International Conference onIslamic Microfinance in Mauritius<br />Organized By :<br />CENTER OF ISLAMIC BANKING & ECNOMICS...
010000100<br />Islamic Financial Operations from an IT Perspective<br />Stephanie Hayek<br />Corporate Communications Mana...
Agenda<br /><ul><li>Islamic Finance Main Features
New Trends in Islamic Finance
An IT Solution for Islamic Banking
Path Solutions in Brief</li></li></ul><li>Islamic Finance Main Features<br /><ul><li>High growth:
Islamic financial services are nearing $1 trillion in managed assets
With about 700 IFIs spread throughout every region of the world
Innovative instruments & evolving industry
Different Sharia interpretations
Different products & services</li></li></ul><li>Islamic Finance Main Features<br />Islamic banking services are offered th...
Islamic Finance Main Features<br />	Islamic banking differs from conventional banking in terms of:<br />	Products, such as...
Expected rate of return vs. interest deposits
Investments vs. deposits
Partnerships vs. financing</li></li></ul><li>Islamic Finance Main Features<br />Processes, such as: <br /><ul><li>Workflow
Trading
Risk-profit participation</li></ul>Fiscal implication, such as:<br /><ul><li>Deferred income vs. accrual
Profit payable vs. cost of fund </li></ul>Documentation, such as:<br /><ul><li>Contracts, correspondence & confirmations</...
Optimal use of customer data (KYC & relevant products matching)
Efficiently handling transactions volume
Comprehensive risk & liquidity management
Enabling product creativity and product mix
OLTP, STP, 24/7
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Islamic financial operations from an it perspective by path solution

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International Conference on Islamic Banking & Finance in Mauritius

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  • - The industry boasts an estimated $1 trillion in assets, and Islamic banking continues to grow at a rate of about 20 percent a year- According to IFSB’s April 2010 report, the industry’s assets have been growing by more than 20% annually since 2000. It forecasts Islamic assets to reach $1.6 trillion, with revenues of $120 billion by 2012
  • OLTP: Online transaction processing
  • &lt;Read At the End&gt;The IT solution to be adopted by Islamic Banks should not be a modified conventional banking solution as it will prove its limitation over time. More important the IT solution for processing of transactions and deals encountered should be Halal and not just re-naming of usury transactions into Islamic InstrumentsSince the Islamic Bank is a partner with his clients in financed projects and deals under various Islamic instruments, the profit is not calculated based on pre-set interest rate but rather on the actual profit of the investment. The need for computer systems to manage profit calculations and distribute the profits among the shareholders and depositors is a key success to Islamic banks. Especially as the profit is dynamic and keeps changing with the changes in the market and investment atmosphere. Therefore and in order to reinforce financial soundness, only highly flexible Sharia-compliant banking systems that offer a modular and modern architecture should be considered.The bad news is that even the true believer in Islamic banking is skeptical about whether the processes followed are entirely Sharia compliant. The hope for the Islamic products and Islamic banks offering them, therefore, lies in the introduction of highly flexible banking systems that offer a modular and modern architecture that the multinational and conventional local banks are fast moving to arm themselves within the battle for customers and their business.
  • Technology have completely changed the nature of the financial services industryThere has been an unprecedented development in the mathematical and quantitative treatment of financial variables with critical implications for banksreducing the transaction costs while increasing the speed. Efficient e-business and electronic delivery systems help to reduce costs dramatically and enhance the quality of servicesThe spectrum and quality of services offered vary across financial institutions, depending on their utilization of state-of-the-art technology
  • Islamic financial operations from an it perspective by path solution

    1. 1. International Conference onIslamic Microfinance in Mauritius<br />Organized By :<br />CENTER OF ISLAMIC BANKING & ECNOMICS<br />
    2. 2. 010000100<br />Islamic Financial Operations from an IT Perspective<br />Stephanie Hayek<br />Corporate Communications Manager, Path Solutions<br />
    3. 3. Agenda<br /><ul><li>Islamic Finance Main Features
    4. 4. New Trends in Islamic Finance
    5. 5. An IT Solution for Islamic Banking
    6. 6. Path Solutions in Brief</li></li></ul><li>Islamic Finance Main Features<br /><ul><li>High growth:
    7. 7. Islamic financial services are nearing $1 trillion in managed assets
    8. 8. With about 700 IFIs spread throughout every region of the world
    9. 9. Innovative instruments & evolving industry
    10. 10. Different Sharia interpretations
    11. 11. Different products & services</li></li></ul><li>Islamic Finance Main Features<br />Islamic banking services are offered through three types of governance structures:<br />Full fledged Islamic banks<br />Islamic banking windows of conventional banks<br />Independent Islamic banking subsidiaries<br />What competitive edge do they provide?<br />Provide Sharia-compliant products<br />Provide innovative products and superior services <br />Streamline operations in a single platform across the institution<br />
    12. 12. Islamic Finance Main Features<br /> Islamic banking differs from conventional banking in terms of:<br /> Products, such as<br /><ul><li>Equity-based
    13. 13. Expected rate of return vs. interest deposits
    14. 14. Investments vs. deposits
    15. 15. Partnerships vs. financing</li></li></ul><li>Islamic Finance Main Features<br />Processes, such as: <br /><ul><li>Workflow
    16. 16. Trading
    17. 17. Risk-profit participation</li></ul>Fiscal implication, such as:<br /><ul><li>Deferred income vs. accrual
    18. 18. Profit payable vs. cost of fund </li></ul>Documentation, such as:<br /><ul><li>Contracts, correspondence & confirmations</li></li></ul><li>Islamic Finance Main Features<br />Is Sharia compliance the only driver of competiveness?<br />The main drive for IFIs is Sharia compliance<br />BUT<br /> IFIs should not compromise on IT, which drives competitiveness<br /><ul><li>Management of information is the main drive to maintain competitiveness
    19. 19. Optimal use of customer data (KYC & relevant products matching)
    20. 20. Efficiently handling transactions volume
    21. 21. Comprehensive risk & liquidity management
    22. 22. Enabling product creativity and product mix
    23. 23. OLTP, STP, 24/7
    24. 24. Report & query rich</li></li></ul><li>Islamic Finance Main Features<br />Islamic finance is different from conventional banking<br /><ul><li>The business is different
    25. 25. The product is different
    26. 26. The process is different
    27. 27. The mechanism is different
    28. 28. The financial and fiscal implications are different</li></ul>The IT solution should be different<br />
    29. 29. Islamic Finance Main Features<br />IT is the tool to increase market share<br />IT is now permeating every conceivable aspect of the bank’s business and is often the tool of choice for improving:<br /><ul><li> Product innovation
    30. 30. Customer satisfaction
    31. 31. Hence, increasing market share</li></li></ul><li>New Trends in Islamic Finance <br /><ul><li> The Islamic banking system (IBS) market is predicted to be a $1.2 billion market in 2011
    32. 32. And to grow at a 10.9% compound annual growth rate (CAGR) between 2009 and 2014
    33. 33. The IBS market is expected to reach $1.6 billion in 2014
    34. 34. The number of conventional banks that will open Islamic windows is increasing, especially in Western countries, as a consequence of new legislation taking place
    35. 35. Although this change will concern mainly the Islamic bond (Sukuk) market
    36. 36. An increasing standardization process for compliance with the Sharia is taking place
    37. 37. The replacement process of in-house software with commercial off-the-shelf (COTS) systems is accelerating, especially in mature markets such as the Middle Eastern countries. </li></li></ul><li>An IT Solution for Islamic Banking<br />Knowing that partnership is the pivot of Islamic finance:<br /> In conventional, a loan is a loan and partnership is very risky. <br /> Where Islamic finance understands the risk and the related system accounts for it.<br />An enterprise component based solution should:<br /><ul><li>Be built on the basis of Sharia rules & regulations
    38. 38. Cover the sources of funds, such as RIAs and URIAs
    39. 39. Cover the uses of funds, such as Murabaha, Ijara, Musharaka, etc.
    40. 40. Manage the linkage between the sources and the uses of funds
    41. 41. Produce industry-related financial implication, legal documentation & confirmations
    42. 42. Support Sharia Audit procedures
    43. 43. Enable Zakat, tax and VAT computations</li></li></ul><li>
    44. 44. Who We Are<br />Path Solutions is a Kuwaiti shareholding company with head office in Kuwait<br />Founded in November 1992 <br />Beirut development center October 2000<br />Manama support office October 2003<br />London support office February 2007<br />Kuala Lumpur support office September 2007<br />Karachi support office April 2009<br />Riyadh support office August 2009<br />Jakarta support office November 2009<br />Khartoum support office December 2009<br />Dubai sales office May 2010<br />Singapore support office June 2010<br />Cairo office June 2010<br />
    45. 45. Vision<br /> To be the most trusted and innovative provider of information technology solutions and services for the global financial industry & in specific the Islamic financial industry<br />
    46. 46. iMAL<br />Complete Integrated Solution<br />
    47. 47. Solution Architecture<br />Scalable system<br />Platform independent<br />Open systems architecture<br />Relational database<br />True 24x7 operation<br />On-line transaction processing<br />Store & Forward<br />Object oriented development<br />Client server environment<br />Thin client architecture<br />Web enabled solution<br />Client centric - 360 view/processing<br />Built-in electronic workflow<br />Multi-lingual<br />Multi companies <br />Multi branches<br />Multi profit / cost centers<br />Multi currencies<br />Financial positions and reporting<br />Modular / Fully integrated system <br />Single version<br />
    48. 48. Why Path Solutions? <br />Industry expertise - No learning curve <br />Industry evolvement commitment<br />Quick time to market products<br />Fully integrated modularized solution<br />User-autonomy solution capability<br />Path's commitment to continuous R&D<br />Customization / Interfacing <br />Swift implementation - Model bank<br />Complete system & project documentation – UMG, WP, others<br />Training / Transfer of knowledge<br />
    49. 49. iMALCompliance<br />AAOIFI-certified since November 2008: The AAOIFI certification covers all iMAL modules, business processes, contracts, accounting treatments, implications and behavior<br />IFSB compliant<br />IAS compliant<br />Basel II compliant<br />
    50. 50. Selected Client List<br />National Investment Company<br />
    51. 51. Awards & Accolades <br /><ul><li>In December 2010, Path Solutions was chosen as the ‘Best Islamic Software Provider of the Year’ by Lebanon-based Capital Issues of Data & Investment Consult group.
    52. 52. Path Solutions has been adjudged for the third consecutive year “Best Islamic Technology Provider” in the 2010 Islamic Finance News Poll conducted by REDmoney.
    53. 53. On August 3rd, 2010, Path Solutions picked up KLIFF Award for “Most Outstanding IT Company for Islamic Finance”.
    54. 54. iMAL is the 1st Banking Software to be certified by AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions).
    55. 55. May 2010: “Sheikh Mohammed Bin Rashid Al Maktoum Award” for Best IT Solutions Provider to the Islamic Finance Industry.
    56. 56. March 2010: For the third consecutive year, Path Solutions ranked Nb. 1 Best Selling Islamic Software Provider and World’s 5th Universal Banking Solutions Provider in IBS Sales League Table for 2009.
    57. 57. January 2010: Path Solutions adjudged “Best Islamic Technology Provider” in the 2009 IFN Awards Poll conducted by REDmoney.
    58. 58. March 2009: For the second consecutive year, Path Solutions ranked Number One in the Islamic Banking Segment and amongst World’s Top 5th Banking Solutions’ Providers in the recent IBS Sales League Table 2008 Report.
    59. 59. January 2009: “Best Technology Provider for 2008” in the Fourth Islamic Finance News Poll conducted by REDmoney
    60. 60. December 2008: “Best IT Solutions Development Firm” for the Year 2008 by Lebanon-based Capital Issues of Data & Investment Consult group.
    61. 61. November 2008: “Most Outstanding IT Company Award” at the KLIFF Islamic Finance Awards 2008.
    62. 62. October 2008: “Best Banking Software Firm” at the Capital Issues Financial Award for this category.
    63. 63. April 2008: “Sheikh Mohammed Bin Rashid Al Maktoum Award” for Path Solutions’ Global Continuing Contribution to Islamic Finance in IT.
    64. 64. March 2008: iMAL ranked “Number One Islamic Banking Solution” and the 4th Best Universal Banking Solution in IBS 2007 Annual Sales League Table.
    65. 65. December 2007: iMAL recognized as the “Best Islamic Finance Technology” for 2007 at the Islamic Business & Finance Awards Ceremony.
    66. 66. 2006: “Best Islamic Finance Technology Firm” by Islamic Finance News, in the Best Islamic Banks Poll 2006 organized by REDmoney.
    67. 67. 2006: Award Winner of “Sheikh Mohammed Bin Rashid Al Maktoum Islamic Finance Awards” for Global Continuing Contribution to Islamic Finance in IT.
    68. 68. 2005: Best Selling True Islamic Banking Software Provider by the International Banking Systems.</li></li></ul><li>THANK YOU<br />www.path-solutions.com<br />
    69. 69. CENTER OF ISLAMIC BANKING & ECNOMICS<br />Head Office: 192- Ahmad Block, New Garden Town , Lahore, Pakistan Ph: +92-42-35913096-8, 35858990, 38407850 Fax: +92 -42-35913056E-mail : info@alhudacibe.com<br />Web: www.alhudacibe.com<br />

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