RIYADH, 23 January — Islamic banking provides a huge potential for investment in the GCC states’ infrastructure development, which needs $100 billion over the next ten years.
This was the assessment of Razi Fakih, head of Islamic Banking Services at the Saudi British Bank. He said the Sept. 11 events had brought the Islamic banking sector under international scrutiny as a result of which there was a growing interest in the area of Islamic finance.
Fakih was making a presentation on "Islamic and conventional financial services: strategic alliances" on the second and concluding day of the Third GCC Banking and Financial Institutions Conference here yesterday.
Dr. Ibrahim Al-Ghofaily of Al-Rajhi Banking and Investment Corporation was the chairman of the session.
Pointing out that Islamic banking provides a safe and lucrative source for investors, Fakih referred to the infrastructure projects worth $100 billion that will be coming up in the Gulf region over the next ten years. "They need these investments for the growing population of the GCC, a majority of whom are young and will be entering the employment market in the coming decade."
He said the Saudi British Bank will be working with HSBC in developing these infrastructure-related Islamic products for the customers.
The SABB executive said another area of investment in terms of Islamic banking products related to research and development. He cited statistics to show that over 150 Islamic institutions around the world had invested less than five percent of their funds in research and development. The presence of Muslim communities in Western countries provided another channel for Islamic solution for bankers who could target these communities by launching products that are Shariah-compatible.
He added that the trend toward Islamic personal financing and other Islamic investment portfolios augurs well for the future as there is a growing interest in Islam-related activities in the aftermath of Sept. 11 events.
In his presentation on "Internet banking vs traditional banking: Who wins the game in the Gulf countries?" Khalid Al-Alakami, manager, Remote Banking, AlBank AlSaudi AlFransi, spoke on the new trend in e-banking as opposed to traditional banking. Describing the Kingdom as a country with the largest potential in terms of e-banking, he said it will be the No. 1 market in the region with an estimated 2.7 million users next year and 3.3 million users by 2004.
On the subject of "Frontline Communication", Martin Horan, consultant, Frontline Communications, Dublin (Ireland), said the presence of smart staff in the banking industry calls for developing a particular mindset.
Merlin Stone, executive consultant, IBM Business Innovation Services, London, wanted a financial institution to be customer-centric. To this end, he stressed the need for developing skills in customer relations to improve the net value of the organization from the customer’s point of view.
Mazen Al Ghunaim of Arab National Bank spoke on call centers with data base linked to mobile, web, fax and phone communications.
