Product Branding and Market Development –
Global Growth Opportunities
Daud Vicary Abdullah
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Agenda
•
Facts and Figures
•
Spreading the Word
•
About Islamic Finance
•
Opportunities
•
Challenges to Development
•
What is the marketing approach ?
•
Conclusion
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Fast facts and Figures
Size
USD 350-500 million
Growth
Average 15% annually
No of players
More than 267 IFIs and Islamic Windows
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Key Markets
Malaysia, Saudi Arabia, Bahrain,
UAE, Iran, Pakistan, Bangladesh,
Egypt, Indonesia, Brunei
Major Institutions
IFSB, AAOIFI, IIFM, IOSCO
Major Financial Centres
MIFC, DIFC, Bahrain, London
Spreading the Word
• Islamic banking, which implies the avoidance of interest, has become a
Substantial industry in the last four decades.
• By turning to real marketing, Islamic Financial Products could achieve a
much wider outreach and awaken sleeping potential.
• There is not much communication about the specific benefits
distinguishing Islamic Financial institutions from conventional
counterparts.
• Islamic Banking is an opportunity and has an exciting future
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About Islamic Finance
•Islamic Finance is demand driven, Muslims want to have financial
solutions in line with their faith.
•All Islamic banking products must be created and offered according
to strict Shariah law
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•To ensure Shariah compliance, banks hire Shariah scholars to review
And approve each product and practise as “halal”.
•Islamic Finance is the fairest banking solution and socially-oriented
•It cannot charge interest and calls for alms giving
•Calls for avoidance of excessive risk
•Not associated with gambling, alcohol, pork, etc.
Opportunities
• Global market interest in Sukuk
• Potential for social and ethically responsible financing
• Establishment of cross-border operations
• MIFC ( Tax and other incentives )
• Global linkages and recycling capital
• Take advantage of increasingly liberalised regulatory environment
• Cross-border offerings, dual listings, regional and global funds
• Exchange of Shariah and technical expertise
• Adoption of international standards on governance, disclosure,
accounting and supervision
• Alignment of national regulatory standards
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Challenges to development ?
• No common approach on prudential regulatory framework
• More liquid Islamic Markets
• Lacks global scale
• Need to work on product Innovation and differentiation
• Only eight countries are using AAIOFI’s accounting standards as
mandatory
• Lack of legal framework
• Shortage of qualified Shariah and Islamic Finance Experts
• Is there a truly Islamic Company, branded and marketed as such ?
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Marketing Approach
• A marketing approach must involve consumer education, as Islamic
Financial products are often difficult to explain.
• Islamic products can often prove to be more profitable than
conventional.
• The religious brand of any product typically rests in the reputation of the
religious scholars who have approved it, and not in the reputation of the
institution that has produced it
• To create the necessary Islamic Branding, whatever their origins, the
banks have to engage renowned Islamic scholars
• Cross-border connections
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Conclusion
For the Islamic Finance to grow, move forward and capitalize on the
enormous growth potentials, there should be :
•Greater cooperation among the industry players
•Better coordination to address the issue of Shariah harmonization
•Be proactive in analysing client demand, designing products to market
needs, using a mix of marketing tools and media to inform the customer
base and pushing to sell
•More intense competition, clearer message, with nuanced products
having distinguished USP.
•Demand (pull) will ask for better supply (push)
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Thank You.
Asian Finance Bank (716122-P)
Kuala Lumpur
2nd Floor, Podium Block, Kenanga International
Jalan Sultan Ismail 50250 Kuala Lumpur, Malaysia
Tel: (603) 2079 1000
Fax (603) 2079 1100
Email: [email protected]
Johor
Lot 2, The Oasis, Jalan Jeti,
Johore Port, 81700 Pasir Gudang, Johor.
Tel: (607) 2552 440
Fax (607) 2252 441
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www.asianfinancebank.com