published in December 2013, suggested a 17.6 per cent increase in Islamic banking assets over the previous four years, to $1.7 trillion. The report predicted growth of 19.7 per cent to 2018, with the ‘rapid growth’ markets, aside from Bahrain, expected to be Qatar, Indonesia, Saudi Arabia, Malaysia, UAE and Turkey. Path with iMAL is the highest profile specialist in the Islamic systems sector but there are other suppliers that also claim to have built Shari’ah compliant systems from scratch. The Bangladeshi pair, Leadsoft and Millennium Information Solutions, fall into this category. Misys’ long-standing Equation system has had a good uptake for Islamic banking in the past. It is a broad, universal banking system but is tied to the IBM iSeries. Misys’ newer Bankfusion is also intended to incorporate Shari’ah support. There is a clutch of other broad, mainstream core banking systems that have gradually seen the incorporation of Shari’ah banking to a greater or lesser degree. They include Sungard’s Ambit Core Banking, TCS’s Bancs, Infosys’ Finacle, FIS with a number of systems, and the offerings of the two heavyweights, Temenos and Oracle FSS. There are smaller, regional specialists, albeit with broad solutions. These include Pakistan-based Autosoft, Lebanon-based BML Istisharat,


2006-2008


The Islamic banking sector was buoyant in these years and attracted the attention of suppliers as a result. Speaking in early 2008, Nick Brewer, at that time group strategy manager at Temenos, said: ‘It is very hard to sell any systems in the Middle East unless they offer some kind of Islamic processing.’ Arguably, the same was true of some other countries, such as Malaysia. ‘Islamic finance has become a generally more desirable thing for banks to offer,’ he noted. Much of the business was coming from conventional banks that were looking to ride the wave, through Islamic windows. There was pressure from bank staff, customers, shareholders and governments to increase the range and kinds of Islamic offerings. There have been geographical changes as well. Activity in the Middle East was shifting somewhat. UAE was much quieter in terms of core system selections in 2008 than it had been in the previous few years


24


Infopro, Microlink and Silverlake from Malaysia, and ICS, which spans the UK and Jordan. Indian suppliers have also sought to move in, such as 3i Infotech, Infrasoft and Nucleus. There are also some specialists with Shari’ah clients, such as CCK in treasury and China Systems in trade finance. There are also complementary applications, not covered here because they are not back office offerings, that claim Shari’ah support, such as for portfolio management. In February 2011, for instance, Bloomberg arrived with its Islamic finance investment information platform, Bloomberg ISLM, which it describes as a ‘one- stop shop’ for Shari’ah-compliance screening, financial ratings, pricings, news and other relevant and important data. ISLM offers a specific daily Islamic finance news product with coverage of the Islamic bond market, extending at the outset to some 1500 sukuk and 180 Islamic loans, as well as information and price contributions from many of the banks covering Islamic money market instruments (such as murabaha). Bloomberg ISLM was also set up from the outset to screen over 40,000 equity investments for Shari’ah compliance. For this function it deploys the ‘well-established’ screening engines from Ideal Ratings and Amiri Capital.


as the economic down-turn hit. Instead, there was considerable activity in some other countries in the region, particularly Qatar (nine new core selections in the year, several of which were for Islamic start- ups) and Iraq (four selections – see below). Path was a leader, there were also deals for other domestic suppliers such as BML, and other wins for the likes of Misys, Infosys, Temenos and Oracle FSS. A couple of the latter’s 2008 wins around the globe had an Islamic banking component and this supplier also gained extra business with this form of banking from a couple of existing clients. One interesting deal was for Oracle FSS’s new wealth management front-end to reside with iMAL at London-based Bank of London and Middle East. Misys gained Cairo-based Islamic bank, Egyptian Saudi Finance Bank, for Equation in 2008. Misys was helped by the fact that it was able to use another Egyptian bank, United Bank, as a reference. The latter, formed from the merger of three banks, had an Islamic window supported by Equation. In early 2009, Malaysian supplier, Infopro,


Islamic Report www.ibsintelligence.com


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