Our thoughts on the 3rd Annual Asia Islamic Banking Conference
Earlier this week, we attended the 3rd Annual Asia Islamic Banking Conference in Kuala Lumpur.
Ogilvy Noor’s president John Goodman talked to the delegates about the challenges currently facing the Islamic banking and finance industry. “We are still at the initial stages of the Muslim consumer’s journey towards adopting the products and services of this burgeoning sector,” he said reflecting on what he hoped delegates would take back from his presentation. “We have to unravel the doubt, scepticism and confusion that they face when it comes to adoption.” But Ogilvy Noor is absolutely of the belief that the consumer does want this industry to succeed. They just need to be convinced that it lives up to its halal promises. “Other industries have successfully overcome scepticism,” he says, “and Islamic banking and finance can do it too.”
Following his presentation, one of the interesting questions that arose was, whose responsibility is the education of the consumer, and the overcoming of doubt about the structure and benefits of Islamic banking and finance?
On the second day, Hendri Satrio, Ogilvy Noor’s lead in Indonesia raised the challenges of “Don’t just talk ‘Islamic’, Walk ‘Islamic’” when it comes to communicating with Muslim banking consumers. “The challenge,” says Hendri “is to avoid just slapping on the label ‘Islamic’. What is much harder, but what will ultimately win over the Muslim consumer, is for institutions to make clear the values which they uphold, and how those values are practiced. ”
“Turkey is an interesting example that was discussed.” Tweeting live from the conference, he said: “In Turkey, Islamic Bank named as Participation Bank. Learned from it, Turkey delegation proposed not to use the word “Islamic” in Banking.” The subsequent discussion, says Hendri, was “hot.” And no wonder, with delegates from all the world’s major Islamic banks from around the globe, for an industry set to grow from today’s estimate of $1 trillion to $5 trillion by 2016, it’s a nascent market that is still building infrastructure as well as consumer relationships.
This global approach to Islamic banking and finance was best reflected in a comment by one of the other panelists during the conference, who described the industry as “a new Silk Road” bringing together East and West.
At Ogilvy Noor, we feel this underlines what we’ve been saying about Muslim consumers: that whilst respecting local differences, there are values that bring together Muslim consumers wherever they are, and by understanding and engaging with these values, brands are in a stronger position to build relationships with them and serve their needs.
Here’s a selection of our 140 character tweets from the conference in addition to our thoughts above.
“Fascinating dialogue about who has the responsibility of explaining Islamic finance clearly to consumers.”
“In every major Islamic economy (except UAE) Islamic Banking is growing faster than conventional banking.”
“Malaysia sharia advisor said, “there are always continuous Gap & Debate between academic & practitioners, but all of it, is 4 + goal.”
“Islamic banking sector in Turkey very small – less than 5% – but primarily serving the ‘unbanked’ and SME’s.”
“Representatives here from 14 different countries including Japan, Afghanistan and Germany – but oddly nobody from Indonesia.”
“The Panelist has informed Oman and Japan started to develop Islamic Banking while Hong Kong more focus in Islamic Investment (Sukuk)”