Today I had the pleasure of sharing experiences with some post-graduate individuals on the new happenings in Islamic Banking in Malaysia. I thoroughly enjoyed the session and answering their “tough” questions and happy to see so many passionate people in Islamic Banking in one room.

One of the questions that resounded loudly throughout the room was the question regarding product development. I was asked if businesses greatly influence the development of a product or does the Sharia Advisory Council have a stronger say. An interesting question but I think the room agreed that the main influence will come from consumers; it is still consumer demand that drives it.

We could have developed the most Sharia compliant structure that even conventional banks do not offer and create significant differentiation, but again the next question would be: Would consumers understand, accept and buy the product? A lot of resources will be invested into such development, but the key question is that who is going to take it. While it is ideally attractive but practically defective. Not because there is a Sharia issue or product design, but whether it will suit the consumers  needs simply and practically.

So, Islamic Banking is also driven by the same consumers who drives the conventional businesses. How then, do we change the mindset that Islamic Banking should be more than just a copy of conventional products? Economically, we are set In thinking that banking as a way to expand wealth. One of the participants asked if there is a possibility to change a whole culture to understand and view Islamic Banking as a viable distinct alternative to capitalist conventional banking. Whether culturally the mindset of consumers can be changed to demand Islamic Banking provide different solutions to the same problem, specifically introducing a totally different way of banking. An interesting thought if it can be done, but it feels nothing short of re-genesis to make that cultural change. Someone has to start that spark, and we really need that someone.

In all my sincerity, I am glad to know there are individuals who do understand the challenges in Islamic Banking, no matter what their aspirations. I am but a tiny speck in their learning development and hope to see more individuals like these who are able to one day make a difference in Islamic Banking.

As requested, I attach the presentation slides used today and hope it can be of some use to its readers.

Pool Management, Profit Calculation & Distribution Mechanism (ppt)

Thank you friends, for your support, and don’t give up the good fight, no matter how tough the challenges might seem.