More than 450 leaders in the international Islamic banking and finance industry engaged in critical discussions on strengthening international industry connectivity in order to enable further growth for Islamic finance in Asia. They were speaking at the third annual World Islamic Banking Conference: Asia Summit in Singapore.
The global Islamic finance industry has over the past decade witnessed a transition into a dynamic, fast growing and competitive form of financial intermediation servicing an increasingly international client base.
With global Islamic banking assets with commercial banks expected to cross the $1.1 trillion mark in 2012, and the Islamic finance industry now evolving into a progressive, comprehensive and competitive component of the overall financial sector, industry leaders are now, more than ever, emphasising the need to strengthen the connectivity between key markets for Islamic finance and mobilise significant cross border deals that will develop the capability for Islamic finance to compete more effectively on a global scale.
The two-day event, held under the official support of the Monetary Authority of Singapore, began with an inaugural address by H.E. Ravi Menon, governor of the Monetary Authority of Singapore.
The inaugural address was immediately followed by an opening keynote session that addressed the challenges and opportunities inherent in the increasingly global geographic footprint of Islamic finance and also discussed the national and international initiatives that will ensure consistency and foster greater inter-connectedness across key jurisdictions for Islamic finance.
A key highlight was the high-profile Power Debate session led by internationally respected CEOs and industry leaders. Moderated by Haslinda Amin of Bloomberg Television, it looked at the expanding role of Islamic finance as a conduit for trade and capital flows between Asia and the Middle East and also discussed how Islamic financial institutions could better develop the capacity to structure large-scale multi-currency and cross-border transactions.
Speaking to the media present at the event, David McLean, chief executive of the World Islamic Banking Conference: Asia Summit, noted that “Asia is becoming an increasingly attractive destination for investments that are Shari’ah compliant. To reap the full benefit of the region’s rapid expansion and robust development, there is a need to press on towards achieving global connectivity and deepening economic cooperation with various key centres for Islamic finance. In order to better facilitate cross-border relationships, more intensive international co-ordination of regulatory approaches, supervisory oversight and industry practices is needed”.
He also said that “as interest in Islamic finance expands across Asia, an increasing number of Middle Eastern investors are looking at opportunities to deploy their capital in the region and Islamic finance is perfectly positioned to act as a catalyst to further bridge capital flows between Asia and the Middle East.
“An ongoing dialogue between key regulators, industry practitioners and market participants representing the two key centres for Islamic finance, i.e the Middle East and Asia, is vital to achieve greater international harmonisation in the architecture for Islamic finance”, he added.
A similar view was expressed by Hussain AlQemzi, chief executive officer, Noor Islamic Bank and group chief executive officer, Noor Investment Group, who said that “in order to ensure an orderly evolution of Islamic finance from a niche segment into the mainstream international financial markets, it is vital to further enhance the industry’s capabilities for cross-border activities, which in turn will encourage innovative product development, robust and standardised regulatory frameworks and the long-term stability of the industry.
“What the industry lacks at the moment is the breadth and depth that investors enjoy in the conventional market. An inter-linkage between the key Islamic financial centres will facilitate investor access to a wider range of Shari’a-compliant products beyond those available in their domestic market”.
He also said that “the annual World Islamic Banking Conference: Asia Summit is becoming an increasingly important platform that facilitates dialogues between the two key centres for Islamic finance – Asia and the Middle East. The theme for this year, Islamic Finance in Asia: Strengthening International Connectivity and Capturing Cross-Border Opportunities”, highlights the tremendous potential for significant cross-border transactions that the Islamic finance industry must tap into. As a key industry player we are keen on exploring these unique opportunities.”