Digitisation is future of Islamic banking, say experts

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Digitisation is future of Islamic banking, say experts
Musa A.Z. Shiladeh, vice-chairman and CEO Jordan Islamic Bank, and Shaker F.A. Zainal during the 7th World Islamic Retail Banking Conference in Dubai on Tuesday.

Dubai - "The reality of today's world is that social media, peer-to-peer transactions, and crowdfunding are real phenomenon."

By Rohma Sadaqat

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Published: Tue 17 Nov 2015, 11:00 PM

Last updated: Wed 18 Nov 2015, 9:15 AM

Banking and finance experts at the seventh World Islamic Retail Banking Conference, or WIRBC, on Tuesday discussed a number of issues and trends facing the international and regional banking sectors.
The event gathered global Islamic retail bankers, regulators, Shariah scholars and retail banking technology experts from around the world to explore and analyse all aspects of innovative, technically advanced and competitive strategies necessary to provide customers with a smart Islamic retail banking experience.
Asad Batla, head of consumer banking at Bank Nizwa, in a CEO roundtable, said that today's world is actually hierarchal and that it is organised centrally. He stressed that Bitcoin and Blockchain are real terms now, and that cryptocurrencies have developed and become more serious.
"Blockchain has been adapted by not just retail banking, but also by corporate banking and trade finance. The reality of today's world is that social media, peer-to-peer transactions, and crowdfunding are real phenomenon. We as bankers need to be running in the compliant system of central banking, as well as be aware of this development, and collaborate and incorporate, otherwise what will happen is that we will lose on business," he said.
He pointed to examples of success such as Airbnb, Uber and PayPal. "Airbnb is one of the largest hotel chains in the world without owning a single hotel room. Uber is the largest taxi company in the world without owning a single taxi; they own an application and employ drivers that were without jobs previously. These companies are making money as well as a difference in the world. Parallel industries like PayPal, facebook, Google are all getting into finance. Instead of looking at them only as a threat, look at them as an opportunity in a collaborative world. We, as bankers, cant afford to close our eyes anymore. There are threats as well as opportunities out there."
Rajashekara V. Maiya, associate VP and global head of product strategy & pre-sales at Infosys Finacle, noted that the world had changed and that new, digitally enabled players are disrupting banking. He also added that digitisation is the future of Islamic banking and that it was important to have a customer-centric approach. The customer, he said, is the focal point of the business. "Options are many, and loyalty is limited. Convenience, speed and personalisation are all needed, since customers today seek partners, not providers. The future lies in opening up your bank." Speaking on the importance of bank branches in the region, Shaker F. A. Zainal, regional head of distribution at Mashreq, said that, based on recent research, a customer visits a bank branch three times a year on average.
"People like branches because they trust them. Branches today still matter and are critical to attracting customers. 60 per cent of potential customers will not stop to consider you if you don't have a branch." When dealing with customers, he noted that it is important to focus on instant fulfilment, as well as focusing on relationships and customer engagement outside of the bank branches.
- rohma@khaleejtimes.com

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