Event Review: Islamic Finance Services Conference (ISFC) 2013

Date of Event: 1 October 2013

Venue: Orchard Hotel Singapore

Time: 8:30am – 5:00pm

Organisers: Gulf Asia Shariah Compliant Investments Association (GASCIA), Singapore Business Federation, Singapore Malay Chamber of Commerce and Industry

Like a fish out of the water, I was baffled with all the Islamic Financing jargons being tossed around in the Islamic Finance Services Conference (ISFC).  Only vaguely aware of the existence of Islamic banks in Singapore, what was being discussed was entirely foreign to me so I had to google the terms to understand what was going on.

For those who are unaware, the main difference between Islamic banking system and conventional banking system is the existence of usury.

As it was mentioned in the Holy Quran:

In addition, in the Islamic system, Real Asset is a product and money is a means of exchange whereas for the conventional system, money is a product other than being a means of exchange and store of value.
The event commenced with a Keynote Address by Mr Zainul Abidin Rasheed (Adviser to GASCIA; Singapore Ambassador to Kuwait) who stated the importance of collaboration between Malaysia and Singapore in achieving a shared vision of a global Islamic Finance (IF) industry. He also mentioned how Islamic banks can serve as alternatives to financing.

After the introduction, there was a panel dialogue titled ‘Building an Islamic Finance Ecosystem’. Here, the speakers discussed on the difference between Malaysia’s highly developed Islamic financing ecosystem and Singapore’s which is still in its infancy stage. Mr Arshad Ismail, executive Vice President and Head of Business Development Maybank Islamic, stressed upon the fact that much time and resources are needed to fine tune the ecosystem to make it robust and how support and guidance from the authorities can help to expand the industry further.

Mr Nik Mohamed Din Nik Musa[1], and Mr Nazmi Camalxaman[2], expounded on ‘Markets, Products and Opportunities’. Mr Nik Mohamed Din focused on Malaysia’s IF industry. He talked about the two different ways on how the islamic banks can co-exist with the conventional banks which are: a dual financial system (Malaysia, Kuwait, Qatar) whereby both banks exists in two separate entities, and another which has both banks embedded within the same system (Iran, Saudi Arabia, Turkey).

He acknowledges the strong progress in the banking, takaful and capital market and how the Malaysia’s sukuk market has world-class infrastructure. Mr Nazmi, on other hand, stresses upon the need  of Singapore to create a niche in the IF industry and to use Malaysia’s asset management model as a blueprint. He asserted that it is also important to clear misconceptions of Islamic finance to the mass.

The next topic was on ‘Islamic Finance Human Capital Needs, Issues and Solutions’.  The much needed talents for the future of IF industry was deliberated by Dr Mohamed Akram Laldin [3] and Dr. Mohamed Eskandar Shah Mohamed Rasid[4].

It was noted that there is a shortage of shari’ah trained scholars in the IF industry and how a comprehensive talent development program is needed to promote standards and accreditation of IF industry. One way of tackling this issue is by capitalizing on the ranking of Singapore’s local institutions as Malaysian universities are struggling.

Thereafter, a panel dialogue session titled ‘The Roles, Responsibilities and Challenges of Shariah Scholars’ was held. As some of the industry players are not well-versed on IF, scholars are needed. Here, Dr Ashraf Mohd Hashim[5] emphasized on shari’ah governance which can help to ensure 1) strict shari’ah compliant 2) instilling public confidence 3) promote financial stability. A product cannot be claimed as shari’ah compliant unless it is backed up with scholar supervision.

After a hearty lunch, Mr Raja Mohamad [6]gave a talk on shari’ah-compliant funds which are funds that fulfills investors Shari’ah fulfillment as advised by independent Shari’ah advisory panel or Shari’ah mandate. Mr Raja also mentioned the differences between shari’ah-based products and shari’ah-compliant products. One of the differences is that a shari’ah-based product emphasises on the Holy Qur’an and Sunnah whereas a shari’ah-compliant product emphasises on jurisprudence.

The audience is then broken up into 3 groups. Each group will be diverted to a different room where different topics are explored which are: ‘Fatwas and Scholar Responsibilities’, ‘Shariah Compliant Business and Benefits’ and ‘Selling IF Products: Approaches and Challenges’.

A short networking session then ensued, followed by a Panel Dialogue Session titled ‘Challenges and Opportunities for Islamic Finance Service Providers in Singapore and the Potential for Collaboration with Malaysia’. Mr Ian Yeo[7] states the need of the IF Industry to get more publicity from the media to increase awareness, educate the mass and convince them of the importance of islamic banking. What is most interesting was the challenge of integrating Islamic Banking with Gen Y which was brought up by Mr Jasani Abdullah[8]. He underlines that with mobile and internet banking, it is important that the IF industry figures out how to make Islamic Banking more friendly for the younger clients.

When asked about how the conference benefited Marhamah Senewi, a student from Madrasah Al-Junied Al-Islamiyah, she said, “it re-emphasised what I learnt from my IF education from school and how it is being used by the IF industry.”

Unsure of the Islamic Banking Industry, I sought someone to explain if our local IF industry has a chance for further growth. “Definitely,” Haji Razli Ramli[9] agreed, “There is a growing demand. Singapore has the potential to expand and it has good financial infrastructure. If Singapore and Malaysia were to work together, we have a chance to be dominant in the global IF industry.”

Being an inaugural event, one of the GASCIA organisers, Mr Adzfar Alami, hopes that the event will be held annually. “ Its very heartening to see a lot of people signing up and it won’t be surprising if the demand for such conferences will continue. There will definitely be discussions in holding the next one as well.

After the end of the conference, there was definitely a diffusion of IF knowledge to my mind. I learnt many interesting things and I pray that Islamic Banking will be recognized one day in Singapore as a reputable alternative of banking.

Nur Hidayah Murad
Hidayah is a student of School of Film and Media Studies at Ngee Ann Polytechnic undertaking a Diploma in Mass Communications.