AIFA, which was established by a RM3.17 million grant from the Malaysian government, aims to be the main accreditation body for Islamic finance programs worldwide and will develop initiatives to ensure the quality, industry relevance and global recognition of Islamic finance education and its related areas.
The association, according to Professor Mohd Azmi Omar, dean of IIUM, which is leading the initiative, will collaborate with international accreditation bodies such as the US-based Association to Advance Collegiate Schools of Business to develop the standards and curriculum for Malaysia's higher education institutions, and is also cooperating with US publisher, John Wiley, to publish five standard textbooks related to Islamic finance and banking.
With the rapid growth of Islamic finance globally, a vast number of Islamic finance education and training courses and institutes have emerged. While some are associated with recognized institutions of higher learning, others are operating virtually with no oversight and quality control. This is because there is no internationally recognized accreditation or standard for Islamic finance education and training.
Malaysia hopes that AIFA could fill this role and Islamic finance educators believe that the country is fast emerging as a global cluster for Islamic finance and banking education spearheaded by the International Islamic University of Malaysia (IIUM), the International Centre for Education in Islamic Finance (INCEIF), which was last year accorded university status, and the numerous other training, educational and research institutes.
"This year, we have already received 2,000 students locally and globally to undergo Islamic banking and finance courses in higher education institutions in the country and we are confident of getting 6,000 students next year. At the core of the cluster is a new comprehensive curriculum for Islamic banking and finance education while the existing programs will be expanded," explained Omar.
The target is to have 55,000 local students and 28,000 foreign students in Islamic finance and business education by 2020. The AIFA initiative should also be seen in the context of Prime Minister Mohd Najib Abdul Razak's Economic Transformation Program for Malaysia (ETF), which aims to develop Malaysia into one of the world's leading Islamic finance education hubs. This sector is expected to contribute RM1.2 billion to gross national income and to create 4,300 related jobs by 2020.
Similarly, at the launch of the Capital Market Master Plan 2 in Kuala Lumpur in early April 2011, Premier Mohd Najib warned that the government can deliver the policies and the frameworks, "but all of our efforts to attract investors will come to nothing unless we can also deliver the highly skilled, expert workforces they need to flourish. In today's knowledge-intense, innovation-led economy we are going to need world-beating, top-flight talent - and as much of it as we can get!"
Other provisions of the CMP2 include the establishment of the Talent Corporation Malaysia Berhad to lead the government's new returning experts program to help meet the human capital requirements of the economic and government transformation programs, and the Malaysian National Development Plan. These include several fiscal incentives. In addition the government has introduced the residence pass and the special employment pass to help attract and retain top foreign talent specifically in the Islamic finance industry.
Zeti Akhtar Aziz, governor of Bank Negara Malaysia, in her speech to the Asian Institute of Finance (AIF) International Symposium 2011 on the theme “Talent Management, the New Paradigm” which was held in Kuala Lumpur in April 2011, similarly warned that the World Economic Forum has projected that 'staggering' talent gaps will arise in large parts of the world by 2020, and this will have a bearing on national competitiveness while organizations compete for talent on an unprecedented scale.
Talent shortages, she added, continue to be acute in high-growth areas such as wealth management, Islamic finance, and investment advisory services. At the same time, the role of the financial services sector in the recent global economic meltdown has also raised questions on the issue of the quality of the leadership and workforce and for the need to place greater focus on developing ethical and responsible leaders who will be able to lead a sustainable industry over the medium and longer term.
"The economic costs of a failure to arrest talent shortages are strategically significant and include low productivity, the slow pace of innovation and lost opportunities. Building a strong talent pipeline has therefore become an economic imperative as human capital rivals financial capital as the critical economic engine of the future," explained Zeti.
AIF was initiated by Bank Negara Malaysia and established jointly with the Securities Commission in 2009. Working with its affiliated institutes from the industry, the Institute of Banks Malaysia (IBBM), the Islamic Banking and Finance Institute Malaysia (IBFIM), the Malaysia Insurance Institute (MII) and the Securities Industry Development Corporation (SIDC), AIF has an important role in driving and supporting the development of talent in the financial sector.
AIF has already developed a learning program assessment and accreditation framework (LPAAF) which provides a structured and comprehensive approach that defines quality assurance standards for training programs for the industry and that is benchmarked against international standards.
Officials and independent analysts have long criticized the under investment in learning by financial institutions, which is largely due to the focus on keeping short term costs low, which in turn has resulted in drawing talent from the existing pool thus pushing up the cost of human capital.
The contribution of the financial industry to the Malaysia's GDP has increased from 9.2 percent in 2000 to 11.7 percent in 2009 and this figure is expected to grow further in time. Likewise, the employment growth in the financial sector, according to Bank Negara, will continue to accelerate, with increasing demands for specialized skills and enhanced expertise in finance.
