Making Things Simple - Ensuring Technology and Islamic Financial Instruments Complement Each Other

I had the opportunity to present my thought on Technology and Islamic Finance in late 2008 at FT Intelligence Summit in London.

The majority of Islamic banks are small and do not have sufficient budget to procure top of the line technology solutions in their operation.

In addition, these banks have limited IT personnel to direct its technology initiaves.

Using this as the backdrop, I put across a simple message that the selection of their core banking systems should be done with utmost care. Strong and capable vendors with a complete offering of core banking and other modules normally used by banks should be considered seriously and given priority.

Once a good solution is chosen, the rest of the modules, should, if possible be chosen from the same vendor so that interfaces and integration issues are minimized. This will result in a fast roll out initially and lower maintenance over the years. In other words, the right selection of the solution can result in cheaper cost of ownership (TCO - Total Cost of Ownership)and less hiccups..

Effectively, work smart by making things simple. Stick to one vendor as much as possible.


You will find my full presentation here.

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Firm Yet Flexible - Unique Aspects of Islamic Finance

This is how I see the uniqueness of Islamic Finance - It is Firm Yet Flexible.

Firmness is due the strict Shariah prohibition on Interest (Riba), Speculation (Maisir), and Gharar (uncertainty).

Flexibility refers to the various financial contracts that contracting parties (such as Islamic bank and its customers) can enter into, be it Murabahah (Mark-up Sale), Ijarah (Leasing) etc.

However, once contracting parties have chosen a particular contract, the Firmness sets in again as each party is required to adhere strictly to the terms and conditions set up by Shariah in respect of that contract. The terms and conditions of each financial contracts have been laid down by the Shariah scholars so as to ensure fairness between each contracting parties.

Firm, Flexible and Firm again. It is an interesting phenomena of Islamic Finance which you are not likely to find in other banking systems..

I wrote this paper as part of my work for Oracle Financial Services Software Pte Ltd (OFSS), one of the leaders in the provision of Technology Solutions for the Conventional and Islamic Banking industries.

You can read the paper here.

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Integrating Technology Into Islamic Finance

My comments appeared in Islamic Finance News early this year. You can read it here

Financial Crisis - Opportunities for Islamic Finance Solution Providers

The sukuk default trend happening in the GCC last week is disheartening and more defaults are expected.

To the technology providers of Islamic Finance industry, the future, at least on the surface, may be rough. But for the smart and far-sighted companies, that are willing to re-architect their offerings, opportunities are still a plenty

I put down my thoughts on the opportunities that can be seized by these smart companies in an article that I wrote for Oracle Financial Services Software) last year. And it may be timely to review this opportunity again.

You can find the article here..

I also had the opportunity to post this article at the professional network site, LinkedIn. You can see some comments made by some of the participants if you visit Islamic Banker Group in LinkedIn