When the Islamic economy first emerged in a big way after the global financial crisis of 2008, hopes were sharply heightened towards the world moving into a new era of growth and prosperity.
More significantly, these hopes were fuelled by the potential of Islamic finance to restore market stability through ethical practices.
Encouraged by the double-digit year-on-year growth of Islamic finance over the past decade, experts have projected a crucial need for developing industry-specific skills and talent to accelerate the dynamism of the Islamic finance industry.
Although Islamic finance still accounts for less than 1 per cent of the global financial sector, various academic institutions across the world have already started designing curriculums in Islamic finance and are committed to talent development for this unique industry.
However, despite such efforts, industry experts say more needs to be done for the simple reason that a lack of qualified Islamic finance graduates with the required talent could impede the growth of the Islamic finance sector and the wider Islamic economy.
In other words, the message out there is clear – a mismatch between the academic qualifications of fresh graduates and the skills required by the industry could prove costly for the emerging Islamic economy sector. The observation is based on the fact that higher education institutions most often equip students with skills that are theoretical rather than practical. This means a disconnect between the competencies the graduates bring to the table and the real-time needs of the banking and finance industry.
The more sceptical of these experts have pointed out that the real Islamic finance industry is not more than a replica of conventional finance with a Sharia board assuring its compliance to Islamic standards. These experts believe that the distinction between the two forms of finance – conventional and Islamic – is not immediately apparent and therefore experience in conventional banking and finance is adequate enough for professionals looking for a career fit in Islamic finance.
Regardless of the debate, what we need today is to establish a more comprehensive approach to Islamic finance and drive closer collaboration between the industry and the academia. More investments need to be allocated for raising awareness and developing knowledge on the nature of Islamic finance.
Additionally, new systems and technologies that help to establish the foundation for the Islamic finance sector to become more competitive and efficient should also be a key focus.
Yet another challenge with the maturing of the sector is the lack of an international accreditation body for Islamic finance. Accreditation is a significant achievement that articulates the maturity and growth of Islamic finance – both to establish the quality of products offered and to evaluate the performance of employees.
There are no specific accreditation standards for industry-based learning programmes in Islamic finance that show that training programmes lead to the development of competencies required in the marketplace.
In any emerging sector, we need to carefully review the diversity of cross-border regulations and operations before we can identify global best practices and solutions. This is particularly so in the Islamic finance industry, where understanding of Sharia-based systems and procedures sharply varies among practitioners and countries.
The Islamic finance sector is today quickly shaping up as a demand-driven sector with a scarce talent supply. This should compel the industry to act. If the issue of honing suitable talent to fit the market needs remains unresolved, it would not be an exaggeration to say that the growth of Islamic finance could be short-lived.
I call upon each one of us as stakeholders in the Islamic economy to commit ourselves today to implement the right steps for a better future and to developing a competent new generation that will drive the growth of this important sector.
Abdulla Mohammed Al Awar is chief executive of the Dubai Islamic Economy Development Centre.
(The National Business / 18 June 2015)
---Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com
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