Hussein Al Qemzi, group chief executive officer of Noor Investment Group and CEO of Noor Islamic Bank, believes that Islamic finance has the potential to evolve beyond its niche market and become the globally accepted norm in banking. But before it can do this, it must diversify its products and services, as well as achieve greater standardisation.
With sharia-compliant investments outperforming their 'conventional' counterparts, appetite for these products can only be expected to grow. But the industry is still too fragmented, according to Ian Lancaster of Cogent Asset Management, with a lack of cross-border connectivity preventing it from achieving critical mass.
The growth that has characterised the rise of the Islamic finance industry has thus far evaded the asset management segment of the market, with a dearth of institutions focused on the creation of sharia-compliant investment products. John A Sandwick of Islamic Wealth & Asset Management assesses the situation.
The Banker's annual Top Islamic Financial Institutions ranking shows that growth has dropped into single digits for the first time since the ranking began. This, combined with the restructuring of sharia-compliant operations at major players such as HSBC, shows an industry that is entering a new phase of maturity; a phase that is, however, still rich with opportunity.
The renminbi's slow move towards becoming a global currency has gathered momentum in the past 12 months, and with China's new premier signalling his intention to smoothen this process even further, the currency appears destined to achieve reserve status in the not-too-distant future.
With South Korea's underdeveloped capital markets struggling under the growing weight of the country's rapidly expanding conglomerates, the pressure is on for the sector to evolve and mature – with the government, regulators and banks all taking steps to achieve this goal. But will new regulations and improved infrastructure be enough to transform the industry?
Many of South Korea's largest financial institutions are having to reconsider their investment banking strategies in the wake of changed capital markets regulation, increasing competition and narrowing profits, with many turning to the international market.