ITS ETHIX makes islamic finance compliance easier
Nasr Albikawi, CEO of International Turnkey Systems, introduces us to its ETHIX Islamic finance compliance product
Islamic finance is a burgeoning industry. And with more people looking towards more ethical financial solutions, it’s becoming a part of the mainstream market and offering. Nasr Albikawi, CEO of International Turnkey Systems, discusses the international growth of Islamic finance, and how ITS ETHIX can reduce the costs of Sharia compliance.
World Finance: Islamic finance is a burgeoning industry. And with more people looking towards more ethical financial solutions, it’s becoming a part of the mainstream market and offering. With me now to discuss is Nasr Albikawi, CEO of International Turnkey Systems.
Well Nasr, in what way has Islamic finance evolved over the last 30 years?
Nasr Albikawi: It has evolved in a very noticeable way. Islamic banking started around 30-40 years ago, and all the financial institutions in the region are adopting this model and are enhancing their services as they go.
So as we go, we see more institutes are offering their services, because the demand in the market is increasing. And we expect also to increase as we go for the coming few decades, also.
World Finance: And what role would you say technology has played in the development of Islamic finance?
Nasr Albikawi: As in all other businesses, technology is kind of a platform and enabler. Exactly as technology played a role in conventional, classical banking, it’ll do the same thing in Islamic banking and all other businesses.
World Finance: Looking at ETHIX Finance now – how does it differ from other software packages on the market?
Nasr Albikawi: In terms of addressing the business needs from an Islamic perspective, ETHIX is ahead of all other competitors in all respects. Because we started earlier in this market, we’ve been able to work with our clients, our partners, the banks, to identify those needs and to write the application to meet the Islamic needs that are compliant with Islamic Sharia.
So we ahead of all competitors in addressing Islamic financing business needs.
World Finance: How big a challenge is compliance for your clients, and how has ETHIX been able to overcome this hurdle?
Nasr Albikawi: It is challenging, because the Islamic way of doing finance is a bit different. It’s not straight-forward, there are a lot of calculations to be done. So it is challenging, yes. And because we’re doing it for the first time, it requires a lot of effort, it requires a lot of information from the client side, from the Sharia… the counsellor part, because we have to consult at our side. At ITS, the bank side, we have to go back to the Sharia Islamic Committee or counsellors.
But as I said, for quite some time we’ve been able to add results and enhance it as we go, being ahead of everybody else.
It is a challenging task, and it’s not straight-forward. But we’re up to it, and we’re trying to keep our edge moving forward: meeting the customers’ and the market’s demands and expectations.
World Finance: Likewise how can ETHIX reduce costs and strengthen customer services?
Nasr Albikawi: By being able to complete and accomplish the tasks and the requirements of Islamic banking using our system’s applications and infrastructure. This is definitely will play a major role in enhancing and reducing the total cost of ownership. And the output of the whole process by increasing the productivity of the setup in general, the department, and individuals.
World Finance: Now Nasr, there has been a lot of unrest in the Middle East following the Arab Spring. What sort of impact has this had on the industry?
Nasr Albikawi: From the economic side, it has been impacted negatively, by slowing down projects. But at the same time, people are depending on banks to deposit their money and to keep their money. So from one side, they’re not moving their money, they’re not investing much of their money, and they trust the banks most now.
So that kind of encouraged the banks to expand more on their services, expand their capacity, add more services to encourage people to keep their money with them. So we’ve seen some kind of new services that have been introduced by those banks, and the base of these services have been introduced to the market has increased a bit due to the circumstances in the region.
That’s pushed us of course to start meeting the demand by working with these new requests, new services, as per the compliance with Sharia law.
World Finance: Finally, how do you see the industry developing?
Nasr Albikawi: It’s promising, because we would still like to make the costs of complying with Sharia law and financing low, and methods of complying with conventional banking and market requirements. So that gives us more opportunities to work on more services and introduce more business functions as we go.
In terms of market size it’s also very promising. Because today we receive demand and calls from the west part of the world. So Islamic banking is not limited only to our region and to the Asia-Pacific. We receive requests today from North America, from South America, from China, from Japan. And we know there are some governments that are working on introducing Islamic financial regulations, and regard it as part of their central banks’ rules and regulations.
So I think the future is promising. We plan to go global in 2017 to meet the demand that we see growing all over the world.