MANAMA, 12 December 2005 — The 12th Annual World Islamic Banking Conference (WIBC) opened yesterday with calls for greater consolidation in the sector in order to compete with larger international financial services providers.
Under the official patronage of Bahrain Prime Minister Sheikh Khalifa ibn Salman Al-Khalifa, the conference began with discussion about the need to establish stronger regulatory measures in the Islamic banking sector.
Bahrain Monetary Agency Gov. Rasheed Mohammed Al-Maraj welcomed more than 700 delegates from more than 30 countries at the grand opening ceremony at the Gulf International Convention Center in Bahrain.
“The theme of this year’s conference — Unlocking Market Opportunities: Consolidation, Innovation & Growth — has been well chosen,” said Al-Maraj. “Islamic banking is receiving increasing recognition and attention from the global financial industry. It is experiencing strong growth, and demonstrating credible innovation in developing new products and markets.”
“At the same time, the challenge of consolidation — how to strengthen the players in the market and thus maintain this strong momentum — remains as pertinent as ever,” said Al-Maraj. “And finally, of course, no one would claim that the industry has yet realized its full potential, given the opportunities for Islamic finance that exist around the world”.
He stressed in his presentation that Islamic banks need to consolidate and increase their financial strength if they are to meet the challenges posed by better-resourced competitors.
Panelists included Dr. David Mullins, CEO of US-based VEGA Institutional Advisors and former vice chairman of the board of directors of the Federal Reserve System, who spoke about banking regulations. He said firm regulatory structures must be in place in order to maintain the stability and integrity of the financial system; to protect customers from fraud; and to improve the efficiency of the financial system.
Deputy Managing Director of the Monetary Authority of Singapore Teo Swee Lian and Bilal San, a member of the auditing committee for Turkey’s Central Bank, both shared the latest developments in Islamic banking and finance in their respective countries.
“The growing acceptance among Muslims of Halal savings and investment products over the past decade has been impressive,” said panelist Samuel L. Hayes, a Harvard Business School professor who specializes in investment banking. “Consequently, a number of conventional Western financial institutions have eagerly moved into this market as the array of investment vehicles has broadened. Less attention has been paid to the financing needs of Islamic business firms.”
For the first time, WIBC featured concurrent breakout summits — the retail banking summit and the corporate & investment banking summit. The retail banking summit focused on exploring the latest trends and new product opportunities in the consumer-banking environment and discussed why Islamic banks will need to make their retail offering competitive to both Islamic and conventional banks and how service quality will be a key factor in guaranteeing the capture of new retail business.