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Does the 'Islamic' in Banking and Finance work for or against?


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Rebecca Simmonds from Islamic Finance News interviews me on my take concerning rebrands

Published in: Economy & Finance
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Does the 'Islamic' in Banking and Finance work for or against?

  1. 1. IFN REPORTS A new identity for Islamic Bank of Britain Islamic Bank of Britain (IBB) has confi rmed that subject to formal shareholder approval, the institution will become Al Rayan Bank, with the change to be completed in December 2014. REBECCA SIMMONDS considers the reception of the bank’s impending rebrand. While the bank will continue to operate as a UK-regulated bank; monitored by an independent Shariah Supervisory Committ ee and a dedicated Shariah compliance offi cer, the name change will serve to bring the bank’s brand closer in line with its parent bank, Qatar-based Masraf Al Rayan, which successfully acquired IBB at the beginning of the year. The name change for IBB was fi rst mooted in July, with Sultan Choudhury, the bank’s CEO, stating in an interview that: “[The bank has] to look at branding — sometimes the positioning as an Islamic bank can work against us.” IBB’s rebranding activity will involve the introduction of a new Al Rayan Bank logo and brand identity. Commenting on the rebrand, Choudhury said: “IBB has pioneered British retail Islamic banking over the last 10 years, achieving global recognition for its outstanding successes. The change to Al Rayan Bank represents the latest chapter in the bank’s history, in which it will expand its retail and commercial product off ering to a wider audience, with the backing of a strong and successful parent. Importantly, the bank will preserve the spirit of IBB, remaining a British Islamic bank dedicated to strong, faith-based ethics and great customer service.” Speaking to IFN, Dr Jonathan AJ Wilson, branding consultant and program leader of the postgraduate Marketing degrees at the University of Greenwich, off ered his perspective on the name change for IBB: “Islamic Bank of Britain has admitt ed in the past to using ‘IBB’ in some of their corporate branding, labelling, and promotional material — in an att empt to tone down the negative connotations associated with overtly linking themselves with religion. “It would be a mistake to assume that this negativity is coming from just non- Muslim quarters: Muslims’ perceptions of the word ‘Islamic’ mean that it is held to be synonymous with purity and piety — which is a tough act to follow for any commercial organization. Furthermore, with such a climate of negative perceptions, many Muslims would rather not increase the potential for further Islamophobia by being associated with a bank that carries strong Islamic branding — whether they are business people or high-street customers. Arabic names remain strongly associated with Islam: so on home soil, if it’s about reducing cultural animosity or Islamophobia, the name change should’ve been something more aligned with the cultural nuances of the UK “The potential name change to Al Rayan may help when it comes to plugging into an international corporate identity and reputation. However, Arabic names remain strongly associated with Islam: so on home soil, if it’s about reducing cultural animosity or Islamophobia, the name change should’ve been something more aligned with the cultural nuances of the UK.” Having said that Gulf airline companies like Emirates, Etihad, and Qatar have been masterful in creating powerful and inclusive brands — but this has been a costly exercise and required years of high-profi le sports sponsorship deals, which embed their identity within universal and emotive messages that sport off er.” Chiming in, Lawrie Chandler, the director of UK-based wealth boutique Edale Group, said: “IBB has built a strong foothold in the UK and positively they have been gett ing good traction in the past few years. They’ve widened from banking to corporate lending, investment products, tax effi cient savings accounts and pensions. Under the Al Rayan brand they will also have the parent company association that should help with Middle East clients looking for an international bank. While IBB was traditionally a UK-focused institution I anticipate it will be doing more international business helped by the Al Rayan brand and franchise.” Masraf Al Rayan’s acquisition of IBB has strengthened the bank’s fi nancial position bringing capital investment of GBP100 million (US$161.22 million). The bank’s advisory and retail operations have benefi ted, with its Shariah Supervisory Committ ee consulting on the UK government’s proposals for Shariah compliant student loans and with Carey Pensions UK on the development of the Islamic Pension Trust, a fully Shariah compliant auto-enrolment pension scheme providing a qualifying UK workplace pension scheme for Muslims. At the start of this month, the bank launched its Home Purchase Plan (HPP) — the fi rst UK Shariah compliant home purchase product to be backed by the government’s HPP guarantee scheme. IBB earlier this year announced a new direction, building on Masraf Al Rayan’s investment and shifting its focus to corporate and real estate fi nance. In September Keith Leach (previously affi liated with Arab Banking Corporation, Ahli United Bank and Lloyds) was named chief commercial offi cer, a newly-created post, taking the lead on the bank’s commercial and GCC operations. Although the new business will be based in London, the bank’s retail and operational headquarters will remain in Birmingham instead of the nation’s capital — a decision that could prove questionable for a regional bank aiming to make an impact on a national level. © 10 29th October 2014