العدد الحالي: تشرين 1/اكتوبر 2018       اختر عدد :
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كلمة المجلس العام

Abdelilah BELATIK

Secretary General of CIBAFI

Welcome to the 25th issue of the Global Islamic Economics Magazine. As always, we keep you up to date on industry happenings and offer expert opinion from some of the industry’s foremost thought leaders on a diverse array of issues.

This month I would like to bring particular attention to an important report that has been published bythe Islamic Research and Training Institute (IRTI) of the Islamic Development Group (IDB), and the Islamic Financial Services Board (IFSB).

The report, entitled the "Islamic Financial Services Industry Development:  Ten-Year Framework and Strategies - A Mid  Term Review”, assesses the relevance of the recommendations made in 2007 by the IDB, IRTI and IFSB in the "Islamic Financial Services Industry Development:  Ten-Year Framework and Strategies" (Ten-Year Framework), a document which was created as a general guideline from which national authorities may find benefit when designing Islamic financial services industry (IFSI) development initiatives, and looking to integrate these  initiatives into their national financial sector development policies.

However, considering the dynamic nature of the business environment, and the tumultuous business landscape since 2007, an assessment of the Framework was vital to ensure that the Ten-Year Framework not only continues to remain current, relevant, and beneficial, but also serves to provide resilience and stability to the IFSI as it moves forward.

The Mid Term Review assists stakeholders to understand not only the progress of the implementation of the Ten-Year Framework and Strategies, but also the development in the global financial system post-crisis, the impact of the Crisis on the Ten-Year Framework and Strategies, and thus the relevance of the Framework post crisis. The Report also underscores the new challenges and priorities for the IFSI going forward.

The Mid-Term Review utilised a rigorous and comprehensive methodology that took into account feedback from regulatory and supervisory authorities, as well as market players and leading industry experts. The feedback was obtained via several platforms that were organised by the IFSB and IRTI, including a Roundtable held in Doha, Qatar; a Forum on preliminary findings of the mid-term review held in Kuala      Lumpur, Malaysia; and a High-Level Review Committee Meeting that took place in Istanbul, Turkey. Most noteworthy though is the fact that an industry-wide survey, covering the regulators and market players of the IFSI, was also conducted in order to fully understand the various challenges and opportunities currently facing industry stakeholders.

As well as a rigorous methodological approach that draws from the views of a wide range of profiles including prominent academia, regulators, practitioners, scholars, and various committees, the Mid Term Review is also highly valuable for a myriad of other reasons.

Firstly, the report offers an assessment of the progress that has been made over the last 7 years in the implementation of the initial Ten Year Framework recommendations. Secondly, although the recommendations from the original Framework have shown substantial resilience, the Mid Term Review offers new recommendations that take into consideration the growing complexity of the environment in which our institutions operate, and the challenges that a changing global financial system present to the IFSI.

 

The new recommendations can be summarized    into three themes or categories: ‘Enablement’, ‘Performance’ and ‘Reach’. ‘Enablement’ appeals for the development of a deeper appreciation of the correlations between different components of Islamic financial services in order to enable a more informed strategic planning process to be undertaken. ‘Performance’ calls for stakeholders tofoster and embrace innovative business models, including the leveraging of new technologies and delivery channels, in order to offer pioneering Islamic financial services. In terms of ‘reach’ the new recommendation entreaty strengthened contributions to the global dialogue on financial services; offering principles and perspectives that work towards enhancing the global financial system.

 

As well as new recommendations the report offers metrics to measure performance that were not available in the original framework. Sixteen key performance indicators (KPI’s) are proposed that will enable the progress of the implementation of the recommendations to be tracked and weaknesses to be addressed.

As strategic implementation is often the most difficult area of strategy, the Mid Term Review offers an Implementation Plan. The Implementation Plan outlines the roles and responsibilities of the various industry stakeholders in ensuring the successful implementation of the recommendations and underscores the importance of a collaborative effort in order to realize our shared vision of a robust Islamic Financial Services Industry.