DEARTH!!!

Voices of the Unheard – Salvaging the Next Generation of Islamic Financers

by Mohammed Khnifer

 

Voices of the Unheard


Haseeb
Muhammad was supposedly  *destined* to a so called  *Islamic * banker.    Instead, he is now working for Hyatt Regency hotel !

This is the sad untold story of how the Islamic Finance industry is about to lose its second generation of bankers who we never tried to connect with. These are the desperate voices of the unheard of.

“I was forced to earn my livelihood in a complete contrary industry to my relevant degree”, said the holder of MSc, Islamic Banking & Finance.

“Is this the treatment we expect to  have for those who have chosen ethical Banking as their career “, he added while feeling some regret of taking this  costly degree. “Isn’t that just a waste of talent”, he wonders.

Unfortunately, many of these graduates, who are not lucky enough to hold a nationality of a country that does * really * cater the development of its Islamic Finance human capital, might follow Haseeb’s path if the stakeholders of Islamic Finance (IF) do not interfere and save them from this * grim* reality.

High Caliber

Islamic finance courses have become *cash cows * to other institutions who jumped to the bandwagon. But we are not talking here about online degrees which might be questionable in terms of quality of the training and education. Instead, we are talking about the * cream of the crop *.  Those savvy graduates who have graduated from the Top Business School in Europe that offer a blend of conventional and Islamic type of financing degree.

For instance, Henley Business School is in the forefront of IF education in the UK – with the first collaborative degree, the first programme to educate students alongside professionals in another country, and a roster of internationally acknowledged specialists and practitioners in the field.  ICMA Financial Studies Center at Henley boast of its MSc in Investment Banking & Islamic Finance degree. Unlike the other degrees, this one has as  academic portfolio constitutes of almost 65% mainstream finance & 35% exposure to specialized area of finance, resulting in unique technical skill that proves useful in structuring corporate & debt products.

The MSc is taught jointly with INCEIF (International Centre for Education in Islamic Finance). At the end of third term, the students become Chartered Islamic Finance Professional (CIFP).

Indeed, the second generation of Islamic bankers is in the making and for a handful of them, the aggregated global professional qualifications they have are hardly seen in the practitioners of the Islamic Banking of today.

The first generation of Islamic bankers is the group  who crossed the trading floor from conventional to Islamic banking to take up employment and were provided with either bespoke training or learned their Shariah compliance on the job, as David Williams, the Chief-in-Editor, of Islamic Banking & Finance magazine highlights in his editorial about the upcoming wave of the second generation of Islamic Bankers.

According to a research paper by INCEIF, in the next decade, the Islamic finance industry need to produce 50,000 graduates. However, a cursory review of the possible number of graduates produced by various institutions of higher learning does not exceed 1,000 per year.

Brave New World

In a * perfect world *, these IF graduates should have higher starting salary due to the technicality of their field. This is what the industry call * premium for talented staff* . “Even though there is a propaganda of shortage of islamic bankers, none can be seen in the recruitment process”, said Aatef Baig who has recently graduated from ICMA.

“Our students are finding that searching for jobs in IF has never been harder at a time when demand for IF services has never been stronger”, wonders John Board,Dean of Henley Business School.

Grim Reality

“As a Business School , we train people for active professional involvement and rapid career progression.  Thus, the apparent paucity of employment prospects is puzzling – times may be tough for banks, but their apparent unwillingness to develop this sector and to make the HR investment necessary to ensure its long term viability will surely damage the IF industry in the UK”, he added. “While HR policies are the preserve of the firms implementing them, the apparent lack of opportunity for well qualified specialist masters students is a matter for some concern – especially in the UK which has often claimed its wish to be a significant participant in the global market for IF products and services”.

Aatef, who aspire to join an Islamic private equity firm, concur that this  grim reality could possibly “demotivate young students that think of undertaking the islamic finance specialized courses.”

“ The urge of true ethical banking is now fading away”, said Haseeb who now labeled himself as “Depressed & Demoralized Islamic Banking practitioner.”

“What good is my IF education especially  that i am unable to implement it in reality”, he elaborated after moving to the hospitality industry.” “I  have knocked for any opportunity at almost all the Islamic Banks of UAE for past six months but none even bothered to call back , instead jobs are just being distributed to people who are well connected “, he elaborated.

Professor Board thinks that it is likely that the IF industry has turned its back on these graduates. He concurs that this                               * treatment * may demolish the 2nd layer of IF bankers.

The Islamic finance industry is losing slowly its human intellectual capital. Once they graduate, they see many closed doors in front of them. Recruitment agencies do not come near them as they are not considered their main profitable resources. The deep pockets lie in filling the job opening for the senior level.

Where shall these talents go ?

Malaysia is a prime destination as it exports its own IF talents worldwide. However, banks operated in Malaysia are unable to hire nor train these * foreign * Muslim students as they come under an employment law where each bank has a quota for hiring foreigners.  If you ask any of these IF graduates, they would say they are willing to take a haircut  on their salary as long as they are learning from the BEST.

Trees die standing up

Our sector is *supposedly * be reshaped from top to bottom by graduates from Far Eastern, Middle Eastern and Western universities. However, the talents of our * supposedly*  IF future leaders are being killed slowly, painfully and silently. These were the voices of the unheard of !

BioNote

Mohammed Khnifer is regarded as part of a second generation of Islamic banking practitioners who have a solid academic background in Islamic finance. He is a holder of an MSc. in Investment Banking & Islamic Finance from Reading University and is a Chartered Islamic Finance Professional (CIFP) from INCEIF. He is one of the most prolific and well-known journalist specializing in Islamic Finance today. For the past six years he has been in charge of the editorial content for the Islamic Banking section of Al Eqtisadiah (Kingdom of Saudi Arabia). By 2011, he is expected to earn his MBA in Islamic Banking & Finance after he won the Silver Scholarship Award from Bangor University. He has authored various papers and articles on Islamic finance.
He can be contacted at mkhnifer1@gmail.com .

Acknowledgement
First published in Opalesque Islamic Finance Intelligence Jan 2011 issue and reproduced here with permission of the author and OIFI.

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2 thoughts on “DEARTH!!!

  1. Joy Abdullah says:

    Great point Alun. There’s always a contrary argument to any issue.

    Whilst what you say is true i.e. hands on experience is still valuable, the issue is the graduates coming out are not getting that opportunity. In order to start somewhere one has to be given a chance to join and learn the ropes.

    Now whether its the state of things i.e. not many jobs around (as many of us see)due to the overall economic scenario or its a question of an individual organisation’s policies in terms of people development– if these graduates are not provided the chance then how will a next generation of specialised practitioners come about?

    As a start, if at least there is a job offer on the table then issues like salary and terms come into play.

    In my humble opinion, perhaps the association between the various (IF) academic institutions and the industry is not as strong as in other industries and thus perhaps there’s no real flow of people into the industry at the starting gate.

  2. Alun says:

    Has anyone noticed that there aren’t many jobs around in finance – let alone Islamic finance. So perhaps this is nothing to do with Islamic finance at all, and just the state of things these days.

    Also, fresh graduates seem to think that they are owed a job because they have a piece of paper that says they know what they are talking about. Paper isn’t a replacement for real world experience. As for being paid a ‘premium, – please get real.

    I’ve brought a few people into the world of islamic finance (to the extent that a couple of them have actually ’employed’ me for some projects). I can think of three people in particular – they all took a step back (in money terms and ‘seniority’) and invested significant time/effort into developing their hands on skills/experience. Today these three are directors within firms in the Islamic finance arena. At no point did they believe that things were stacked up against them, or that they were owed anything.

    There is a contrary argument to this article that if Islamic finance is a ‘calling’ that sacrifices have to be made to be able to participate.

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