gif Islamic Finance


Developing Money Markets and Staying Ahead of the Competition Many key competitors - mainly mainstream financial banks and institutions - have effectively de- veloped their branding scheme in order to attract clients. One benefi- cial strategy used by many is to tap into mainstream brands, allowing them to benefit from operating un- der the banner of reputable finan- cial institutions.


Many companies have found de- signing Islamic instruments for monetary operations to be con- ceptually difficult. In countries with a dual banking system, the lack of non-interest-bearing securities has limited the scope of money management.


The liquid nature of banks’ liabili- ties, related to the predominance of deposits with short-term ma- turity, predisposes the system to- wards holding substantial liquid assets and excess reserves.


In turn, this inhibits finan- cial intermediation and a deepening of the market. The difficulty of defining rates of return on these instruments has also con- tributed to constrain the development of money and interbank markets.


The development of these markets is indispensable for the conduct of mon- etary policy and for the deepening of the financial market. The inadequate development or absence of these markets in many countries constrains cen- tral bank intervention through indirect instru- ments, and has occasion- ally encouraged the use of direct controls on credit.


The absence of well-organised, liquid inter- bank markets — which can accept banks’ overnight deposits and offer them lending options to cover short-term financial needs — has exacerbated the tendency of banks to concentrate on short-term assets.


In order to progress within effective liquid- ity management, it is necessary to adopt a comprehensive approach to developing both money and securities markets. An efficient lender of last resort facility should also be established; suitable interbank instruments


32 Global Islamic Finance May 2012 Figure 4: Motor Vehicle


industry - cars Electronic


industry such as Mobile & Laptops


Food


industry - Halal food & drink to sponsor


Islamic institution/ companies


Islamic media such as Islamic Finance puplication 7 TV advertising on Islamic channels


Diagram by Tasnim Nazeer


financial consultancies, can help Islamic financial companies to or- ganise their objectives and ensure that all desired targets are met. Successful advertising through Is- lamic banks, and major financial institutions which include Islamic financial subsidiaries, can gain you a reputable name by acting as a banner for your product, while also giving you the safety of association with a successful brand.


In the next edition of this series on marketing Islamic financial products, Global Islamic Finance Magazine will discussing methods of attracting consumers and inves- tors from your target market, build- ing your brand, and ensuring that you stay well ahead of your com- petition.


Islamic Branding the Key Way to Success Branding your product in a truly Shariah-compliant manner is the key way to spur success for your company or business, and to meet the needs of customers wishing to utilise Islamic financial products and services.


Developing innovative strategies can help your business to grow con- tinually from strength to strength, and ensure that you gain the neces- sary marketing skills to further progress.


for active interbank trading or for monetary operations must be developed. Financial institutions must actively use security tech- niques in order to manage the maturity and risk spectrum of assets and liabilities; and must make risk management and hedging instruments available, an action which pre- supposes the resolution of various legal, in- stitutional, and accounting issues. (IMF.org)


The Middle East and Malaysia are prime hubs for marketing Islamic financial prod- ucts, and contain the key industry players to take an Islamic finance product to the fore- front of the sector. Conducting a marketing strategy, including liaison with professional


The highly competitive financial industry is buzz- ing with activity from all around the world, and the world’s primary hubs for Islamic finance, such as Malaysia, are spearhead- ing the industry’s growth and further progress into


the multi-million-dollar sectors.


Commodities within the Sukuk and Takaful industry in particular are growing at an un- precedented rate around the world, creating an expanding space for investments con- tributing to the growth in innovative Islamic financial products.


Conventional banks often use sponsorship from lucrative industries such as alcohol production, which are however inappropri- ate for Islamic financial products. However, some popular industries, such as motor vehicles, and state-of-the-art electronics,


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