Tougher regulations, technological advances, demographic shifts, digital and work style revolutions are putting greater emphasis on establishing a larger pool of competent Islamic Finance professionals to meet the increasing market share of the Islamic Financial Services Industry (IFSI). According to the Malaysia International Islamic Financial Centre (MIFC), Islamic Finance in Malaysia contributes 11% of total employment to the IFSI worldwide, with an estimation of one (1) million professionals required by 2020.

Despite much effort spent  on  Islamic Finance  education  and training,  there  remains numerous challenges to be addressed, particularly in integrating education and training with the requirements of the IFSI, as well as streamlining the standards between academic and training programmes. As it stands, the Islamic finance sector remains a demand-driven market with scarce supply. This is more pronounced in Asia than other countries due to the extent of its growth in the region. More so as the economic integration of the ten-member bloc of the Association of Southeast Asian Nations (ASEAN) into the Asean Economic Community (AEC) is seen as a pivotal moment that will create large opportunities for Islamic finance in the entire region, and this should compel the industry to act. Ifthese issues remain unresolved, the growth in Islamic Finance could be short-lived.

In Malaysia, the growing momentum of IFSI suggests that a significant portion of the remaining workforce of 56,000 to be employed by the Financial Services Industry (FSI) by 2020 will comprise Islamic Finance professionals, as reported by Bank Negara’s Financial Sector Blueprint.

Studies conducted by The Capital Market Regulators Forum revealed that 82% of the surveyed countries are experiencing shortage of talent in the IFSI areas, such as Shariah and Takaful. The studies also revealed that another 60% of Islamic finance professionals require further training and skills development. The scarcity of talent poses a significant impact on the industry as the contribution to the growth of Islamic financial assets will be greatly affected.

Research suggests that the lack of cooperation between the academia and industry to develop a wholesome  curriculum  in  Islamic  Finance  has  resulted  in  a  mismatch  between  the  graduates produced and the skills required by the industry. Graduates go through a system which is more theoretical than practical and are therefore, not suitably equipped for the industry. Bank NegaraMalaysia (BNM) in its comments on ‘Talent development in Islamic finance over the next decade’ highlighted that a more comprehensive approach and close collaboration between the industry and the academia are essential to meet the highest standards of employees required in the workforce. This would ensure a steady stream of competent and versatile talent to support greater innovation and dynamism of the Islamic finance industry. Additionally, new systems and technologies will provide the bedrock for the Islamic Finance Services Industry (IFSI) to become more competitive and efficient to deliver value, and ultimately to restore confidence and trust. The Islamic finance services industry is a specialised field and acquiring the right competencies and skills sets is critical to sustain andfurther its growth.

The matter is made more complicated by the fragmentation of Islamic financial regulations and the extreme variation with which Shariah principles are interpreted and implemented within and amongst jurisdictions.  This  considerable  variation  creates obstacles  to  effective  training  and  knowledge transfer. Diversity of regulations and operations across borders require careful studies and review before a common understanding can be achieved for best practices. This is particularly so in the Islamic financial industry where understanding of Shariah and practices could vary from different practitioners and countries.

The aforementioned challenges point to two conclusions. 

  • one, although some of the challenges are specific and local in nature, they are to a certain degree universally intertwined. For instance, education and training could be received by Islamic Finance professionals in Malaysia who also practice across jurisdictions with different interpretation of Shariah principles. Hence, a global approach presents a more practical solution in addressing the issues.
  • second, there is a need for an international accreditation body for the IFSI. Although many countries have their own respective quality assurance agencies in higher education (the MQA, in the case of Malaysia), the absence of a subject-specific and professional accreditation body for finance (or more specifically, Islamic Finance) does not allow quality assurance and standardisation of Islamic Finance programmes across jurisdictions to be made possible.

The importance of globally benchmarked standards for Islamic Finance and Training cannot be overemphasised. It outlines the required activities and tasks that are necessary to  successfully identify, define, select, apply, and improve benchmarking for the training programmes offered to IF practitioners.  In  simpler  terms,  it  is  a  published document  that  establishes  specifications  and procedures designed to ensure the reliability of the training programmes, products, methods, and services used by professionals and institutions that seek to improve their practices. The absence of these protocols that can be universally understood and adopted decreases the compatibility and interoperability of IF services, which is the very core that fuels the development of the industry.  

Dr.  Amat  Taap  Manshor  is  CEO  of Finance Accreditation Agency (FAA), a  quality  assurance  body dedicated  to  promoting  high  standards  in  the  Financial  Services  Industry  through  the  application  of internationally  benchmarked  learning  standards   and the   accreditation   of  learning  programmes targeted to elevate competencies among finance professionals.

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