bankâ&#x20AC;&#x2122;s key segments, namely, retail, commercial and corporate Islamic banking.

Given the fast pace that the banking world is moving at, we continue to set the pace and are dynamic in the digital space, our digital applications are setting the benchmark in the digital Islamic banking space.

In my earlier days, as I researched the topics of Islamic trade, finance and banking; I was completely enamored by the role that justice and equality played in this part of the Islamic teachings. Since trade and economics play such a crucial element of everyday life, and particularly in my own life at that time, (I worked as a financial services institution auditor), I had been drawn into educating myself more, mysteriously guided by the precious financial and business examples and illustrations that had been left by our beloved Prophet Muhammad saw (PBUH) so many years ago.

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We have since also introduced Takaful, Islamic wealth and investment services. In doing so, we have closed the loop in terms of a comprehensive offering of core Islamic products and services that a customer would normally require.

I AM CONVINCED THAT DEEPEST INSPIRATION WAS PRESENTED TO ME THROUGH THOSE TEACHINGS LEFT BEHIND BY OUR NOBLE PROPHET MUHAMMAD SAW (PBUH).

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"PERFECT IS A CURSE. INNOVATION IS MESSY. TEST, LEARN, AND IMPROVE." SYED BALKHI

WHAT WOULD BE YOUR MESSAGE TO THE GLOBAL ISLAMIC FINANCIAL SERVICES COMMUNITY, PARTICULARLY THE YOUTH? I am particularly drawn to the notion of promoting Islamic finance as the catalyst in developing and coordinating an integrated approach focused on the promotion and development of entrepreneurship and small businesses. We, as Islamic finance practitioners, need to establish an enabling environment that supports their growth and sustainability. In an environment like ours, in Africa, self-sustainability is the key to radically transforming a sluggish economy, by forcing an effectively driven enterprise development programme promoting entrepreneurship using Islamic finance. As such the Islamic finance strategy should be targeted and easy to access. This sector is critical in addressing our continent’s key developmental goals, which ultimately include the concept of delivering sustainable livelihoods, reducing crippling unemployment and addressing the growing inequality gap, which is continually widening. There are vibrant economic business activities that need support to graduate from survival to sustainability and Islamic finance techniques can be effectively deployed to close this gap. My message is simple, Carpe Diem. Seize the day by seizing the opportunity! The only true way to get going is by doing. You don’t have the luxury of time by sitting around waiting and hoping that someone will eventually come along to help you execute on your ‘big’ idea. “Perfect is a curse. Innovation is messy. Test, learn, and improve.” Syed Balkhi

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POINT OF VIEW

THE

MILLENNIALS:

BUSINESS AND TECH WIZARDS

OR SELF-ENTITLED CLOWNS? DR. MUNEER ZUHDI

espite my familiarity with the different generation labels (baby boomers, Gen X, Gen Y, Gen Z), never before did I have to considerably think about the differences between them and what that might mean to me. The first time I really reflected about it was in the Fall of 2017 when I shared a dinner table at an industry event in China with Robert Lane, the founder of Commodore. Robert has a wealth of knowledge that comes from being an early pioneer in the PC industry and spending decades in VCs. He was very generous in sharing knowledge. It was extremely interesting and I took many mental notes as I was listening to the wisdom from the many life and industry lessons he had. One of the things he mentioned was: “beware of millennials, they will either be your competitors or employees. Either way you’ll have to deal with them.” The Millennials (aka Gen Y) are people born between 1980 and 1994. The Post-Millennials (aka Gen Z or also iGen) are people born between 1995 and 2012. They are great entrepreneurs. They have been instrumental in creating technologies and disrupting industries. An increasing number of them have been dropping out of college to pursue their billion-dollar ideas.

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POINT OF VIEW

THE MILLENNIALS (AKA GEN Y) ARE PEOPLE BORN BETWEEN 1980 AND 1994. THE POSTMILLENNIALS (AKA GEN Z OR ALSO IGEN) ARE PEOPLE BORN BETWEEN 1995 AND 2012.

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POINT OF VIEW

I had the opportunity to interact with some bright ones when I was involved in sponsoring research, delivering guest lectures, and evaluating startups in hackathons. I was always impressed with their energy and original thinking in using the latest in technology to tackle real life challenges. They are very techsavvy and great multi-taskers. But as you get exposed to a wider sample, you see the early and frequent exposure to technology comes at the expense of having less stamina, patience, and attention span. It is widely known that both Steve Jobs and Bill Gates, who pretty much created the PC industry, did not allow their kids to use PCs/tablets more than 45 minutes a day. Recently, it was announced in France that smart phones will be completely banned in schools. Another interesting observation is that when parents are successful and affluent, they tend to provide their kids early access to smart phones, tablets, and laptops. They don’t realize that the potential damage can far outweigh the pursued benefits. This reminded me of the great classic book: “The Millionaire Next Door” by Stanley and Danko. The book, which was based on years of research and surveys of millionaires, concludes that most millionaires are self-made. The traits they had that made them millionaires are rarely passed to their kids who grow up being self-entitled brats. Legendary business leaders, like Warren Buffett, chose not to pass their fortune to their kids because they wanted their kids to work hard and earn their living.

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What would be interesting to witness is what will happen in emerging economies like China and India, which have the highest increase in the percentage of millionaires and billionaires. Will they pass their work ethics to their kids and have them work hard to earn their way up, or will they get them used to the easy life and things being handed to them on a sliver plate? If they choose the latter, they are only positioning their kids for failure- even if they send them to private schools and have a job waiting for them in a family business. With the increased competition globally, it may just be a matter of time before they run down the family business to the ground.

DR. MUNEER ZUHDI IS CTO - HEAD OF GLOBAL IOT SMART CITY SOLUTION AT NOKIA. HE IS ALSO AN ADJUNCT PROFESSOR OF ENTREPRENEURSHIP & INNOVATION MANAGEMENT AT AMITY UNIVERSITY DUBAI.

The millennials and post-millennials have great opportunities ahead of them in terms of access to technology and capital. The creation of technology and success in business is no longer a monopoly in the hands of few conglomerates. At the same time, distractions are everywhere. Satellite TV, the Internet, and smartphones can create a generation of lazy, demotivated, and self-entitled clowns who lack work ethics and are only interested in having fun. We should expect to face a wide spectrum of personalities and behaviours, and either way we must be prepared to deal with them.

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POINT OF VIEW

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TAKAFUL

IN NIGERIA:

THE ROLE OF

SHARIAH

ADVISORY COMMITTEE DR. TALMIZ USMAN

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ne important requirement found in regulatory requirements in most jurisdictions is the establishment of a Committee of Shari‘ah expert by Takaful Operators (TO). Depending on the jurisdiction, the title of the expert committee varies. For example, in Nigeria the Shari‘ah expert committee is designated as Advisory Council of Expert (ACE). The Nigerian Takaful Operational Guidelines require that the TO shall before starting Takaful-Insurance operations have in placed an Advisory Council of Experts (ACE) to ensure the operations are in line with best practice. This is core requirement for issuance of operational licence by the National Insurance Commission (NAICOM), the Nigerian insurance regulator, and it will be a violation of the extant rules for any TO to start Takaful-Insurance business before the approval is obtained. The ACE is required to consist of at least three members with a mix of expertise in Shari‘ah with specialization in Fiqh al Mua’amalat and at least a member qualified and experienced in commercial financial products and services. The ACE members must be of acceptable reputation, character and integrity. The appointment or reappointment of ACE members must be subject to prior approval by the NAICOM. To minimize undue influence on the ACE, the TO is required to inform NAICOM, within 30 days, of any change and the reason for the change in the membership of its ACE. The NAICOM may require disclosure in the annual report of the TO to provide reasons for the changes in the ACE membership where the Commission deems it fit to do so in the public interest.

THE ACE IS REQUIRED TO CONSIST OF AT LEAST THREE MEMBERS WITH A MIX OF EXPERTISE IN SHARI‘AH WITH SPECIALIZATION IN FIQH AL MUA’AMALAT AND AT LEAST A MEMBER QUALIFIED AND EXPERIENCED IN COMMERCIAL FINANCIAL PRODUCTS AND SERVICES. THE ACE MEMBERS MUST BE OF ACCEPTABLE REPUTATION, CHARACTER AND INTEGRITY. THE APPOINTMENT OR REAPPOINTMENT OF ACE MEMBERS MUST BE SUBJECT TO PRIOR APPROVAL BY THE NAICOM.

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However, a window is provided for alternative arrangements to having an ACE. Any proposal for alternative arrangements must be made to NAICOM. Such alternative arrangements must be approved by NAICOM before commencement of Takaful-Insurance business. NAICOM may grant its approval if satisfied with explanation(s) as to why the ACE structure is not being adopted by the TO. This window envisages instances where it would be in the public interest to adopt the alternative arrangement for reasons of cost, competencies, level of development, etc. The ACE is incorporated into the operational and governance structure of the TO and clearly responsible and accountable for all Shari‘ah decisions, opinions and views relating to the Takaful-Insurance business. The structure shall be such that it reports directly to the Board of Directors of the TO and have a dotted line (close working) reporting relationship to the Managing Director/Chief Executive Officer of the Takaful-Insurance Operator.

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The ACE is expected to derive consensus on its recommendations and conclusions using the appropriate, standard and accepted methodology including interpretation or analogy from the Qur’an and Sunnah. To ensure proper record keeping, the conclusions and rationale of the ACE shall be fully documented in the minutes of the ACE meetings. The Takaful Operational Guidelines clearly defines the responsibilities of the ACE to include: • Review and endorsement of policies and guidelines related to the principles underpinning Takaful-Insurance.

IT IS IMPORTANT TO STATE THAT THE INTRODUCTION OF THE ACE AS PART OF GOVERNANCE STRUCTURE OF TO, WITH DIRECT REPORT LINE TO THE BOARD OF DIRECTORS, IS A GOOD SAFETY NET FOR ENSURING SHARI‘AH COMPLIANCE. THE GUIDELINES HAVING CLEARLY DEFINED THE QUALIFICATION, COMPOSITION, FUNCTIONS AND CONFIDENTIALLY ISSUES CREATE SOME LEVEL OF CERTAINTY ON THE MODUS OPERANDI AND EXPECTATION ON THE ACE

• Formal compliance certification of every product that is to be offered by the TO. • Reporting all cases of non-compliance to the Board of the TO with recommended remedial actions. • Reporting to the Commission all cases where a TO has failed to adequately address or take remedial action of non-compliance. • Providing a formal annual sign off and opinion on compliance in a Report of the ACE that is to be included in the TOs annual audited financial report.

• Assist or advise related parties to the TO, such as its legal counsel, auditors or other consultants on Islamic jurisprudence related matters upon request. • Providing support to the Takaful-Insurance Operator and participants in respect of questions or queries that may be raised regarding the Shari‘ah (Islamic Law) compliance of products. • Issue recommendations on how the TO can fulfill its social role and promotion of TakafulInsurance towards enhancing financial inclusion in Nigeria. • Performance of any other duties assigned to it by the Board of the TO.

DR. TALMIZ USMAN IS THE GENERAL COUNSEL AT NIGERIAN INSURANCE REGULATORY AUTHORITY WITH INTEREST IN PROMOTING GOOD CORPORATE GOVERNANCE & CONSUMER PROTECTION. HE IS ALSO A MEMBER OF THE TECHNICAL COMMITTEE AT IFSB.

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It is important to state that the introduction of the ACE as part of governance structure of TO, with direct report line to the board of directors, is a good safety net for ensuring shari‘ah compliance. The Guidelines having clearly defined the qualification, composition, functions and confidentially issues create some level of certainty on the modus operandi and expectation on the ACE. These will obviously enhance confidence on the Takaful insurance business by the participants and beneficiaries.

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L O N D O N

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MPLEMENTING

SLAMIC SOCIAL FINANCE:

CHALLENGES AND

PROPOSED SOLUTIONS

ASST. PROF. DR. NOR RAZINAH MOHD ZAIN AND PROF. DR. ENGKU RABIAH ADAWIAH ENGKU ALI

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ocial finance is an approach to managing investments that generate financial returns while including measurable positive social and environmental impact.1 Under the conventional practice, social finance typically involves investments in some forms of socially sensible equity or debt financing, microfinance and social impact bonds.

1. “Social Finance: What Is It and Why It Matters”; Retrieved from https://www2. deloitte.com/global/ en/pages/ financial-services/ articles/socialfinance.html; accessed on 11 Oct 2018.

As for Islamic social finance, it is found that Islam has already provided a social-based financing or investment mechanisms, which are not only able to benefit individuals but also the society at large. Islamic social finance inclusively covers the traditional Islamic instruments based on philanthropy (such as zakah, sadaqah and waqf) and cooperation (such as qard and kafalah).2 It also covers the modern forms of Islamic financial services such as Islamic microfinance, sukuk and takaful, which resonate with the objectives of solving societal challenges.

2. Islamic Social Finance Report 2015. (2015). Retrieved from:http://www.irti. org/English/News/ Documents/ ISLAMIC%20 SOCIAL%20 FINANCE%20REPORT%202015.pdf.

In short, contemporary Islamic social finance can be divided into three main categories: (a) traditional Islamic philanthropy instruments such as zakah, sadaqah and waqf; (b) cooperation-based instruments such as qard and kafalah; and (c) other modern forms of Islamic financial instruments including Islamic microfinance, sukuk and takaful. It is maintained that the proper implementation and practice of Islamic social finance will contribute to the protection and preservation of Maqasid AlShari’ah. MAQASID AL-SHARI’AH

3. Auda, J. (2008). Maqasid Al-Shariah as philosophy of Islamic Law: a systems approach. International Institute of Islamic Thought (IIIT).

In simple words, Maqasid Al-Shari’ah can be defined as the purposes or objectives behind the Islamic rulings.3 According to Al-Raysuni (1995), “Maqasid al-Shariàh are the objectives for which the Law (Shariàh) has been ordained to realise the maslahah (good) of the servants (of Allah, i.e., mankind)”. These objectives are deduced through the observation and examination of the texts of the Shariàh as a whole to render a clear and conclusive understanding about them. In a way, Maqasid Al-Shari‘ah can be considered as the supposed end results, which are intended from the application of the rules derived from Shari’ah injunctions. It is the fruit of the Shari’ah. It is also a yardstick which can be used to measure the success of the application of Shari’ah prescriptions.

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A failure in attaining Maqasid Al-Shari’ah may be perceived as an indication of less than proper application of the Shari’ah rules and a re-alignment will be necessary. Muslim jurists have different ways of classifying the objectives of the Shari’ah.4 The most prominent classifications are: (a) the classification based on level of necessity; (b) the classification based on the scope of rulings and aim in achieving certain objective; and (c) the classification based on the scope of people that are included in achieving certain objective. The first classification (i.e. based on level of necessity) is perhaps the most frequently used and referred to in discussing Maqasid Al-Shari’ah.5 This classification is normally attributed to Al-Ghazali’s description of what is meant by maslahah that translates as: “What we meant by maslahah is the safeguarding of the objective of the Law-Giver, and the objective of the Law-Giver for the creatures are five, i.e.: to safeguard for them their religion, their life, their intellect, their progeny and their wealth. Everything that guarantees the protection of these five essentials is maslahah (good); and everything that denies these essentials is mafsadah (evil) and to prevent this (evil) is maslahah (good).”

4. Auda, J. (2008), Maqasid al-Shari’ah: A Beginner’s Guide, International Institute of Islamic Thought, London.

5. Dusuki, A. W., & Abozaid, A. (2007). A critical appraisal on the challenges of realizing maqasid Al Shariaah in Islamic banking and finance. International Journal of Economics, Management and Accounting, 15(2).

Therefore, when preservation and protection of Maqasid Al-Shari’ah is mentioned, it is normally understood as the preservation and protection of deen (religion), nafs (life), nasl (progeny), ‘aql (intellect), mal (property). Some other scholars add ‘ard (honor) into the list. It is argued that the six essentials above can be protected and preserved through the Islamic social finance and its instruments. For example, through Islamic microfinance, a small scale micro-credit can be initiated using Shari’ahcompliant instruments. A sustained provision of such micro-credit facilities creates businesses and employment opportunities for members of the society. Simultaneously, it increases financial inclusion, boosts income and production, as well as provides job. This leads to better socio-economic conditions, higher quality of life, and improvement in the general well-being of people and their survival; hence, the protection and preservation of nafs (life).

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In addition, the traditional Islamic social finance instruments of zakah, sadaqah and waqf have the potential of supporting not only alleviation of poverty, but also educational infrastructures such as schools and universities. These are the golden gates of knowledge that allow for the nurturing and preservation of intellectual capabilities (‘aql). With the combined opportunities of employment and education, other societal challenges can be tackled. These include alleviation of poverty; elimination of abuses towards the vulnerable, women and children, in particular; and overcoming of other social ills like crimes, drug addiction and prostitutions. These will strengthen families and homes, ensuring the protection and preservation of nasl (progeny) and ard’ (honor). Instruments, such as takaful can be aptly utilised to provide protection in facing calamity; while socially responsible investment (SRI) or green sukuk can be used to protect the environment for future generation. Similarly, Shari’ah-compliant social impact bonds (SIB) or SRI sukuk can also be utilised to develop social development programs to rehabilitate delinquents towards positive and religious values so that they can normalise into lawabiding citizens. These efforts could potentially lead to reduction of mischief (mafsadah) in the society and promotion of good conducts among the people. At the same time, religious and moral consciousness can also be inculcated through similar programmes to up-lift the spiritual and moral state of the people for a better and morally up-right society. This will contribute to the protection and preservation of deen (religion) among the general public. CURRENT PRACTICES OF ISLAMIC SOCIAL FINANCE

Islamic social finance has its presence among the OIC member states, which consist of 52 countries (OIC, 2016). The OIC member states are progressively practicing the Islamic social finance and utilising its instruments. Listed below are some of the practices of Islamic social finance by the OIC member states: • ZAKAH, SADAQAH, AND WAQF

These instruments of Islamic social finance are already practiced widely in OIC member states. However, the administration and management of these instruments may require further improvements to increase efficiency and impact.

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The said instruments are also majorly used as funds for Islamic microfinance issued by the religious authorities.6 • KAFALAH

An orphanage sponsorship based on kafalah is consistently done in Indonesian Aceh Pidie and Aceh Utara, especially since the aftermath of 2004 tsunami tragedy. It is known as Orphan Kafalah programme. The programme is a collaborative initiative by the Islamic Development Bank (IDB), the OIC and zakah management institutions. The total fund collected for the programme reached IDR 10.9 billion.7 The said programme with contribution from the Baitulmaal Muamalat (one of the zakah management institutions) also provides training and rehabilitation programmes. It covers activities such as handicraft, machine repairing, hand phone services, tailoring skill and basic computer training. • ISLAMIC MICROFINANCE

Initiatives based on Islamic microfinance are developed in countries such as Nigeria8 and Pakistan9 for alleviation of poverty. Earlier, Malaysia and Indonesia have adopted similar instruments for small scale businesses and investments.10 • SUKUK

The first green sukuk was issued in 2012 for a 50MW photovoltaic project in Indonesia. The said sukuk was structured out of Labuan, Malaysia. Its funding was entirely based on a power purchase agreement.

6. Obaidullah M. (2008) “Role of Microfinance in Poverty Alleviation: Lessons from Experiences in Selected IDB Member Countries” Islamic Research and Training Institute, Islamic Development Bank, p61

7. BMM. (2016). Retrieved from: http://www.baitulmaalmuamalat.org/ language/en/whatwe-do-2/program/ special-empowerment/orphan-kafala/

8. Hassan, M. K. (2010). An integrated poverty alleviation model combining zakat, awqaf and microfinance. A Paper presented at Seventh International Conference–The Tawhidic Epistemology: Zakat and Waqf Economy, Bangi, Malaysia. IDB. (2016). Retrieved from: https:// sustainable development.un.org/ content/ documents/10289. pdf.

9. Akhter, W., Akhtar, N., & Jaffri, S. K. A. (2009). Islamic micro-finance and poverty alleviation: A Case of Pakistan. Proceeding of the 2nd CBRC, Lahore.

10. Abdul Rahim, A. (2010). Islamic microfinance: an ethical alternative to poverty alleviation. Humanomics, 26 (4), 284-295.

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The companies responsible for the project (Solar Guys International and Mitabu) managed to collect an amount of AUS$100 million for the project investment.11 Later in 2015, the United Arab Emirates (UAE) followed such footstep with a plan to issue green sukuk for renewable energy project. The sukuk was planned to be issued by the Dubai Clear Energy Business Council and the Dubai Supreme Council of Energy. With similar interest, the IDB indicated that they preferred to issue sukuk for climaterelated projects. Such indication was made in the United Nations Global Warming Conference 2015 in Paris. In July 2017, Tadau Energy Sdn Bhd issued Malaysia’s first SRI Green sukuk under the Malaysian Securities Commission SRI sukuk framework. The RM250 million Green SRI Sukuk Tadau was to finance the construction of large scale solar photovoltaic project of 50MW in Kudat Sabah, with a tenure of 2 to 16 years. Following the success of Tadau Sukuk, Quantum Solar Park Malaysia Sdn Bhd launched another green SRI sukuk of RM1 billion in October 2017 to fund the construction of Southeast Asia’s largest solar photovoltaic plant project in three districts: Kedah, Melaka and Terengganu. Indonesia then became the first country to issue a sovereign green sukuk in February 2018 with a US$1.25 billion, fiveyear sukuk to finance climate or environment related projects, such as renewable energy, sustainable transport, waste management and green buildings. • TAKAFUL Takaful has the potential to be developed as a sustainable safety net for the society at large by providing protection for basic needs, especially at times of calamity such as a tsunami or an earthquake. In Indonesia, proposals for micro-takaful has been made for people with low income.12 The micro-takaful also has potential to be applied in post-war Iraq.13

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CHALLENGES IN IMPLEMENTATION ISLAMIC SOCIAL FINANCE

It is clear that Islamic social finance has a huge potential to be used for protection and preservation of Maqasid Al-Shari’ah. However, there are several problems that need to be addressed in the implementation of Islamic social finance in OIC member states. First, there is absence of standardisation of laws for collection of zakah, sadaqah and waqf in a number of OIC member states. When laws are not standardised within a country, it will affect the effectiveness of fund collection. Inevitably, it can grossly affect the distribution of fund to the suitable candidates. The same problem can be found in laws relating to waqf. Without adequate law to monitor the creation of waqf, the status of waqf can be easily refuted. In addition, proceeds from the waqf assets can be easily misappropriated by unscrupulous parties. Another challenge is the refusal to pay zakah. Although zakah is one of the five essential pillars of Islam where it is compulsory to be paid by those who are qualified, there are a lot of cases where people simply refuse to pay zakah. Lack of enforcement in terms of zakah collection, further exacerbate the problem. Moreover, in many OIC countries, there are no incentives given to zakah payers where the zakah payment is not tax deductible, resulting in double taxation effect on them. Corruption and mismanagement is one of the problems faced when it comes to implementing Islamic social finance effectively. Without proper laws, the administration of collected funds or management of assets cannot be implemented properly. This may open the doors for corruption, mismanagement and misappropriation of the funds and assets.

11. MIFC. (2016). Retrieved from: http://www.mifc.com/ index.php?ch=28&pg=72&ac=162&bb=uploadpdf

12. Haryadi, Agus. (2006). Developing microtakaful in Indonesia. Second International Convention on Takaful and Retakaful, Vol. 23. Kuala Lumpur.

13. Hasim, Haslifah Mohamad. (2014). Microtakaful as an Islamic Financial Instrument, for Poverty Alleviation in Iraq. Middle-East Journal of Scientific Research, 21 (12), 2315-2325.

Conflicts within or between countries are sadly continuing in the OIC member states. This can be seen in the conflicts in Syria, war in Yemen, Palestine-Israel conflicts, the sanctions against Qatar, and unrests in a number of other countries as well.

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There is also the issue of lack of skills and inadequate follow-up in doing business or investment. Without proper skills and training, the failure rate in the business ventures or investment is potentially higher. This will be very detrimental to the success rate of microcredit initiatives, regardless of the amount of microfinancing given through such programmes. Another important challenge is the absence of records or reliable database. Often, there is an absence of reliable database on those who are in need. Without proper records, the needy will go undetected and the distribution of funds or proceeds will not reach the right people for whom the funds are intended to help. POSSIBLE SOLUTIONS

In finding solutions for the problems in implementing the Islamic social finance in OIC member states, it is important to realise that every country is unique. One country’s problems are often not similar with those of another country. Hence, it is perhaps not wise to apply a “one-size fits all” approach to solve the problems listed above. However, a few general suggestions are proposed here for consideration of the OIC member states. In light of the absence of standardised laws for collection of zakah, sadaqah and waqf, the relevant authorities should be alerted on the need to standardise the laws. As for the issue related to the refusal to pay zakat, appropriate enforcement mechanisms should be implemented by the relevant authorities, subject to the applicable legal provisions in the country. Incentives should also be given to zakat payers, for example, through income tax deduction to prevent double taxation.

Such conflicts not only cause losses of life but also disturb the preservation and protection of other elements of Maqasid Al-Shari’ah. It is observed that the availability of funds differ greatly from one country to the other. Some countries with good economic standing may manage to collect higher amounts of funds, whereas, some other countries with lower economic strength may have less in term of available funds. This is greatly exacerbated by the lack of or no coordination among OIC member countries. Without proper coordination among the countries, funds may be unnecessarily concentrated at places where they are least needed; whilst the places in dire need of the funds are denied access.

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In handling corruption and mismanagement, a proper processes and appropriate governance system must be put in place to prevent, detect and report corruption and mismanagement. Independent investigation should be carried out in cases of corruption and mismanagement, without fear or favour. Whistle-blowers and witnesses must be protected from any possible threats. Appropriate punishment should be imposed by the laws to penalise wrongdoers and adequately deter future misconduct.

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The OIC must play an aggressive and effective role in making peace and resolving the conflicts within or between countries. Such action must be done without fear or favour. Necessary intervention is needed to stop a conflict, such as, the prolonged war in Syria. Concerted efforts must be made toward effective mobilisation and management of humanitarian funds, as well as proper channelling of the same to the needy in conflict areas, displaced communities and refugees. It is essential for all member countries to overcome political differences and sectarian conflicts. The solidarity among Muslims must be strengthened. Coordination among countries must be arranged to allow for effective collection and allocation of funds based on actual needs regardless of the political borders. Fund raising may not necessarily be charitable, but can be in the form of investments from one country to the other. Proper arrangements for humanitarian aid and specific socio-economic projects to assist the less fortunate Muslims should be done. Strategic management of the collected funds must be employed to ensure long-term sustainability of available resources. In addressing the lack of skills and inadequate follow-up in doing business or investment, necessary trainings should be conducted for those who are involved in business or investment funded through the Islamic social finance instruments. This is important to increase the potential of success for the business or investment. Continuous follow-up through one-to-one or group meetings should be made to identify problems and find solutions. Follow-up workshops and seminars may also be necessary to further build skills and technical knowledge. The absence of records or reliable database can be addressed via the usage of technology. Comprehensive database must be developed to keep track of the records of socio-economic conditions of the population. The advancement in technology can be leveraged to automate and analyse the collected data using big data analytics and artificial intelligence, so that relevant policy decisions and strategies can be planned and implemented.

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WAY FORWARD

The preservation and protection of Maqasid Al-Shari’ah, which majorly focus on the six essentials (religion, life, progeny, intellect, property and honor), are important in preventing mischief (mafsadah) in the society. It is also crucial in ensuring public interest and public good (maslahah). Undoubtedly, the effective application of Islamic social finance will contribute towards the preservation and protection of Maqasid Al-Shari’ah. Focusing on the practices of OIC member states, it can be said that some of the OIC member states are already on the right track in implementing the Islamic social finance. If implemented properly and holistically, they can ultimately achieve the preservation and protection of Maqasid Al-Shari’ah. However, as pointed out above, there are problems that are hindering the effective and impactful implementation of Islamic social finance. These problems must be properly identified and solved. Within the limited space of this write-up, only a cursory mention of some of the problems is made. Due to the unique circumstances of each of the OIC member states, the problems may vary from one country to the other. The proposed solutions for the listed problems are not exhaustive, but they are hopefully able to provide some impetus; or at least, some insights towards better solutions, moving forward.

DR. NOR RAZINAH MOHD ZAIN IS AN ASSISTANT PROFESSOR AT IIUM INSTITUTE OF ISLAMIC BANKING AND FINANCE.

PROFESSOR DR. ENGKU RABIAH ADAWIAH ENGKU ALI IS A PROFESSOR AT IIUM INSTITUTE OF ISLAMIC BANKING AND FINANCE.

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PERSPECTIVES

EDUCATION AND THE GLOBAL IMPACT OF THE FOURTH INDUSTRIAL REVOLUTION The Fourth Industrial Revolution (4IR), underpinned by technology, is undeniably having a transformative impact on the economy, industry and society as a whole. Emerging new technologies such as artificial intelligence, intelligent robots, big data, quantum computing, genetic editing and virtual reality have blurred the lines between the physical, digital and biological aspects of life. It is changing everything from the way we live, work, communicate and inevitably what it means to be human.

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The evidence of dramatic change is all around us and itâ&#x20AC;&#x2122;s happening at an exponential speed. But what is more apparent is that the interwoven of technology into every aspect of our lives has become a norm. Thanks to social media platforms and apps; we now have the ability to connect with others easily and faster, and with wider choices on how to communicate. Innovations brought about the 4IR have the potential to not only create a true global village by bringing billions more people into the global economy, but also give more people opportunities to learn.

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PERSPECTIVES

A REPORT FROM THE WORLD ECONOMIC FORUM (2016) ON THE FUTURE OF WORK STATES THAT, “65% OF CHILDREN ENTERING PRIMARY SCHOOL TODAY WILL ULTIMATELY END UP WORKING IN COMPLETELY NEW JOB TYPES THAT DON’T YET EXIST.”

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With technology rapidly changing our economic, cultural and social realities, the question of how to prepare the younger generation and re-educate the current generation for these changing realities has been a pressing issue for contemporary higher education. Raising concerns over automation replacing jobs are rife. A report from the World Economic Forum (2016) on the future of work states that, “65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist.” How do we educate for the fourth industrial revolution? What are the implications for learners and educators? How do we redefine career readiness and better prepare students for an uncertain future? Are our education systems and programmes relevant to the fourth industrial revolution? And if not, how do we reconstruct our education systems so that they are? A recent report by The Economist: Intelligence Unit on “The Automation Readiness Index: Who is ready for the coming wave of automation?’ pointed out that very few countries have begun to address

the impact of automation through educational policy. According to the report, “…in all but the highestscoring countries, little has been done to prepare future workers through school curricula or, just as importantly, teacher training. At the same time, some experts warn that a focus on soft skills would be a distraction in countries where basic education is still not up to scratch.” Interestingly, the World Economic Report on the Future of Jobs revealed that CEOs placed a high value on creativity-based skills such critical thinking and collaboration above STEM and digital skills. This implies that with technological advancements, there is an increasingly need for human to demonstrate skills that robots do not have. But is our current education system preparing young people for the 4IR? In reality, most schools and universities are teaching a 20th-century education to young people who need 21st century skills. But just as important what skills learners will need to navigate through disruptive technologies, is what skills will educators need and how their role will change.

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PERSPECTIVES

PERSPECTIVES ISFIRE ASKED PROFESSIONALS IF THEY THINK THE CURRENT EDUCATION SYSTEM IS KEEPING UP WITH THE 4TH INDUSTRIAL REVOLUTION. HERE IS WHAT THEY HAD TO SAY. DR MOHAMED ASHRAF IQBAL FOUNDER & CEO, MINDSPRING operations. The efficacy of the education system was validated through rising employment, wages and ultimately overall standards of living both in the developed and developing world with Malaysia being a huge benefactor. The third industrial revolution (computers and automation) rolled through almost as a natural extension, a creative improvement rather than destruction, of the second industrial revolution and as such the adjustments required on education was marginal focusing on the updating of and introduction of new subjects into the curriculum (eg: learning computer programming and how to use computer aided design software). I4 on the other hand is not as an extension of I3 but instead is already pushing the word into a new cycle of creative destruction, the signs of which can already be seen. We are now into the second decade of wage

The issue of readiness for Industry 4.0 or I4 is being keenly discussed and the role education and its method of delivery is seen as a critical component in helping society transition into I4. The current form of education was in response to the creative destruction brought about when the world transitioned from the first industrial revolution (mechanisation powered by water & steam) to the second industrial revolution(mass production powered by electricity), which required standardisation of knowledge (reading, writing, arithmetic) in order of people to ready to work in mass-assembly type

stagnation, jobs are being atomised and the gig economy is becoming mainstream. The question at hand therefore is, how ready is the education system to prepare society for (a) the new types of skills that will be demanded by the 14 economy and also (b) to help the millions of workers who will be made redundant as a result of the replacement of humans buy computers, algorithms and robots. Just as was seen at the start of the second industrial revolution, the response to I4 cannot be a tweak or an extension of the current education system. It will require a complete reexamination and the creative destruction of the current mode of education that was designed to supply the industrial world factory ready employees. Contrary to this, the education system under I4 will need to deliver to the knowledge economy â&#x20AC;&#x153;digitally minded, problem solvers.

H.E. JACOB AL ABDULLAH FOUNDER AND CHIEF EXECUTIVE OFFICER, CONSUL to work in regards to the many social, economic, and political challenges we face globally. New ways of educating and learning also allow us to develop humancentric capacities such as creativity, logical deliberation, and problem sensitivity; which are necessary in order to thrive with these profound changes upon us. In addition, new open digital platforms are expanding global access to education at an exponential rate, and they are also enabling much needed experiential learning opportunities. I fully expect advances in augmented and virtual reality will improve experiential learning as well. Industry 4.0 presents many challenges in regards to future skills and capacity development, but it also presents us with numerous solutions that far exceed the challenge.

Innovative opportunities presented by the Fourth Industrial Revolution (Industry 4.0) are often centred upon the convergence of digital, physical, and biological systems. Education amidst these advancements has often been regarded as a challenge. However, Industry 4.0 also offers many new opportunities for learning that have not previously been available. Through digitization we now have the opportunity to access the collective intelligence of billions of individuals instantaneously, putting that knowledge

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PERSPECTIVES

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HARTINAH ANNUAR DIRECTOR, CURRICULUM AND ASSESSMENT, CORPORATE TEACHING & LEARNING, INTI INTERNATIONAL UNIVERSITY & COLLEGES Taking Education 4.0 as the ideal response to the needs of Industry 4.0, where education can fully benefit from connectivity via digital technology, sharing of content and the ubiquity of personalized data; when learning is democratised - not bound by time and space, personalised and collaborative, focus on real world skills, and most importantly, ownership of learning lies with the students where their input is key in the design of curricula and learning pathways; then the current state of education, to a certain extent, is somehow keeping up with Industry 4.0 but not for long. This is because the much needed shift from the current model of education of mass production to mass personalization of curricula, content and learning experience is not happening fast enough. The speed of innovation that comes with Industry 4.0 is unprecedented; like none other seen nor experienced before. Hence, policy makers and educators alike, must come to fully accept that the process and ways of learning must change since the future of learning is driven by connectivity and collaboration. Policy makers and educators must walk the talk in order to keep pace with Industry 4.0 â&#x20AC;&#x201C; they need to start connecting and collaborating.

IBRAHIM SANI CHIEF HUMAN RESOURCE OFFICER, DEPARTMENT OF PETROLEUM RESOURCES, NIGERIA However, Industry 4.0 also offers many new opportunities for learning that have not previously been available. Through digitization we now have the opportunity to access the collective intelligence of billions of individuals instantaneously, putting that knowledge to work in regards to the many social, economic, and political challenges we face globally. New ways of educating and learning also allow us to develop human-centric capacities such as creativity, logical deliberation, and problem

sensitivity; which are necessary in order to thrive with these profound changes upon us. In addition, new open digital platforms are expanding global access to education at an exponential rate, and they are also enabling much needed experiential learning opportunities. I fully expect advances in augmented and virtual reality will improve experiential learning as well. Industry 4.0 presents many challenges in regards to future skills and capacity development, but it also presents us with numerous solutions that far exceed the challenge.

DR MERVAT BAMIAH ADVISORY COUNCIL MEMBER, SKY COMPUTING PVT. LTD. We are in the era of human and machines aligned together to enable new possibilities, besides the existence of online platforms and e-commerce which requires a transformation of traditional education by exploiting the potential of digital technologies, personalized data and open sourced contents. Traditional education, old-fashioned curriculum must improve to cope with the Fourth Industrial Revolution demands. In order for Education 4.0 to meet the needs of Industry 4.0, which incorporates Artificial Intelligence, IoT, Big data and Cloud computing; it should be designed as personalized and blended learning depending on tech-teaching customized according to each level for all types of education.

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DR. ARAFAT EL MOURAD VICE-PRESIDENT, HEAD OF SOURCING, EMIRATES NBD From hunter gatherers to industry 4.0… Indeed we have come a long way! The world is changing at a rapid pace and people need to contemplate this change. To meet the pace of the soaring trends, educational system needs to meet the requirements of the business. The curriculum at the institutions must be adaptable to the new revolution. With the advancement of Industry 4.0, it won’t be a surprise that plenty of jobs will be obsoleted. New jobs will be invented that has to be overpowered with the mastery of learning outcomes in harmony to the new business.

SOON LOO CEO, BRUNEI ECONOMIC DEVELOPMENT BOARD The importance lays in teaching people how to learn. Industry 4.0 is a sign of the ever-increasing paces that the world is changing today – signaling the increasing demand on us. More so the knowledge itself, the ability to learn is one of the key component of education of the future.

TALAL KARIM ALOBAYD PRINCIPAL PORTFOLIO MANAGER, ISLAMIC CORPORATION FOR THE DEVELOPMENT OF THE PRIVATE SECTOR, MEMBER OF THE ISLAMIC DEVELOPMENT BANK GROUP I wanted to offer my thoughts on this from a different perspective; the current workplace educational pace. I am blessed to be part of an international institution that avails to me the opportunity to engage and interact with different companies of different characteristics throughout the world. Unfortunately, a common theme for most that I see, especially within our areas of care, seem to be a low immersion of the current staff with the concept of “Industry 4.0” such as the Digital Economy, Fintech, Blockchain, Big Data, Cloud Computing and AI. As such, I think companies have to really push these new concepts and train their current staff to enable sustained growth and ensure survivability of their firm.

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ELRASHEID AHMED A. ELKHOTASANI CHIEF HUMAN CAPITAL DEVELOPMENT ADVISOR, GLOBAL REGIONAL DEVELOPMENT OFFICE â&#x20AC;&#x153;NORTH AFRICAâ&#x20AC;? For the education system to respond to the needs of Industry 4.0, a readjustment approach is required. This, however, has yet to transpire. Towards this end, centres of learning excellence should conduct a proactive and an interactive due diligence assessment including thorough review of its digitalized learning, education, development and capabilities; with a view to ensure that its curriculum and syllabus contents remain relevant and competitive. An important element of the new curriculum would be to incorporate technical orientated know-how framework that will support and safeguard social communities and human capital development needs as well as empower social responsibility. For the education system to keep up with the Industry 4.0 agenda; learning, development centres, educational institutions and professional qualifications granting bodies should mutually focus and concentrate on encapsulating within its learning curriculums and academic syllabus an objective to embody the changes brought about by Industry 4.0 and beyond. The acquired qualitative modification to be inserted to the curriculum and syllabus must be geared up to leverage and expand the profound tools of analysis derivatives. Such tuning up would positively enable talent research-focused mindset to therefore easily adapt and proactively interact within the status quo of the impactful performing future-action orientation emerging from the industrial revolution.

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PERSPECTIVES

MBRID

ISFIRE PERSONALITY

IFLP CAMBRIDGE-IFLP ALUMNI (2018)

TOYIN KEKERE-EKUN CEO, Lotus Financial Services Limited

WHAT WAS YOUR EARLIEST AMBITION?

WHAT ARE YOU MOST PROUD OF IN YOUR CAREER?

I wanted to be an accountant since I was 15 years old after falling in love with the subject a year earlier.

Being part of the advisory team for the first sovereign sukuk issued in Nigeria in 2017.

WHAT ARE YOU PASSIONATE ABOUT?

WHAT DO YOU DO WHEN YOU ARE NOT WORKING?

Encouraging more people to embrace Islamic finance in Nigeria. Although many are conscious of the religious pillars, not much attention is paid to our financial decisions.

Bond with family and friends, watch favourite TV series, attend dance classes, read novels.

WHO HAS BEEN YOUR GREATEST MENTOR? I have 2 mentors actually. My first mentor was Wale Oyedeji, former Executive Director of GTBank who gave me great advice in the first decade of my career. Another personality who has been instrumental in my growth is Hajara Adeola, founder and Managing Director of Lotus Capital.

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I WOULD LIKE TO BE A PSYCHOLOGIST AS I'M INTRIGUED BY HOW OUR MINDS WORK OR GUIDANCE COUNSELLOR FOR YOUNG LADIES.

I S F I R E P E R S O NA L I T Y

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I S F I R E P E R S O NA L I T Y

ISFIRE PERSONALITY

WHAT HAS THE MOST SATISFYING MOMENT IN YOUR LIFE BEEN? Performing hajj recently. It was a very emotional, spiritual and physical experience. I can go on and on if I don’t stop here…

IN ONE WORD, DESCRIBE YOURSELF. Dependable.

WHAT IS YOUR FAVOURITE QUOTE AND WHY? “if you think you can or can’t, you’re right.” This quote shows that everything begins with our minds. If we believe and have faith in ourselves, we can achieve more than we ever dreamed of.

IF YOU COULD GO BACK AND GIVE YOUR 21-YEAR OLD SELF A VALUABLE PIECE OF ADVICE, WHAT WOULD YOU SAY? Take more risks, be confident in yourself and learn some street smarts!

WHAT IS YOUR LEADERSHIP PHILOSOPHY? I advocate leadership by example – say it, live it. This builds trust which is essential. It is also important to learn the art of balancing being firm with being fair and approachable

WHAT DRIVES YOU IN YOUR PROFESSIONAL LIFE? I put in my best in most things and also enjoy mentoring.

IF YOU COULD MEET A FAMOUS PERSON/LEADER/CELEBRITY, WHO WOULD HE/SHE BE AND WHY? President Barack Obama. He consistently beat all the odds to achieve such great goals, and still remains extremely gracious and humble…with his integrity intact.

''IF YOU THINK YOU CAN OR CAN'T, YOU'RE RIGHT.'' THIS QUOTE SHOWS THAT EVERYTHING BEGINS WITH OUR MINDS.IF WE BELIEVE AND HAVE FAITH IN OURSELVES, WE CAN ACHIEVE MORE THAN WE EVER DREAMED OF.

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I S F I R E P E R S O NA L I T Y

IF YOU RETIRED TOMORROW AND WANTED TO START A DIFFERENT SECOND CAREER, WHAT WOULD YOU DO? I would like to be a psychologist as I’m intrigued by how our minds work or guidance counsellor for young ladies.

YOU ARE AN ALUMNI OF THE CAMBRIDGE ISLAMIC FINANCE LEADERSHIP PROGRAMME. HOW WAS YOUR EXPERIENCE ATTENDING THE PROGRAMME? It was a fantastic programme, which creatively combined learning and fun. We got to enhance our leadership skills and learn new ideas by engaging with industry experts, we channeled our competitive spirits through different activities, formed new relationships with contemporaries from various countries, and all the while savouring the beauty of Cambridge!

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MBRID

IFLP

July 07 - July 12, 2019

WHY CAMBRIDGE ISLAMIC FINANCE LEADERSHIP PROGRAMME? The leadership programme prepares the next generation of leaders by providing them with a unique mentoring opportunities, rigorous leadership training from renowned leaders as well as industry-specific case studies in Islamic finance.

WHO SHOULD ATTEND?

The Cambridge-IFLP aims at bringing Islamic banking and finance professionals in the middle and upper middle management positions, to the prestigious University of Cambridge for a period of 5 days, with a view to offer them an opportunity to become members of the most prestigious mentoring programme in Islamic banking & finance.

SALIENT FEATURES LEADERSHIP TALK: Covers a wide range of topics including structuring and product development, human resource development and leadership. LEADERSHIP INTERVIEW: Leading personalities share their personal perspectives on leadership in this unique one-on-one interview. LEADERSHIP ACTIVITIES: Identify leadership skills and traits in a fun way. CAMBRIDGE CASES: Delegates apply their theoretical knowledge, develop team skills, and develop solution-oriented decision making SOCIAL ACTIVITIES: There will be numerous social activities, allowing the delegates to interact with each other and with mentors. These include a Garden Party, Punting, and a Leadership Walk, among many others.

http://cambridge-ifa.net/ CONTACT US AT: info@cambridge-ifa.net

POINT OF VIEW

DATA DRIVEN

ORGANISATION:

IT’S NOT JUST AN

IT PROJECT DR. FAROUK ABDULLAH, DATA SCIENCE MARKET MAKER

icture this. You push back in your office seat at the end of a long hard week. You take a deep breadth as you reflect on the journey your team took in the successful technical implementation of your new CRM system. It comes at the end of your 2-year IT roadmap that includes the deployment of an automated marketing platform and a state of the art data management platform that consolidates all digital customer touchpoint data. In the next coming months your organisation will have access to customer data that you’ve never had before, so what now? DATA, DATA EVERYWHERE…

Your organisation is one of many worldwide experiencing the pressures of operating in a data driven era where the sheer quantum and velocity of data will send ripples throughout the whole organisation. The options for your organisation are simple, ignore the new found access to information and continue to work the same way as you have been (obviously more efficiently with all the hardware you’ve installed) or adopt the new way of working.

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The latter would mean a root and branch review of how information is consumed across the organisation. Build your data driven organisation around the customer experience and be prepared to break down the traditional business silos. Here are some factors you should consider to understand your organisation’s data and analytics maturity level. INFORMATION IS KING BUT USE IT WISELY…

Start with understanding your current information usage, rationalise your reports. Be brutal, the best way to approach this is to stop sending out the reports and wait for the screams. Stay focused as this exercise shouldn’t take more than a month and as a rule of thumb strategic reporting shouldn’t be more than 5 reports. Also consider other methods of displaying data. There are lots of off-the-shelf plug and play products out there. DON’T UNDERESTIMATE THE NEED TO REPOSITION YOUR ORGANISATIONAL CULTURE…

Changing your organisation’s culture will probably be your biggest challenge. Analytics shouldn’t be only accessible to the selected few and neither should it be only applied for large business initiatives. Integrate analytics into the daily business cadence. Start from the applying analytics to basic reports (scenario building) moving to more complex propensity models. You know you’ve matured when analytics contributes to the overall business planning and strategic development process. TALENT IS IMPORTANT…

“90% of today’s data was created in the last 2 years”, an often used quote in the Big Data world. So how much have you invested or evolved your data and analytics talents in the last 2 years? When it comes to your analytics people, you need to break away from the traditional data scientists plotting world domination in the corner of the office. Today’s successful analytics teams are business objective aligned and is a mix of capabilities and skills; typically consisting of 4 characteristics the data junkie, the story teller, the data scientist and the commercial minded. LASTLY, GOVERN NOT POLICE…

Lastly, ignore data governance at your peril. Organisations that haven’t grasped the importance of understanding data lineage often get caught in discussions relating to “which data is right” as oppose to what is the best use of our data. Appoint a data steward that maintains data integrity, validity and quality including ownership of the end-to-end data process. Remember the role is to govern and not to police!

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POINT OF VIEW

ELON MUSKâ&#x20AC;&#x2122;S

MASTERY OF

SALES SUCCESS HASSAN ALI

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rom failures to super hero status, Elon Musk is the equivalent of a real-life Iron Man. Creating 3 separate billion dollar companies. Each company solves different world problems with innovative solutions. Elon Musk, one of the most influential entrepreneurs on the planet, with his estimated US$21 billion net worth, it’s fair to say that he has achieved big things in business. If you examine his career, you can discover all sorts of ways to improve sales performance. How has Musk achieved such huge success throughout his career? The key is that he’s a talented salesperson at heart. As a result, his companies look to improve sales techniques regularly. You can see this in many of the interactions that Musk has with others. This article highlights Elon Musk’s problem solving and will examine some of Musk’s best advice and help you come up with some ideas to increase sales in the process.

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POINT OF VIEW

ELON MUSK, ONE OF THE MOST INFLUENTIAL ENTREPRENEURS ON THE PLANET, WITH HIS ESTIMATED US$21 BILLION NET WORTH, IT’S FAIR TO SAY THAT HE HAS ACHIEVED BIG THINGS IN BUSINESS.

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PROBLEM: Existing batteries were expensive and inefficient to produce.

SOLUTION: Used “First Principles Thinking” to create new batteries completely from new raw materials.

PROBLEM: First he could not find an appropriate payment method to pay for goods bought on the internet.

SOLUTION: He created PayPal, which revolutionized the way goods were paid for on the internet.

PROBLEM: He was not happy with how the world’s vehicles, ultimately customers, were dependent on raw unclean fuels.

PROBLEM: Space Travel was considered very out of reach due to expensive materials and no-reusable rockets.

SOLUTION: Build fully and rapidly reusable rocket to reduce the cost of Space Travel. And in time, Musk wants to build a city on the Red Planet!

SOLUTION: Offered innovative solutions as the CEO of Tesla. He launched electric super sports car, which paid for production of luxury cars, which are now cars for the mass market.

PROBLEM: Customer satisfaction was very low for major car manufacturers from their car dealerships, sales, re-sell and servicing model.

SOLUTION: Revolutionised the model for car dealership, service and re-selling model by listening to the customers and innovating customer service using “First Principles Thinking”.

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PROBLEM SOLVING

ELON MUSK’S REMARKABLE PROBLEM SOLVING IN DIVERSE FIELDS

PROBLEM SOLVING

POINT OF VIEW

HIGHLIGHTS & SECRETS

POINT OF VIEW

WHAT CAN THE ELITE SALES PERSON LEARN FROM ELON MUSK? HERE ARE JUST A FEW OF HIS HIGHLIGHTS AND SECRETS.

DON’T HIDE FROM CRITICISM - TAKE ACTION WITH CUSTOMER COMPLAINTS

Musk prefers to focus on the power of word of mouth. In a recent letter to shareholders, Tesla’s management explains how this works.

It all started on Twitter. Musk often finds himself interacting with people on the social media platform towards the end of his day. One such interaction was eye-catching because of the immediacy of Musk’s action.

“As more people see our car on the road, take a test drive or talk with another Model S owner, more demand is created for our product,” says the letter. It goes on to speak about the effects of this sales strategy. “Importantly, we are seeing orders in a particular region increase proportionate to the number of deliveries,” the letter continues. “[This] means that customers are selling other customers on the car.”

A Twitter user sent Musk a message, telling him about an unpleasant experience in a Tesla dealership. She made particular note of the pushiness of the salesperson. Musk took immediate action. Within an hour, he had responded to the Tweet with a simple message: “Def not OK. Just sent a reminder to Tesla stores that we just want people to look forward to their next visit. That’s what really matters.”

With this message, Musk highlights two ways to improve sales performance. Firstly, the action he took on the customer’s behalf generated a positive buzz around the Tesla brand. That customer, and those who read the Twitter exchange, see a leader in action. This makes them more likely to explore Tesla’s products further, which would improve sales. Furthermore, the exchange also shows how Musk tries to improve sales techniques at Tesla. He identifies a sales issue and takes immediate action. In doing so, he ensures his company’s representatives understand exactly what he expects from them, ultimately making them more effective salespeople.

So how can you use this to improve sales techniques at your company? It’s simple. Focus as much on your existing clients as trying to attract new customers. Some would even argue that your existing clients are more important. After all, they’re the people who have already bought your product. If they’re satisfied, they will come back for more.

A HAPPY, DELIGHTED AND LOYAL CUSTOMER WILL RECOMMEND YOUR BUSINESS TO OTHERS. AS A RESULT, YOUR SALES GO UP, WITHOUT YOU HAVING TO SPEND ANYTHING ON MARKETING.

Moreover, keep your existing customers happy to turn them into a sales force for your business. A happy, delighted and loyal customer will recommend your business to others. As a result, your sales go up, without you having to spend anything on marketing. BE BUILT TO EMBRACE FAILURE - FIND OPPORTUNITY IN OBSTACLES

Many salespeople find themselves struggling to develop new sales techniques. Most worry about failure. If the technique doesn’t work, they’ve lost a client and have to go back to the drawing board. Musk has one piece of advice for people who are afraid of failure. “Failure is an option here. If things are not failing, you are not innovating enough,” he says.

But when you truly mess up, as he has done recently with the SEC, be prepared to deal with with the situation and pay for your consequences. The key is, what did you learn? How fast can you fix the damage and reapply what you learned to avoid the same mistake?

This is a simple, yet powerful statement. Musk notes that the fear of failure is the enemy of innovation. You can even see how he has put this philosophy into action in his business ventures. Musk is almost always at the forefront of whatever industry he works in, and he will take risks to achieve success.

YOUR CLIENTS CAN SELL FOR YOU - FIRMLY ALIGN TEAM GOALS WITH CUSTOMER NEEDS

Did you know that Tesla does not pay for endorsements or product placement? Whenever you see a Tesla product on television, it’s because the people behind the show you’re watching wanted it there.

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You can apply this to your own business, making it one of the key ways to improve sales performance in the process.

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If your business stagnates, it loses customers. Other companies will move ahead of you, and they’ll take your customers with them. Innovate in all aspects of the business, from the products you create through to your ideas to increase sales. Not every idea will work, but that’s okay. Without innovation, you fall behind, and your company’s sales will suffer as a result. BE BOLD

Don’t settle for low-hanging fruit. In fact, stop using that term in your day-to-day speech. Reach beyond a stretch goal to something game changing in your life, the lives of others and in your field. Announce it. Rally people behind it. Map out how you’ll achieve it and get going! BE BRIGHT

Don’t misunderstand this point. You don’t need Musk’s education or engineering prowess to be bright. You can be the brightest by truly understanding what you don’t know, being curious and finding the people who together, can innovate your process, technology, people or products. It’s not about being the smartest person in the room, but assembling a great team to drive forward and innovate along the

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POINT OF VIEW

way. BE BULLISH ON DATA TO DRIVE DECISIONS

In the sales and marketing world, data-driven decision making is all the rage, with a virtual technology arms race of building a formidable tech stack. Based on what I’m seeing today, this ‘stack’ includes a marketing automation platform integrated with your CRM tool coupled with omni-channel integration capabilities to other tools that create, distribute, socialize and manage the content process and a predictive Business Intelligence Dashboard.

HASSAN ALI IS A PROJECT DIRECTOR SE ASIA AT STEM HEALTHCARE.

While technology has certainly helped us harness knowledge and enabled us to make better decisions, my advice is to be sure you marry that technology with the human touch. Technology is a tool, but you need seasoned experts to help you interpret, pull insights and adjust strategy. CONCLUSION

It should come as no surprise that there are many things you can learn from one of the world’s most successful entrepreneurs. Elon Musk’s words of wisdom highlight the secrets behind the sales successes of his companies.

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STRENGTHENING SDGS

THROUGH UNTAPPED

WAQF FUNDS: A BLOCKCHAIN-BASED

WAQF

FAAZA FAKHRUNNAS AND YUNICE KARINA TUMEWANG

“WE ARE LIVING IN A PHENOMENAL AGE. IF WE CAN SPEND THE EARLY DECADES OF THE 21ST CENTURY FINDING APPROACHES THAT MEET THE NEEDS OF THE POOR IN WAYS THAT GENERATE PROFITS AND RECOGNITION FOR BUSINESS, WE WILL HAVE FOUND A SUSTAINABLE WAY TO REDUCE POVERTY IN THE WORLD.”- BILL GATES

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world without poverty is still a challenge, which the global community cannot ignore. The United Nations Development Program (UNDP) claims that over 650 million people in the world are living under the poverty line, i.e living on less than US$1.25 per day. This is equal to 11% of world’s population. Data released by the International Monetary Funds (IMF) revealed that African and Middle Eastern countries ravaged by war and famine remain the poorest in the world. The IMF ranking of countries based on the purchasing power parity per capital shows that the top five poorest countries in the world in 2018 are predominantly Muslim-majority countries. Poverty is still a major issue that remains unresolved due to several factors such as war, corruption, occupation, bad governance and crisis. However, United Nations (UN) takes on a different viewpoint when looking at this contemporary predicament. In a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity; the UN had announced 17 Sustainable Development Goals (SDGs), which is defined as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’. To attain these goals, UNDP focuses on helping countries build and share solutions in three main areas: eradicate poverty in all forms and dimensions, accelerate structural transformations and build resilience to shocks and crisis.

ISLAMIC FINANCE AND SDGS

From an Islamic finance perspective, SDGs are linked to the concept of maqasid al-shari’a (objectives of Shari’a), which consist of protection of faith, life, intellect, progeny and wealth. In this sense, Islamic finance is concerned with the realisation and establishment of human well-being as well as a just and fair order of society, which embodies socially responsible development. Comparing SDGs with maqasid al-shari’a, we find that SDGs 1,2,3,6, and 10 are aligned with protection of faith. These goals (including zero hunger, good heath and wellbeing) focus on reducing vulnerability, which in turn is believed to help strengthen faith. Prophet Muhammad (peace be upon him) once said poverty is near to ungrateful to Allah swt. Hence, to protect his/her faith, a muslim must not be trapped under the poverty line. As for the preservation and protection of intellect, SDGs also focus on the provision of high quality education and the promotion of innovation and infrastructure. It is well established that lack of essential nutrients can cause stunting and affect intellectual capabilities. Wealth protection under maqasid al-shari’a is aligned with SDGs in areas of reducing inequalities, promoting decent work and economic growth.

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Islamic finance, through its social instruments such as zakat (Islamic tax) and waqf (Islamic endowment), can be utilised to help the poor and ultimately overcome social problems while at the same time fulfil basic human needs. The 17 developmental goals of the SDGs comfortably match with the longterm objectives of Shariâ&#x20AC;&#x2122;a and hence, provides good scope for a waqf-based development plan in line with the framework of SDGs. CONVERGENCE OF WAQF TO SDGS

A prominent Islamic economist, Monzer Kahf, defines waqf as holding asset and utilise it in a productive activity for the purpose of repeatedly extracting its usufruct to performing charity activity out of the goodness. In principle, the founder of the waqf (waqif) determines the type of management of the waqf, i.e. the objectives of the endowed assets and distribution of its proceeds. Meanwhile, the waqf manager (nazer/mutawalli) is responsible for the administration of the waqf property to the best interests of the beneficiaries. Waqf may include both immovable assets (land and real estates) and movable assets (cash, livestock, books, agricultural products). Being predictable, benefits from waqf assets are meant to flow to the community at large on a sustainable basis. Income or revenues derived from waqf properties can be used for charitable social, economical and educational upliftment, including to deal with environmental issues such as climate change and animal from extinction. From the explanation above-mentioned, there is clearly a convergence of waqf with some of the fundamental goals of the SDGs as proposed by UNDP, which are also congruent with the maqasid al-shariâ&#x20AC;&#x2122;a. However, the success of SDGs is as much dependent on the contribution of the philanthropic sector as it is on the active involvement of private and public. According to the 2017 Funding Compendium Report issued by UNDP, achieving the SDGs programme will take between US$5 to $7 trillion, with an investment gap in developing countries of about $2.5 trillion based on the current levels of investment in SDG-relevant sectors.

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Even though there has been an increase in private resource amounting to 1%, from the regular resource (53 country-government and non-government organization) in 2017, the contribution decreased by US$6 million to US$612 million as compared to 2016. Recent estimates by the Sustainable Development Solutions Network indicate that the SDGs will require an additional US$2.4 trillion of annual public and private investment into the low-carbon infrastructure, energy, agriculture, health, education and other sustainability sectors globally. Hence, funding the SDGs will require significant investment and new sources of capital.

A PROMINENT ISLAMIC ECONOMIST, MONZER KAHF, DEFINES WAQF AS HOLDING ASSET AND UTILISE IT IN A PRODUCTIVE ACTIVITY FOR THE PURPOSE OF REPEATEDLY EXTRACTING ITS USUFRUCT TO PERFORMING CHARITY ACTIVITY OUT OF THE GOODNESS.

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WAQF AND BLOCKCHAIN

There is huge potential for waqf development in the Muslim world. For example, waqf collection in Singapore – a muslim minority countrycan reach up to US$6 million in a year, which is directly collected by Islamic Religious Council of Singapore. Moreover, Mohsin (2014), in her book entitled Corporate Waqf from Principle to Practice, revealed the practice of waqf in several countries. In Malaysia, a corporate waqf namely Waqf An-Nur is operated by J-Corp, a state-owned company in Johor with an endowment of RM250 million worth of private listed company and unlisted shares. The waqf conducts several social empowerment activities in public facilities, economic empowerment and health care. In India, Pakistan and Bangladesh; the most prominent waqf story institution is the Hamdard Foundation. The Foundation has 600 over the counter (OTC) clinics certified by ISO 9001, which are all waqf assets and its profit are utilized to social purpose activities benefitting thousands of people in health and education. In Turkey, 75 out of 105 universities are based on waqf, which are mostly family endowment. An example is the Sabanci Foundation established by the Sabanci Family. The Foundation has built over 120 institutions in 78 residential areas and provided over 44,000 scholarships to create equal opportunities in education. In 2010, the Sabanci Foundation was managing a total waqf fund of about US$1.3 billion.

THERE IS HUGE POTENTIAL FOR WAQF DEVELOPMENT IN THE MUSLIM WORLD. FOR EXAMPLE, WAQF COLLECTION IN SINGAPORE – A MUSLIM MINORITY COUNTRYCAN REACH UP TO US$6 MILLION IN A YEAR, WHICH IS DIRECTLY COLLECTED BY ISLAMIC RELIGIOUS COUNCIL OF SINGAPORE.

Indonesia, one of the largest Muslim country, is reported to have 1,400 square km of waqf land as reported by IRTI and Thomson Reuters (2013). The assets are scattered across 42,300 location throughout the country and valued at about IDR800 trillion. The Indonesian government predicts that cash waqf in the country has the potential to reach of IDR20 trillion per year, as compared to the the annual waqf collection of only IDR22 billion are present. This represents not more than 1.1% out of potential. On top of that, a considerable amount of waqf assets (mostly in form of land and building) are still underutilized. Given this untapped potential of waqf, many experts in Islamic finance are exploring new opportunities and possibilities available through the use of blockchain technology to facilitate in the development and sustainability of waqf.

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Arguably, blockchain technology has been around for about nine years, but the real applications have only been around for the past four years, when the ethereum blockchain was introduced. Since then, many real use cases for blockchain technology have been developed, especially after the ripple blockchain was launched. The World Economic Forum predicts that by 2025, 10% of the world’s GDP (currently about US$100 trillion) may be on blockchain. By definition, blockchain is essentially a distributed database of records or public ledger of all transactions or digital events that have been executed and shared among participating parties. In other words, blockchain is a digital ledger that holds almost any kind of information that can be stored in a digital format, be it transactions, contracts, assets or identities. Entries in the digital ledger are safe, transparent and searchable. There are several reasons why blockchain technology can be beneficial to the management of waqf assets. Firstly, entries in the digital ledger are safe since the system built by blockchain is incorruptible and unalterable. Copies of the ledger are distributed to a community known as nodes. If the nodes do not agree on any of the changes, then they cannot be made. Moreover, the public ledger follows a “51% rule”, which means that if more than 51% of the nodes do not agree with a transaction, it will be deleted. Additionally, as it is distributed, there is no one point of failure. If a hacker wants to manipulate the blockchain, he will have to attack all of the nodes at once. Secondly, is transparency. As a part of the fintech breakthrough, blockchain also shares the same prevalent features of fintech products including transparency and easy-touse, which are equally relevant with Islamic finance principles. Unarguably, transparency leads to trust. Trust is essential to build good relationship among society and/or between society and government. Bank of England defines blockchain as a technology that allows people who don’t know each other to trust a shared record of events. In this case, blockchain enables aid organizations including waqf institutions to receive funds instantly from many individual donors and then distribute these funds efficiently and effectively to people who can prove their identity without a piece of paper.

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Another benefit is the easiness to track transactions. Blockchain offers a solution for the better management of underutilized waqf assets, which require to be pledged to specific goals making it difficult to repurpose a waqf. Here, blockchain could create smart contracts that will be tied to specific waqf projects in the hope of providing a more efficient way to raise funds as well as manage and transfer the ownership of waqf contributions. The smart contracting engine must be built in accordance with Shari’a principles. Unlike bitcoin’s blockchain, which allows anonymity, every transaction on the endowment chain will require compliance with know-your-customer and antimoney laundering regulations. Thus, blockchain could track each contract electronically across the lifespan of the investment, increasing the efficiency of the potential of the asset. Considering all of the above benefits and potential, a Singapore-based financial technology company, Finterra has proposed the use blockchain technology to modernize the management and investments of waqf aimed at tapping into the vast but underutilized pool of assets across the Muslim world. The company started developing its blockchain platform in October, with pilot projects currently being studied from endowments in Singapore, Malaysia, Indonesia; followed by Dubai, Qatar, and others. Finterra’s plans reflect the interest that a number of fintech companies have in broadening their footprints to include core Islamic finance markets in the Middle East and Southeast Asia.

BY DEFINITION, BLOCKCHAIN IS ESSENTIALLY A DISTRIBUTED DATABASE OF RECORDS OR PUBLIC LEDGER OF ALL TRANSACTIONS OR DIGITAL EVENTS THAT HAVE BEEN EXECUTED AND SHARED AMONG PARTICIPATING PARTIES.

WAQF FOR HUMANITARIAN NEEDS

The vast number of organizations involved in development aid around the world, from NGOs and private foundations to national governments and international bodies, is indicative of the variety and scale of the issues they are working so tirelessly to address , i.e. bridging the gap between growing humanitarian needs and budgets. IFRC (International Federation of Red Cross and Red Crescent Societies) as a worldwide humanitarian aid organization forecasted that each year at least US$1 trillion is potentially raised through Islamic social financing. As one of the development of technology which is closely linked to Islamic social financing, crowdfunding coverage is estimated to be around US$90 billion (World Bank, 2016).

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Such forecasts are made against the background of growing awareness of humanitarian needs around the world. Similarly, part of the reason that the SDGs have found such broad-based support in the global community is because they emphasize improvements in the lives of individual citizens and communities. Affordable energy, economic growth, poverty reduction - these are all goals that hold governments accountable to the constituents they serve. Blockchain can serve as an infrastructure and tool for that accountability. It can help bring together different organizations, engender powerful new partnerships between public and private sector organizations, and allow their joint initiatives to grow quickly and effectively. If that turns out to be the case, then the SDGs may be a starting point - not an endpoint - for broader collaboration, exchange, and transparency around the world. Although there have been few talks on blockchain and SDGs with Islamic compliance and Islamic commercial finance, public discussion on the possibility of blockchain with Islamic social finance particularly waqf is very limited. Many Muslims are still unaware on the social advantages and potential of blockchain technology. That is why International Waqf & Blockchain Forum (IWBF) has been initiated and hosted for the first time in Dubai, May this year. It successfully attracted interest from stakeholders around the world and brought together the best minds to showcase new opportunities and possibilities available through the use of blockchain technology to help in the development and sustainability of waqf. The second leg of IWBF is planned to be hosted in Malaysia next year. The overall objective of this forum is to establish clarity and a collective understanding of the potential of blockchain technology for supporting the facilitation and development of waqf assets on a global scale, whilst also promoting new economic alternatives to enhance Muslim unity. However, there are several important points to note given the rise in innovations and disruptions happening in the financial and technological terrain, Islamic finance, including waqf principles.

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We are required to manoeuvre carefully and reinvent this advancement especially in terms of governance and regulations to remain relevant since they constitute a major socio-economic institution in todayâ&#x20AC;&#x2122;s financial market. Although the current implementations of blockchain technology for waqf are still in their infancy, as a form of pilot project, we have to think of its development in the foreseeable future. Widespread adoption of any records-based system requires standards, agreements and regulatory frameworks as well as systems for interoperability. Regulation and standardization may determine the extent and speed of progress. In the next phase of waqf development, we may witness more Muslim countries encouraging trade in waqf as even today corporate waqf is used to generate income for the benefit of society in the form of cash, shares, sukuk (Islamic bond), ibdal (sale) and istibdal (exchange). Many waqf assets such as sukuk issuance can be used to finance the development of waqf properties, and both the investor and the property benefit besides public. The combination of waqf and sukuk in a single structure when added to blockchain technology makes global transactions available for financing and investing. In a nutshell, securing funding for work can sometimes seem as difficult as the work itself. Identifying inefficiencies, optimizing effectiveness, and combating corruption is therefore central both to winning the confidence of existing and potential supporters as well as to achieving their own immediate goals. The verifiability, resilience, and transparency of blockchain-based systems can help agencies assess, improve, and scale their models, reassure donors, and make receiving aid easier and more dignified.

IN A NUTSHELL, SECURING FUNDING FOR WORK CAN SOMETIMES SEEM AS DIFFICULT AS THE WORK ITSELF. IDENTIFYING INEFFICIENCIES, OPTIMIZING EFFECTIVENESS, AND COMBATING CORRUPTION IS THEREFORE CENTRAL BOTH TO WINNING THE CONFIDENCE OF EXISTING AND POTENTIAL SUPPORTERS AS WELL AS TO ACHIEVING THEIR OWN IMMEDIATE GOALS

FAAZA FAKHRUNNAS IS A LECTURER AT DEPARTMENT OF ECONOMICS AND A RESEARCHER AT THE CENTER OF ISLAMIC ECONOMICS STUDIES AND DEVELOPMENT (CIESD), UNIVERSITAS ISLAM INDONESIA.

YUNICE KARINA TUMEWANG IS A LECTURER AT DEPARTMENT OF ACCOUNTING AND A RESEARCHER AT THE CENTER OF ISLAMIC ECONOMICS STUDIES AND DEVELOPMENT (CIESD), UNIVERSITAS ISLAM INDONESIA.

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TALKING POINTS

POST

GOING FROM

PILLAR

IQBAL NASIM, CEO AT NATIONAL ZAKAT FOUNDATION, UK

s a pillar of Islam, zakat has enormous transformative potential. But it remains untapped and itâ&#x20AC;&#x2122;s about time we let it make a comeback. After all, our future depends on it. Most of us limit our understanding of the pillars of Islam as being individual, ritual obligations. As long as we bear witness to God and His Prophet verbally; pray, pay, fast and complete the pilgrimage, then we regard our duties to have been fulfilled and the pillars to have been upheld. At an individual level, this approach may well be sufficient. But what it fails to appreciate is the collective nature of the pillars and their function at a macro level. In fact, their role is not just in evidencing and developing an individualâ&#x20AC;&#x2122;s Islam, or devotion to God, but it extends far beyond that to upholding devotion to God in society at large, providing stability and a firm foundation on which to build and thrive. When it comes to zakat specifically, this is especially critical. Zakat is the one pillar that scholars have long identified as having the most obvious dual function of being an act of obedience to God and a means by which to affect positively the lives of human beings.

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TA L K I N G P O I N T S

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TALKING POINTS

Our personal duty to God may well be fulfilled by making an accurate and timely payment. But the extent to which zakat can truly be a pillar of devotion to God (Islam) as a successful phenomenon in society, depends entirely on the way in which its distribution occurs. It stands to reason and to piety that God expects us to work together to ensure that our zakat has the maximum impact in providing support, stability and security to the faith and the faithful. The zakat pot in the UK is at least £500 million pounds per annum and will continue to grow in years to come. To unlock the transformative power of this large, critical and regular source of funding, we urgently need to reconfigure the way in which zakat is currently being paid, collected and utilised; and this is how we need to do it: POOLING:

Rather than each individual making their own decision as to where their zakat should go, zakat should be centrally collected and organised. Zakat is a public, not a private, matter. It should be entrusted to a credible institution that can represent the combined interests of the community and make decisions with a bird’s eye view of the various challenges that face us.

ZAKAT IS A PUBLIC, NOT A PRIVATE, MATTER. IT SHOULD BE ENTRUSTED TO A CREDIBLE INSTITUTION THAT CAN REPRESENT THE COMBINED INTERESTS OF THE COMMUNITY AND MAKE DECISIONS WITH A BIRD’S EYE VIEW OF THE VARIOUS CHALLENGES THAT FACE US.

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RATHER THAN BEING DISTRIBUTED ONLY TO THE POOR, ZAKAT IS SUPPOSED TO BE BALANCED ACROSS THE EIGHT CATEGORIES STIPULATED IN THE QUR’AN (9:60), IN A MANNER THAT REFLECTS THE NEEDS OF THE TIME.

LOCALISING:

Rather than it being scattered all over the world, zakat is supposed to be focused locally to affect the very environment in which the zakat payers live. It is where we live that we are most accountable for representing God’s cause and continuing the prophetic mission. It is where we know the needs and culture best. And it is within this context that we then seek out the poor and needy within our community who have the first right to our zakat and whose poverty weakens their faith and weakens us as a community. Beyond zakat, we are at complete liberty to spend charitably on all manner of local and international projects. Based on available data, it is reasonable to conclude that even if Muslims paid all their zakat for local distribution, just as much (if not more) would be given in voluntary charity for other causes and a sensible balance in our overall giving would be achieved. BALANCING:

Rather than being distributed only to the poor, zakat is supposed to be balanced across the eight categories stipulated in the Qur’an (9:60), in a manner that reflects the needs of the time. Together, these categories address the following issues: poverty alleviation; economic empowerment; effective zakat administration; winning over hearts towards Islam and the Muslims; providing basic equality of rights and opportunity; removing burdensome financial constraints that result from debt; supporting God’s cause, i.e. the furtherance of Islam, by by helping those in the community who give up their time to represent it and to advocate on its

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TALKING POINTS

behalf; also within God’s cause, supporting scholarship, so that scholars can develop, guide people in a relevant way and respond to the ideological and intellectual challenges of the day; and finally responding to emergency situations. All three components of zakat being pooled, localised and balanced across the various categories of expenditure are inter-dependent and synergistic. The closer we can bring our utilisation of zakat to reflect these characteristics, the closer we will get to zakat actually being a pillar of devotion to God in our society. But for as long as things remain as they are, regardless of noble intentions, the key efforts that are desperately required to uphold Islam and support Muslims in the UK are likely to remain incapacitated. Are we serious about tackling the vast array of internal and external challenges that weaken us and undermine our submission to God? If so, the shift that is required in our thinking and practice is nothing short of urgent. On almost every metric that would give us an idea of the wellbeing of a community, the Muslim community in the UK rates worse than the national average. This is true when we look at numbers relating to poverty, social mobility, health, education, crime and how the community is perceived from the outside. Our faith is misunderstood, often maligned, and there is very little that we are doing in the public sphere to rescue its reputation. Leaving aside the birth rate, there are strong indications that more Muslims are leaving Islam than joining it.

TO GO “FROM PILLAR TO POST” IS TO GO FROM ONE PLACE TO ANOTHER IN A HAPHAZARD MANNER THAT TENDS NOT TO YIELD RESULTS. THE DIVINE INSTITUTION OF ZAKAT IS SUPPOSED TO REPRESENT THE OPPOSITE: AN ORDERED SYSTEM, CLEAR IN ITS OVERARCHING OBJECTIVE AND PARAMETERS BUT MERCIFULLY FLEXIBLE IN ITS APPLICATIONS, THAT BRINGS INNUMERABLE BLESSINGS.

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SO BE SMART WITH YOUR ZAKAT. THINK CAREFULLY ABOUT WHERE YOU PAY IT AND TRY TO DO SO IN LINE WITH THE PRINCIPLES OUTLINED ABOVE. TOGETHER, WE CAN AND MUST UNLOCK THE FULL POTENTIAL OF ZAKAT. AFTER ALL, OUR FUTURE DEPENDS ON IT.

The above issues are not only problematic in worldly terms. What makes them far more concerning is the effect they have on people’s ability to find and hold onto truth. All the categories of zakat represent concerns that affect the very fabric of a community. When these problems are left to fester, they constitute weakness and undermine our cause. In His knowledge and wisdom, God is simply telling us to spend our money sensibly to tackle the various challenges that end up acting as barriers to people being able to remember, thank and serve Him in a sustainable way. As with all His instructions, they are only for our benefit, in this life and the next. To go “from pillar to post” is to go from one place to another in a haphazard manner that tends not to yield results. The divine institution of zakat is supposed to represent the opposite: an ordered system, clear in its overarching objective and parameters but mercifully flexible in its applications, that brings innumerable blessings. If we want zakat to go from a mere “post” or milestone as an individual act of duty to God, to a “pillar” that stands firm to uphold and strengthen our very purpose as human beings, then the time to engage in critical introspection about the way we pay our zakat is now. So be smart with your zakat. Think carefully about where you pay it and try to do so in line with the principles outlined above. Together, we can and must unlock the full potential of zakat. After all, our future depends on it.

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PERSPECTIVES

EADERSHIP

ESSONS PROFESSIONALS SAY THEY WISH

THEY HAD LEARNED SOONER

tarting out in our career can often feel like a never-ending learning curve. Our mistakes, as much as our successes, define us and can help steer us forward today. As we look back to earlier stages in our careers, several of us can remember times when we thought we were not experienced or skilled enough for a role or project. How many times have you heard someone say, “If only I knew then what I know now…?”Have you ever look back on the early days of your career and wish you could apply what you now know? No matter how talented or intelligent you are, many of the greatest lessons - in business and in life - don’t come until after years of experience. Experience has a way of revealing great leadership secrets. While we can’t go back in time to pally this wisdom, we can help others incorporate these insights into leadership strategies that measurably strengthen their results.

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HERE ARE SOME LEADERSHIP LESSONS THAT PROFESSIONALS WISH THEY HAD LEARNED SOONER IN THEIR CAREER.

LESSON #

KNOW THE TRUE VALUE OF TIME Ekrem Özülker

Head of Private Banking, Kuveyt Turk Bank, Turkey

A leader leads by example is empathetic and possesses high EQ. His vision and objective oriented approach is flanked by the ability to mobilize and motivate the team towards meeting the objectives. Upholding morals, truth, fairness and principles form the core of the leadership which should never be compromised at any cost. Leadership also requires constant assessment of performance vis a vis objectives and modifying approach and tactics constantly in accordance with the changing external factors. A leader has to constantly demonstrate creativity and innovation and inculcate in his team the ability and desire to create and innovate. In essence, the leadership lesson I wish I had picked up earlier in my career is to value time, which is the most precious commodity. I wish I had understood the value of time as the supreme factor while acquiring, deploying and applying the leadership skills to motivate and direct the team towards meeting the organizational objectives.

LESSON #

BE TRANSPARENT Muhamad Haseirie Mahyudin

Vice President/ Microplus, Retail Banking Department, Bank Simpanan Nasional, Malaysia

I believe being transparent to all my staff is my critical success factor. As a leader, I need to explain and brief them on every action taken by company whether they like it or not. It’s my duty to motivate and educate them. Being transparent will allow my staff to fully commit to the company’s direction in achieving our goal. They will trust you more rather than you keep the information. You can’t buy staff loyalty but you must earn it.

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LESSON #

CONNECT WITH PEOPLE AROUND YOU Esra Moheb

Senior Consultant at Temenos

Leading by example is one of the most effective, if not it, approach. Aside from the work objectives, sincerely touching the teamsâ&#x20AC;&#x2122; emotional aspects, and connecting with them in a thoughtful was (even with very minor gestures) eventually reveals dedication, loyalty and compassion towards work. Hard working is not necessarily a key, but smart working is.

LET THINGS TAKE ITS COURSE

LESSON #

Ugurlu Soylu

Islamic Banking Pioneer and Expert, and Consultant at Soylu Consulting, German

As you get older, ideally you should get wiser. From a later, more mature perspective the most important leadership lesson for me in my professional life is to be calmer and let the things happen that are supposed to happen. As a leader it is quite difficult to accept that sometimes things develop in ways that are suboptimal or even harmful for your company, but you cannot hold them up. Of course, it is important to push your ideas, to be creative and visionary and to lead. But organisational systems are extremely complex and sometimes even for the leader not possible to emerge. Accepting the social law of inertia preserves you from wasting your time and energy for things you can hardly change - energy you essentially need for your partner, your family, yourself and your company.

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LESSON #

AVOID NARROW TUNNEL-VISION THINKING Farah Arakji

Chief Financial Officer, Abu Dhabi National Takaful, UAE

Of all the lessons my journey has taught me, the one that I was least prepared for was how to productively have a tunnel vision without missing the forest for the tree. From very early on in my career, I, like many young leaders, have been told to “Set your sights on the goal.”, “Never lose sight of your target.” and that is exactly what I did. I fell into the “tunnel vision” trap of committing to a single fixated vision and aiming at definite goals to achieve my department’s metrics and KPIs. While those traits helped me get to where I am today, they are only one rung in the ladder to success. Today, I work hard to set the vision for my team. One that supports the achievement of strategies and measurable objectives, but does not fall short on the overall business foresight nor sacrifices character and integrity. I strongly believe that we should have in place measurable targets and metrics to aim at. However, it should not follow a narrow context that blocks out our view of the overall business environment and other surrounding sidelines. That larger picture is what guides us. It allows us to manoeuvre around obstacles that, in the narrow scope seem unavoidable and sometimes even debilitating. Great leaders have great vision.

LESSON #

COMMUNICATE CLEAR EXPECTATIONS Abd. Azim Mohammad

Head, Management Reporting Section (MRS), Finance Division Bank Islam Brunei Darussalam

One leadership lesson I wish had picked up sooner would be the clearly communicating my expectation to my team. Effective communication is imperative to a successful career. Having the best knowledge will not guarantee success if it is was not clearly communicated. When leading a team, communicating your expectation is equally important. Communication comes in different shapes and sizes, and interpretation of such instruction may vary from one person to another. By sharing what I have envisioned enables team members not only aligned to it but also able to come up with other ways of tackling such assignments. Providing clear, direct expectations helps team members focus their performance on what’s important and on what results that was outlined. Without sharing such expectation, the recipient may have different ideas of what is actually required. Asking for analysis of a market for example, may be as simple as a one pager table as opposed to a 10-pager report. Not only a 10 pager report takes time to produce, we waste time producing things that are unnecessary and inefficient.

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LESSON #

DON’T EXPECT EVERYONE TO BE LIKE YOU Aziza Ebrahim

Senior Advisor, OASIS Crescent Group Cape Town, South Africa

Having started my career at the age of 20 in an international standard-setting organization, on foundations of which I was lucky enough to have grown very fast in my career leader, one thing I wish I had learned earlier was that you should not expect everyone to be like you. As I have slowly started managing a few people, then groups of people and then departments with people at the organization; I understood that every single person has potential despite their shortcomings. As a leader one must be able to identify it and utilize it effectively. I used to assume often that if things are clear to me they must be clear to everyone else. Only over the years that I have learned how to deliver my message to a multinational team of people at different seniority levels as getting the buy-in from executives and board members are equally important in the successful management of an organization. One key element which I always remind myself of is patience, being naturally hard-working, fast, and ‘aggressive’ when it comes to action toward project execution, I think having patience in mind when dealing with people is very important. Unfortunately, it only comes with experience and maturity.

DEVELOP EMOTIONAL INTELLIGENCE SKILLS

LESSON #

Jawad Mohammad

Head of Compliance, Qatar International Islamic Bank, Qatar

Leadership is the skill that cannot be entirely thought, hence its rightfully said that leaders are born with abilities to lead. Having said that, one should always learn along his/her path towards excellence to ensure they lead in the most ethical, cultured and professional manner. I had always clasped all the learnings throughout my professional journey to ensure that I leave behind a legacy not only as good leader but also as a humble human being. The one leadership lesson that I wish I had picked much early in my career, is the ability to understand and execute “Emotional Intelligence”. It’s the competence of persons to diagnose their own emotions and that of others, differentiate amongst diverse emotional state and mark them suitably. The use of emotional intelligence in team building is highly crucial as we should remember that today’s modern work force in almost all the jurisdictions is dynamic and culturally diverse. The emotions of every single person are closely knitted to their cultures and society, yet they are common for all of us as humans. Studies have exposed that individuals with better emotional intelligence have greater mental health, job performance, and leadership skills. Which implies that ability to adopt and apply emotional intelligence in leadership is essential.

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LESSON #

LEADERSHIP IS A JOURNEY, NOT A DESTINATION Dan Razali

CEO & Director, Absolutely Halal Global Pte Ltd, Singapore

The key lesson I have learnt about leadership is that it is not a destination or situation we arrive at. Becoming a leader is not about sitting on one’s laurels and feeling satisfaction at acquiring a leadership position. Being an effective leader is about constantly learning, and being prepared to take decisions and make changes in pragmatic rather than dogmatic ways. People look to a leader for direction and guidance, someone who leads from the front. They do not just want someone who tells them what to do, but someone who shows them how to get things done.

LESSON #

BE SINCERE AND OPEN M. Jowfer Farook

Senior Products Manager, Kuwait Finance House

One of the valuable leadership lessons I learnt from my father was the importance of . My father was a “people’s person” who had a sincere concern towards family, friends and colleagues and constantly reminded us to do the same. I followed my father’s advice and experienced great success. A leader should aspire to create an environment where team members feel comfortable to share their challenges and ideas openly. He should constantly motivate them to develop their skills and knowledge, and help them climb the corporate ladder. Be sincere to your team members, share all required information and together plan on achieving the overall target. This leadership quality will create a strong bond and high output from the team members and they will follow any request of the leader. In my opinion, a successful leader does not need to be highly educated, but needs to have values and good personality.

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PERSPECTIVES

ISFIRE REPORT

GLOBAL ISLAMIC FINANCE AWARDS 2018 CELEBRATES EXCELLENCE IN ISLAMIC FINANCE The 8th Global Islamic Finance Awards or better known as GIFA was held in grandeur with attendance by more than 250 guests including dignitaries, government officials, diplomats, distinguished guests and captains of the industry. The Awards Gala Dinner took place in Sarajevo, Bosnia and Herzegovina on September 29 with Bosna Bank International as the official host. This yearâ&#x20AC;&#x2122;s GIFA was a vibrant celebration of accomplishments and achievements of movers and shakers that are driving positive change and moving the global Islamic finance services industry forward. Chief Guests included His Excellency Bakir Izetbegovic, Chairman of the Council of Presidency of the Republic of Bosnia-Herzegovina, His Excellency Ismail Omar Guelleh, President of the Republic of Djibouti and GIFA Laureate 2017 and Ms Lisa Doughten, Chief of the United Nations Central Emergency Response Fund (UNCERF) Secretariat.

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The annual ceremony is designed to highlight, encourage and reward exceptional performance and contribution in the growth of the global Islamic banking and finance community with an ultimate objective of promoting social responsibility, adherence to Shariâ&#x20AC;&#x2122;a authenticity and commitment to Islamic banking and finance. Being the only global Islamic finance awards programme, GIFA winners come from all corners of the world, from the USA to Indonesia, and from the UK to Kazakhstan and Eastern Europe. The winners are selected from all stakeholders â&#x20AC;&#x201C; from industry players to regulators and from Shariâ&#x20AC;&#x2122;a scholars to the services providers on the fringe of the industry. GIFA is also the only Islamic finance award programme that recognises the role and support of governments and politicians in the development of Islamic banking and finance.

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Commenting on GIFA, , Dr Sofiza Azmi, Chairman of the GIFA Awards Committee and CEO of Edbiz Corporation said: “Over the last 7 years, GIFA have honoured more than 200 governments, institutions and individuals who have demonstrated strong commitment and leadership in Islamic finance.” She added that since the inaugural GIFA ceremony in Oman in 2011, “… we have seen new levels of innovation and authenticity in the products and services of our winners. These reflect the growing diversity and strength of the Islamic financial services industry.” At this year’s GIFA ceremony, over 55 award categories were handed out including the most prestigious GIFA Leadership Award, which is presented to a head of state of government or someone similar in stature,” explained Dr Sofiza Azmi. “The coverage of GIFA is comprehensive, as we include all the industry stakeholders from politicians to academicians that have played

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leadership roles in their respective fields,” she added. “Since GIFA first made its debut in Muscat, Oman; the awards programme has come a long way to become the number one Islamic finance awards programme in the world,” she continued. Today GIFA is indeed a global brand that is recognised as the most authentic and respected Islamic finance awards programme in the world. In her welcome remarks, Dr Sofiza Azmi iterated: “GIFA celebrate the success of award winners who have made outstanding achievements their respective fields, contributing to the sustainability of Islamic banking and finance as a viable system within the global international financial architecture.” She added that “These are the players and thought leaders who are championing Islamic finance and converting vision into reality.”

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GIFA LEADERSHIP AWARD 2018 - PRESIDENT BAKIR IZETBEGOVIC Bosnia and Herzegovina

This year, the GIFA Awards Committee decided to present 2 GIFA Leadership Award 2018; one for the country category and another for an individual who has shown commitment to the development of Islamic economy in his or her particular country. The GIFA Leadership Award 2018 for an individual was presented to President Bakir Izetbegovic by President Ismail Omar Guelleh (President of the Republic of Djibouti), who himself was GIFA Laureate for 2017. President Bakir Izetbegović was instrumental in ensuring the event was held in his country. Under his leadership, the country provided a level-playing field to ethical finance; launched the first ethical stock market index in the Balkan region and positioned Sarajevo as a hub for ethical finance. As the 8th GIFA Laureate, Bakir Izetbegovic joins other laureates such as Tun Abdullah Badawi, former Prime Minister of Malaysia (2011); Sultan Nazrin Shah of Perak, Malaysia (2012); Shaukat Aziz, former Prime Minister of Pakistan (2013); Nursultan Narzabayev, President of the Republic of Kazakhstan (2014); Muhammandu Sanusi II, Emir of Kano, Nigeria (2015); and Joko Widodo, President of Indonesia (2016).

Speaking on the occasion, President Bakir Izetbegović expressed his appreciation for the recognition given. “Islamic finance can play a significant role in building our infrastructure, primarily through the implementation of public-private partnerships, which provides excellent results in some countries such as Malaysia, Turkey, Jordan, Djibouti,” he said. “In this I see the possibility of financing through Islamic banking in projects that would be built on the principle of public-private partnership. The potential and opportunities of Islamic banking in PPP have also been recognized by the World Bank, which analyzes Islamic banking as tool for meeting the global UN Agenda for Sustainable Development 2030 and recommends Islamic banking as one of the most suitable means of financing global sustainable development, in particular for financing infrastructure projects,” added President Bakir Izetbegović.

Meanwhile, the GIFA Leadership Award 2018 for a country was presented to Bosnia and Herzegovina. President Bakir Izetbegovic received the award on behalf of his country from Ms Lisa Doughten, Chief of the United Nations Central Emergency Response Fund (UNCERF) Secretaria who was one of the Chief Guests. This award recognises the great strides Bosnia and Herzegovina has made promoting and developing Islamic economy and finance in the Southeast Europe region. Due to the keen personal interest taken by President Bakir Izetbegovic, Bosnia and Herzegovina is now serving as a gateway for Islamic banking and finance as well as halal sector to the Southeast Europe region.

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Other dignitaries were Abdullah Skaka, Mayor of Sarajevo; Sheikh Huseinef Kavazovi, Grand Mufti of Bosnia-Herzegovina; Mr Zakri Jaafar, Malaysia Ambassador to Bosnia and Hervegovina; Mr Mark Field, British Ambassador to Bosnia and Herzegovina; Dr. Kairat Kelimbetov, Chairman of Astana International Financial Centre, and Eng Hani Salem Sonbol, CEO of International Islamic Trade Finance Corporation. Several prestigious awards at the individual level was also presented during the awards ceremony. The prestigious award for Islamic Personality of the Year 2018, was presented to Mr. Musa Abdelaziz Mohammad Shihadeh, CEO of Jordan Islamic Bank. GIFA CEO of the Year 2018 was won by Mr. Abdulmohsen Bin Abdulaziz Al-Fares, CEO of Alinma Bank while Mr. Khaled Jamal Al Kayed, CEO of Bank Nizwa was announced as Islamic Banker of the Year 2018. Award for the Most Outstanding Leader in Islamic Finance 2018 was awarded to Mr. Abdulbasit Al-Shaibei, CEO of Qatar International Islamic Bank. Mr. Nathif J. Adam was conferred the GIFA Special Award (Leadership Role) 2018 for his services to Islamic banking and takaful in Kenya.

ISLAMIC FINANCE PERSONALITY OF THE YEAR 2018 Mr. Musa Abdelaziz Mohammad Shihadeh

Mr. Abdulmohsen Al-Fares was presented with the “CEO of the Year” award for his leadership in the Saudi banking industry, and for the integral role he has played in the establishment, growth, and success of Alinma Bank, which has become a pillar of the Saudi economy, and a leader in modern, innovative, Shari’a-compliant products and services. Speaking on the award Al-Fares said: “I am delighted to have received this award from one of the world’s leading Islamic banking industry award programs. This award recognizes not only me; but also, all of my colleagues and staff at Alinma, whose efforts have made our collective success possible. Additionally, I am honored to have been recognized among other noteworthy individuals from around the world, who have dedicated themselves to the advancement of Islamic finance and the Islamic economy globally, and have contributed significantly in this regard.”

GIFA SPECIAL AWARD (LEADERSHIP ROLE) 2018 Mr. Nathif J. Adam

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GIFA CEO OF THE YEAR 2018

Mr. Abdulmohsen Bin Abdulaziz Al-Fares

MOST OUTSTANDING LEADER IN ISLAMIC FINANCE AWARD FOR 2018 Mr. Abdulbasit Ahmad Al Shaibei

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ISFIRE REPORT More than 55 awards were presented to winners from over 20 countries. Amongst the winners from Middle East were Dubai Islamic Bank, Siraj Finance, Aircraft Leasing Islamic Fund (ALIF), SEDCO Capital, ITS, OneGram and Dar Al Sharia. Other countries included South Africa (FNB Islamic Banking and Oasis Crescent); Indonesia (BAZNAS, Bank Indonesia, Indonesia Stock Exchange, BTPN Syariah); the UK (DDCAP, Gatehouse Bank, Islamic Reporting Initiative, Eiger Trading Advisors); Kingdom of Saudi Arabia (ITFC, ICIEC, Bank Al Inma); Malaysia (AmInvestment, BNP Paribas Asset Management, Silverlake, ITRAMAS Corporation, Cagamas, Salihin Advisory, MARC, MFPC, Dewina Brahim’s Holding, UiTM, Accounting Research Institute).

Commenting on the recognition of International Islamic Trade Finance Corporation (ITFC) as the “Best Islamic Trade Finance Institution 2018”, Hani Salem Sonbol, CEO, ITFC said: “ITFC is honored to accept this award from GIFA, which comes at a momentous milestone as we commemorate 10 years of development impact.” He added that the award is a validation of ITFC’s founding values of advancing trade and improving lives through Islamic trade finance. “The recognition underscores the ever-growing importance, relevance and viability of Islamic trade finance in rising above today’s global market volatility to do its part in facilitating a new era of global trade,” he further explained.

BEST ISLAMIC TRADE FINANCE INSTITUTION 2018 International Islamic Trade Finance Corporation (ITFC)

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GIFA MARKET LEADERSHIP AWARD 2018 (ISLAMIC FINANCE TECHNOLOGY)

GIFA ADVOCACY AWARD 2018 (ISLAMIC FINANCIAL TECHNOLOGY)

BEST UPCOMING ISLAMIC FINANCE INSTITUTION 2018

GIFA MARKET LEADERSHIP AWARD 2018 (ISLAMIC FINANCIAL INTELLIGENCE & RATINGS)

BEST ISLAMIC WEALTH MANAGEMENT QUALIFICATION 2018

GIFA CHAMPIONSHIP AWARD 2018 (SUSTAINABLE DEVELOPMENT GOALS)

Path Solutions

Siraj Finance

Shariah Registered Financial Planner (Shariah RFP) MFPC

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Mr. Mohammed Kateeb

Moodyâ&#x20AC;&#x2122;s

Islamic Reporting Initiative (IRI)

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ISFIRE REPORT Astana International Financial Centre received three awards during the gala dinner. The award for “Institutional support of Islamic Finance” was received by the AIFC Governor Kairat Kelimbetov. Director of the Department of Islamic Finance Alibek Nurbekov was awarded in an individual nomination for “Policy development in the field of Islamic Finance,” and the AIFC Bureau was awarded for “Initiatives for the development of human capital” in the field of Islamic finance. “This recognition inspires us to further promote the Centre as a regional hub for Islamic Finance. The AIFC has created a favourable ecosystem for the development of Islamic Finance and this direction is one of the main priorities of the AIFC. It should also be noted that the initiatives taken by the AIFC in the promotion and development of Islamic Finance, improved the position of Kazakhstan in the rating of Islamic Finance Country Index from 31 in 2017 to 24 in 2018 according to the Global Islamic Finance Report (GIFR 2018),” said Kairat Kelimbetov.

ISLAMIC FINANCE ADVOCACY AWARD (INSTITUTIONAL) 2018

UPCOMING PERSONALITY IN ISLAMIC FINANCE (POLICY DEVELOPMENT) 2018

HUMAN CAPITAL DEVELOPMENT INITIATIVE AWARD 2018

Astana International Financial Centre (AIFC)

Mr. Alibek Nurbekov

AIFC Bureau for Continuing Professional Development (CPD)

BEST SHARI’A COMPLIANT COMMODITY BROKER 2018

GIFA ADVOCACY AWARD 2018 (ISLAMIC FINANCIAL ORDINATION)

Eiger Trading Advisors Ltd

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S&P Global Ratings

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DDCAP was awarded ‘GIFA Market Leadership Award 2018 (Facilitation & Support)’, and were represented at the awards ceremony and following Gala dinner by David Testa, Executive Director. Stella Cox CBE, Managing Director of DDCAP, said on the news of the award: “We are truly delighted to receive the recognition of the GIFA Committee again this year with its validation of the commitment and investment that DDCAP has made, for more than twenty years, to provide intermediary asset facilitation services to support Islamic financial market requirement.”

GIFA MARKET LEADERSHIP AWARD 2018 (FACILITATION & SUPPORT) DDCAP Group

EMINENCE IN ISLAMIC FINANCIAL CRIMINOLOGY RESEARCH AWARD 2018

ISLAMIC FINANCE ADVOCACY AWARD 2018 (CAPITAL MARKETS)

MOST INNOVATIVE ISLAMIC BANK 2018

BEST ISLAMIC FINANCE SOLUTIONS PROVIDER 2018

Accounting Research Institute (ARI) UiTM

Bank of Khartoum

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Cagamas Berhad

Silverlake Group

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Malaysian Rating Corporation Berhad (MARC) was announced as the Best Islamic Rating Agency for the fourth-time. Reiterating the importance of credit rating agency ratings as important benchmarks for credit risk, MARC’s Corporate Services Head and Executive Vice President Ahmad Feizal Sulaiman Khan remarked that timely independent credit opinions were an “essential enabler” of improved market efficiency which in turn contributes to deeper and more liquid markets. “We are very grateful for this prestigious award; it speaks of MARC’s single-minded devotion to its responsibilities as a key information intermediary in an evolving marketplace”, he said. Oasis Crescent was named Best Islamic Fund Manager for 2018. Alongside this notable accolade, Oasis CEO, Adam Ebrahim received the GIFA Championship Award 2018 in the category of Islamic Asset Management. These awards follow the accolade Oasis received in 2017 from GIFA for the Oasis Crescent Global Equity Fund which was named the Best Global Shari’ah- compliant Equity Fund.

BEST ISLAMIC RATING AGENCY 2018 Malaysian Rating Corporation Berhad (MARC)

Commenting on the awards, Adam Ebrahim said that, “it is a great privilege and honour to receive the Best Islamic Fund Manager of the Year award as well as the Championship Award for Islamic Asset Management in 2018. Both these accolades reflect our unwavering commitment to deliver consistent investment excellence to our investors and we value the trust they place in us.” Other award winners were S&P Global, Moody’s, Bank of Khartoum, Bosna Bank International, Astana International Financial Centre, Meezan Bank and VG. Path Solutions walked away with 2 awards - GIFA Market Leadership Award for Islamic Financial Technology and GIFA Advocacy Award 2018 (Islamic Finance Technology) to Mr Mohammed Kateeb, Chairman and CEO of Path Solutions.

BEST ISLAMIC FUND MANAGER 2018 Oasis Crescent

BEST ISLAMIC BANK FOR SME BANKING 2018 BTPN Syariah

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GIFA CHAMPIONSHIP AWARD 2018 (ISLAMIC ASSET MANAGEMENT) Mr. Adam Ismail Ebrahim

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BEST SUPPORTING INSTITUTION OF THE YEAR 2018 Indonesia Stock Exchange (IDX)

BEST ISLAMIC BANKING WINDOW 2018 FNB Islamic Banking

FNB Islamic Banking was awarded Best Islamic Banking Window 2018, an award that the bank has won for the second consecutive year. “Winning this award for a second time on a global platform is certainly an honour that tells us that we are answering our customers’ needs,” said Mr. Amman Muhammad, CEO of FNB Islamic Banking. He added that “as a bank with a 180 years of a focused customer centric approach to helping our clients, this award is another proof point for us in showing that what we package as innovative solutions for both business and retail are received by the market as worthwhile answers to our customers. Winning the award is an affirmation of this.”

BEST EMERGING ISLAMIC CAPITAL MARKET AWARD 2018 Indonesia Stock Exchange (IDX)

The Indonesia Stock Exchange (IDX) bagged two awards: Best Supporting Institution of the Year 2018 and Best Emerging Islamic Capital Market 2018. Both awards were received by Mr. Hasan Fawzi, Director of Development at IDX. “The achievement of IDX by winning two categories at GIFA 2018 shows the recognition and global appreciation of IDX’s commitment, consistency and hard work together with relevant stakeholders in developing the Indonesian Islamic capital market,” Mr. Hasan said. Faculty of Business & Management (FBM) of UiTM has been awarded Best Islamic Finance Qualification 2018 for Bachelor of Business Administration (Hons.) in Islamic Banking. This prestigious award recognizes the contributions played by FBM in providing talented human capital for the Islamic finance industry in Malaysia. FBM is the pioneer institution to offer qualification in Islamic finance at the bachelor’s degree level in Malaysia.

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BEST ISLAMIC FINANCE QUALIFICATION 2018

Bachelor of Business Administration (Hons) Islamic Banking UiTM

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Gatehouse Bank was named Best Islamic Investment Bank 2018, in recognition of its successful Real Estate Investment Advisory and Build-to-Rent capabilities. Gatehouse Bank CEO, Mr. Charles Haresnape commented: “We are delighted to win this award in recognition of our real estate investment services.” He added that the UK’s housing shortage is there for all to see but we’re trying to do our bit to help address it. By building high quality homes we are able to provide housing in areas that often need regeneration as well as healthy, ethical returns for investors. International Turnkey Systems (ITS) was awarded Best Islamic

BEST ISLAMIC INVESTMENT BANK 2018 Gatehouse Bank

Finance Technology Provider 2018. Commenting on the accolade, Mr. Esam Alkeshnam, CEO of ITS said: “ITS is pleased to win this award from the esteemed Global Islamic Finance Awards (GIFA) programme, underscoring our commitment to delivering world class financial technology solutions.” Mr. Alkheshnam added: “I believe that the Islamic Financial Services industry is entering a new era driven in large by Financial Technologies (Fintech). ITS is working to equip financial institutions with the technologies that they need to remain competitive and succeed in this new digital space and this award is testimony to our continued dedication to deliver on that promise.”

BEST ISLAMIC FINANCE TECHNOLOGY PROVIDER 2018

BAZNAS (National Amil Zakat Agency) of Indonesia received the GIFA Championship Award 2018 for zakat management

International Turnkey Systems (ITS)

BEST ISLAMIC FUND 2018

Aircraft Leasing Islamic Fund (ALIF)

BEST EMERGING ISLAMIC SHARI’A ADVISORY FIRM 2018 Salihin Shariah Advisory

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category, making it the first zakat institution in the world to receive this prestigious award. Prof. Dr. Bambang Sudibyo commented that the award is evident of the recognition given to BAZNAS as a zakat management organisation that is carried out in accordance with the standards of professional Islamic financial institutions. The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) was awarded the Global Islamic Export Credit and Political Risk Insurance Award 2018. The

GIFA CHAMPIONSHIP AWARD 2018 (ZAKAT MANAGEMENT) BAZNAS (Badan Amil Zakat Nasional)

UPCOMING SHARI’A SCHOLAR IN GLOBAL ISLAMIC FINANCE 2018 Mr. Šukrija Ramić

GIFA SPECIAL AWARD 2018 (PROMOTION OF ISLAMIC BANKING IN SEE) Bosna Bank International (BBI)

Chief Executive Officer of ICIEC, Mr. Oussama Kaiss said, “It is truly an honor for all of us at ICIEC to receive this prestigious international recognition”. Mr. Kaissi, added that “The Global Islamic Export Credit and Political Risk Insurance Award 2018 is a valuable testament to the innovative Shari’a-compliant services we are offering to our business partners in this field.” This year, GIFA Awards Committee introduced several new categories. Best Islamic FinTech Product/Initiative of the Year 2018 went to OneGram, Dewina Brahim’s Holdings was

GIFA LIFETIME ACHIEVEMENT AWARD 2018 Mr. Husein-ef. Kavazović

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announced as the Best Halal Brand Award 2018, Best Central Bank of the Year 2018 was conferred to Bank Indonesia while Central Banker of the Year 2018 was awarded to Mr Ahmed Osman Ali, Governor of the Central Bank of Djibouti. Meanwhile, Best SRI Sukuk of the Year 2018 went to ITRAMAS Corporation. The award for the Best Central Bank of the Year 2018 was conferred to Bank Indonesia. Commenting on the award, Executive Director of Bank Indonesia Communication Department, Mr. Agusman said that this award is an international recognition of the many initiatives carried out by Bank Indonesia in developing Islamic economics and finance in the country and internationally. Commenting on the Awards Ceremony, Dr Sofiza Azmi said: “We are delighted to see so many luminaries and proponents of Islamic finance here with us this evening as well as a large number of foreign guests from so many different parts of the world. Their

BEST ISLAMIC FINTECH PRODUCT/INITIATIVE 2018 OneGram

BEST CENTRAL BANK OF THE YEAR 2018

CENTRAL BANKER OF THE YEAR 2018

BEST SRI SUKUK OF THE YEAR 2018

GIFA BEST HALAL BRAND AWARD 2018

Bank Indonesia

ITRAMAS Corporation

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Mr. Ahmed Osman Ali

Dewina Brahim’s Holding

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ISFIRE REPORT tonight reflects not only the significance of this prestigious GIFA Award but also the universality and diversity of Islamic finance today.” Ms Lisa Doughten, Chief of UNCERF Secretariat together with President Ismail Omar Guelleh were the Chief Guests of the night. In her keynote speech, Ms Doughten called for the Islamic finance community to come together for humanitarian aid assistance. “…the world of humanitarian assistance, and the world of Islamic finance, are not that far apart. In fact, through Zakah, sadaqah, and the institution of waqf, the Islamic finance sector was inherently built on the notion of humanitarian assistance,” Ms Doughten said. Addressing the room of 200 dignitaries and guests, Ms Doughten pointed out that “Already now, the concept of Islamic Social Finance has laid a great foundation for such breakthroughs, as have ‘green sukuks’ and other socio-economic instruments

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such as zakat, waqf, and qard al-hassan.” Ms Doughten also announced that the GIFA Awards Committee is considering to introduce a new top category’ award in 2019 – the GIFA Award for Humanitarian Assistance. “With the goal of raising awareness for the growing need for humanitarian assistance, and indeed to inspire new momentum for the message of people, planet, profit, and purpose - which has always been so intrinsically connected with Islamic Finance - the Awards Committee of the Global Islamic Finance Awards has decided to introduce the GIFA Award for Humanitarian Assistance in the 9th GIFA Ceremony,” said Ms Doughten. She also commended the management of GIFA for their visionary thought leadership and determination in turning ambitions into action.

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