Innovation key to growth of Islamic finance
Conference is told, growth is strong, but innovation and development of products and rules are key to survival.
Islamic banking has experienced annual double-digit growth figures and looks set to become a major force in the banking world in the coming years.
Delegates attending the 11th annual World Islamic Banking Conference (WIBC), in Bahrain, believe the strong growth in the industry will continue throughout the entire region and will play an increasingly important role within the global banking scene.
The conference also heard that the total value of assets held by Islamic banks across the Gulf region reached US$50 billion in 2003. Moreover, industry experts told the conference that the estimated total of global assets held by Islamic banks was more than US$250 billion, and that this is likely to continue to grow over the next few years as more and more of the world's one billion Muslims deposit more of their cash in Islamic financial institutions.
But the continued strong growth could only be supported by sustained innovation, the conference was told. There are considerable challenges ahead, including the ability to constantly develop new, attractive products that will appeal to the wider Muslim community.
Developments in retail banking would continue to drive the industry forward, but Islamic insurance (Takaful) was also tipped for considerable development. Regulation was another area to focus on, as delegates heard that one of the main challenges would be continued efforts towards enhancing and implementing best practice and compliance with international standards, such as sound corporate governance and good transparency.