This was the headline of an article published on gulfnews last week – “Islamic Finance talent gap to reach 8,000 plus”.
The same week, we received this via email – “I have done my Certification in Islamic finance and was looking for the opportunity in the field of Islamic finance. It’s very sad and unfortunate that I didn't receive the response as expected even after hearing that Islamic finance industry needs resources to grow. Everywhere they ask for the experience; the fact is how we will get the experience if we will not be given a chance to enter. In that case is the Islamic finance education meant for existing conventional banking sector only where people sitting have experience of banking and finance and are considered? Few months back I had a chance to speak to an AVP of a renowned bank in the UAE. I was so disappointed hearing his views as he suggested that being an Auditor and working for X company ( one of the 4 major auditing firm) for 7 years I should not even think to change the field. I wanted to do further studies in the field of Islamic Finance but the behavior out there is so disappointing that I have opt for the CFA rather than going further. When existing experienced people not ready to accept the new entrants where would we go???”
1. The title of the article is not the first or only such claim. It is the common claim in most of the conferences as well not just news media.
2. The claim in the email and frustration of such kind are also not the first or rare found phenomena, rather a common outcry that has been ignored for far too long.
3. There were article published and widely circulated presenting mismatch of the claim vs. reality when it comes to available jobs. Here is the most popular one: “The case of Islamic Finance graduates against HR: How the industry lost its young blood”- by Mohammed Khniffer
4. ‘Analysts have said earlier that while the market is growing, there is a dearth of qualified personnel with Islamic banking skills.’ – this is the common claim as well which was repeated in the gulfnews article. The question is what kind of skill is talked about? Skills that fit the interest of the institution off course, and not the knowledge of Islamic Finance that the freshers might be bringing with them if there seems to be conflict. Understandable. The question is why there would be conflict to begin with?
5. This raises the age old question again – should Islamic Finance institutions direct the education and research or education and research should direct Islamic Finance institutions?
6. How does the interest of an Islamic Finance institution form? Pretty straight forward, the same way interests form at all the for profit institutions in the world. ‘Stakeholders’ is the key word. Who are the stakeholders of Islamic Finance institutions? After shareholders, board of directors, executive level managers, Shariah board, auditors, customers come in mind at some point, but there is a difference in case of Islamic Finance institutions from other for profit institutions in the world. The basis of demand of products and services from Islamic Finance institutions and associated interests are not uniform by its customers. There are primarily two broad categories – the group of customers whose demands generated from the devotion and sincerity to their faith – Islam; and the second group of customers whose demands for Islamic finance products and services are coming not from the devotion or sincerity to faith but the same psychological desire that conventional financial institutions fulfill. Nothing wrong, but there is the problem in case of Islamic Finance institutions. The same categories apply to all other stakeholders. Lately the governments of several countries are jumping into the bandwagon of stakeholders as well.
7. There is no such quality research data yet to show the distribution and concentration of such varying types of demands, but common sense and basic observation plus experiences give us the picture of reality and from that reality we understand which influence is greater that is shaping the makeup of Islamic Finance industry as it is today.
8. How does it relate to education and skill building? Well, the greater influence will shape the education obviously. The irony is to call it ‘Islamic’ Finance, one needs to study at least basic Islamic principles regarding finance, which almost all the education and training providers have to teach. When the students get educated from theoretical aspect of it and enter into the marketplace and see completely different practice, there is a clash of ethics and principles. As human being we cannot deal with sense of guilt, which is something very natural and built into our system. One way we try to avoid that sense of guilt is by totally leaving the source of guilt. In case of Islamic Finance, the young graduates or professionals are avoiding their guilt by leaving the field of Islamic Finance completely. The Islamic Finance institutions are avoiding guilt by not taking those individuals who may bring the religious principles and may pose questions regarding practice that they are unable to answer. It is harder to reeducate rather than educate and that is probably why we hear - “Instead of relying solely on some sort of certification to determine the authenticity of the professional’s Islamic finance knowledge, one could instead use existing finance [employees] and convert them to Islamic finance experts by giving them the requisite training,” by some executives in the industry.
9. Interesting observation is the excuse of lack of experience, as also laid out here in this article: “Does Islamic Finance need you?” by Mohammed Amin. While I personally agree that every individual should seek mastery and expertise in a specialized area to compete in today’s world, but is it really what Islamic Finance institutions are looking for? Who is creating Shariah Scholars? Shariah Auditors and Shariah Scholars are not the same.
10. When I got hired by then one of the top 3 financial institutions in the world straight from the university before even completing my graduation, I didn’t have a single experience in banking; I wasn’t even studying accounting or finance but majored in management. That institution like other financial institutions have management training program that is designed for on the job training rotating in several departments while paying a good amount for the ad hoc problems that the trainee solves. No one doubts that we learn best while we actually do the task, not just by studying. So why there are still very few management trainee programs in Islamic Finance institutions if the industry really cares and needs talent as they claim? What is the real problem and how to solve it? – begs an answer.
Sadia Karim, Founder & CEO Yurizk.
Note: This is a simplistic, generalized analysis from a single perspective. The author acknowledges that the issue is complex and generic comment cannot explain the whole scenario across markets, and institutions. However, the points mentioned here have not come from vaccum and needs to be addressed. There have been a build up of frustrations from individuals and young professionals who have devoted their time, resources, and passion into Islamic Finance and faced brutal reality without proper mentorship or communication. While industry leaders and experts have their platform to exchange ideas, these passionate individuals have no venue to express their ideas, concerns, and opinions which left them with one choice, to leave the IF industry completely. We feel this is unfortunate. Future of any industry depends on its young and fresh bloods, their creativity and innovative ideas. Islamic Finance cannot claim any difference. We welcome open dialogue and follow up comments on this matter that address the points and share possible roadmaps as solution.