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Opalesque Islamic Finance Intelligence

Opinion Column: Voices of the Unheard - Salvaging the Next Generation of Islamic Bankers By Mohammed Khnifer

Friday, January 21, 2011

Mohammed Khnifer is regarded as part of a second generation of Islamic banking practitioners who have a solid academic background in Islamic finance. He is a holder of an MSc. in Investment Banking Islamic Finance from Reading University and is a Chartered Islamic Finance Professional (CIFP) from INCEIF. He is one of the most prolific and well-known journalist specializing in Islamic Finance today. For the past six years he has been in charge of the editorial content for the Islamic Banking section of Al Eqtisadiah (Kingdom of Saudi Arabia). By 2011, he is expected to earn his MBA in Islamic Banking & Finance after he won the Silver Scholarship Award from Bangor University. He has authored various papers and articles on Islamic finance (see reference link).

Haseeb Muhammad was supposedly destined to become a so-called Islamic banker. Instead, he is now working for an international hotel chain! This is the untold, and unfortunate, story of how the Islamic Finance industry is about to lose its second generation of bankers who we never tried to connect with. These are the desperate voices of the unheard.

"I was forced to earn my livelihood in a complete contrary industry to my relevant degree", said the holder of MSc, Islamic Banking & Finance. "Is this the treatment we expect to have for those who have chosen ethical Banking as their career", he added while feeling some regret of taking this costly degree. "Isn't that just a waste of talent", he wonders.

Unfortunately, many of these graduates, who are not lucky enough to hold a nationality of a country that really does cater to the development of its Islamic Finance human capital, might follow Haseeb's path if the stakeholders of Islamic Finance (IF) do not interfere and save them from this grim reality.

High Caliber
Islamic finance courses have become cash cows to other institutions who jumped to the bandwagon. But we are not talking here about online degrees which might be questionable in terms of quality of the training and education. Instead, we are talking about the cream of the crop. Those savvy graduates who have graduated from the Top Business School in Europe that offer a blend of conventional and Islamic type of financing degree.

For instance, Henley Business School is in the forefront of IF education in the UK - with the first collaborative degree, the first programme to educate students alongside professionals in another country, and a roster of internationally acknowledged specialists and practitioners in the field. ICMA Financial Studies Center at Henley boast of its MSc in Investment Banking & Islamic Finance degree. Unlike the other degrees, this one has as academic portfolio constitutes of almost 65% mainstream finance & 35% exposure to specialized area of finance, resulting in unique technical skill that proves useful in structuring corporate & debt products.

The MSc is taught jointly with INCEIF (International Centre for Education in Islamic Finance). At the end of third term, the students become Chartered Islamic Finance Professional (CIFP). Indeed, the second generation of Islamic bankers is in the making and for a handful of them, the aggregated global professional qualifications they have are hardly seen in the practitioners of the Islamic Banking of today. The first generation of Islamic bankers is the group who crossed the trading floor from conventional to Islamic banking to take up employment and were provided with either bespoke training or learned their Shariah compliance on the job, as David Williams, the Chief-in-Editor, of Islamic Banking & Finance magazine highlights in his editorial about the upcoming wave of the second generation of Islamic Bankers.

According to a research paper by INCEIF, in the next decade, the Islamic finance industry need to produce 50,000 graduates. However, a cursory review of the possible number of graduates produced by various institutions of higher learning does not exceed 1,000 per year.

Brave New World
In a perfect world, these IF graduates should have higher starting salary due to the technicality of their field. This is what the industry would regard as a premium for talented staff. "Even though there is a propaganda of shortage of islamic bankers, none can be seen in the recruitment process", said Aatef Baig who has recently graduated from ICMA. "Our students are finding that searching for jobs in IF has never been harder at a time when demand for IF services has never been stronger", wonders John Board, Dean of Henley Business School.

Grim Reality
"As a Business School, we train people for active professional involvement and rapid career progression. Thus, the apparent paucity of employment prospects is puzzling - times may be tough for banks, but their apparent unwillingness to develop this sector and to make the HR investment necessary to ensure its long term viability will surely damage the IF industry in the UK", he added. "While HR policies are the preserve of the firms implementing them, the apparent lack of opportunity for well qualified specialist masters students is a matter for some concern - especially in the UK which has often claimed its wish to be a significant participant in the global market for IF products and services".

Aatef, who aspires to join an Islamic private equity firm, concurs that this grim reality could possibly "demotivate young students that think of undertaking the islamic finance specialized courses."

"the urge of true ethical banking is now fading away", said Haseeb who now labeled himself as "Depressed & Demoralized Islamic Banking practitioner." "What good is my IF education especially [now] that I am unable to implement it in reality", he elaborated after moving to the hospitality industry." "I have knocked for any opportunity at almost all the Islamic Banks of UAE for past six months but none even bothered to call back , instead jobs are just being distributed to people who are well connected", he elaborated. Professor Board thinks that it is likely that the IF industry has turned its back on these graduates. He concurs that this treatment may demolish the 2nd layer of IF bankers.

The Islamic finance industry is losing slowly its human intellectual capital. Once they graduate, they see many closed doors in front of them. Recruitment agencies do not come near them as they are not considered their main profitable resources. The deep pockets lie in filling the job opening for the senior level. Where shall these talents go?

Malaysia is a prime destination as it exports its own IF talents worldwide. However, banks operated in Malaysia are unable to hire nor train these foreign Muslim students as they come under an employment law where each bank has a quota for hiring foreigners. If you ask any of these IF graduates, they would say they are willing to take a haircut on their salary as long as they are learning from the BEST.

Trees die standing up
Our sector is supposedly to be reshaped from top to bottom by graduates from Far Eastern, Middle Eastern and Western universities. However, the talents of our future leaders are being killed slowly, painfully and silently. These are the voices of the unheard!


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