ITS has contributed over 20 sites in the Gulf to date, and has
often focused on converting conventional systems into Islamic ones. This was the case at Kuwait International Bank (formerly Kuwait Real Estate Bank) in 2008. ITS claimed to be undertaking similar projects at Bank of Kuwait and Middle East (BKME), and elsewhere, in 2009. BKME changed its name to Ahli United Bank in April 2010, with an Islamic solution provided by ITS. In the case of Kuwait International Bank, ITS had been chosen mainly because of its experience in the Kuwaiti market, where it was already working with most of the banks. The project was eventually completed but faced difficulties in the data migration phase, according to the bank’s IT manager, Ziad Al Hasawi. The actual cut-over (from Temenos’ Globus) was later than originally planned due to the decision to spend more than a year in parallel runs, and due to the concerns of the central bank. Not all of these were related to IT: for a while the bank was without a general manager. The data migration caused the most problems, Hasawi stating that the bank was still having problems in mid-2009. The conversion of ‘interest’ into ‘profit’ was also a cause of difficulties within the system. Hasawi stressed, however, that Islamic banking was new to most of the original employees at the bank, and even new to the regulator, and he was happy with the system. There were seven users of Ethix by early 2011, according to the vendor. At this time, ITS was upgrading other Phoenix users outside the US to Ethix. By 2010, ADIB had opted for an upgrade in both its home territory and Egypt, while EastWest Bank in the Philippines completed an upgrade in 2010. Another customer outside the Middle East was, as noted earlier, Zenith Bank in Nigeria. Zenith had attempted to move away from Phoenix and onto Temenos’ T24 but, by 2009, had abandoned the attempt. It re-signed with ITS and moved to Ethix. More recently, Cooperative Agricultural and Credit Bank in Yemen contracted to upgrade to Ethix in early 2011. A new win was also registered in Libya in 2010. This was at Gumhouria Bank, the second largest bank in the country. It chose Ethix for both core banking and branch automation for
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its 142 branch network, with the first branch live by mid-2012 and a further seven by the end of the year. In 2009, ITS received certification in Shari’ah compliance by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI, a standard-setting body for the Islamic finance industry) for the Islamic finance module of Ethix. However, the accreditation was withdrawn four years later. This happened after ITS rejected the new certification process which was announced by AAOIFI following its tie-up with Ernst & Young in early 2013. The new procedure was deemed too lengthy and costly, according to ITS’s Abdou. New Islamic finance clients initially proved hard to come
by, with one missed opportunity coming at Warba Bank in its home market of Kuwait, with the new Islamic bank selecting Oracle FSS’s Flexcube. However, there was something of an upturn in 2011 as three Islamic gains were made, coming in the UAE at Reem Finance and start-up Siraj Finance, as well as in Sudan at Al-Jazeera Bank. Further progress was made in Sudan the following year as ITS rolled out the Islamic version of Ethix at the Sudanese subsidiary of ADIB. By this stage, Ethix was now used by the bank in the UAE, Iraq, Egypt, Yemen and the UK, with Qatar also added in 2011. 2012 also saw Ethix selected for the National Bank of Egypt’s new operation in Sudan. This subsequently went live after a three month implementation. Unlike in Egypt, Sudan’s regulator demands that all banks must be Islamic, said Mohamad Meneassy, ITS’s manager for Africa. Because of this, the National Bank of Egypt (NBE) ‘was looking for an expert in Islamic banking’, he stated. The main competition came down to Path and its iMAL offering. NBE also visited Al-Jazeera Bank and received ‘positive feedback’, said Meneassy. Around the same time, ITS also finalised a deal with NBE to implement Ethix for Shari’ah-compliant banking operations across its domestic branches in Egypt. Ethix was to sit alongside the main core banking solution at NBE, Flexcube. Egypt’s first Islamic and commercial bank, Faisal Islamic Bank, also selected the Ethix platform in the first half of 2012 to
Islamic Report
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