or two. Reflecting this, French supplier, Delta Informatique (acquired by fellow French company, Sopra, in late 2011), set about customising its core system working in Sudan with a Saudi Arabian supplier. However, when it bid in Iran, it found that there were too many complexities to do with this country’s Shari’ah rules (it is a Shia country), Farsi language and different calendar. A project with a bank here, Zamin Bank, did not go ahead. Where such difficulties exist, local suppliers often come into their own. Iran is a case in point. The banks have tended to be self- sufficient. One of these, Pasargad Financial Group, established its own IT subsidiary, Fanap, to take care of the group’s 23 members, ranging from leasing companies to banks. Pasargad Bank is at the heart of the group and was the country’s fastest growing private bank, having been set up in 2005. The bank set out with a solution from an existing local vendor, Kishware, but replaced this with a new solution built over the following couple of years by Fanap. That Oracle and J2EE-based system is marketed to other banks in the country as well as outside of Iran as well (Fanap established a subsidiary, Dotin, in March 2014 to take the core system and other applications to international markets). Kishware itself started to eye Syria as a first international move. The Farsi language support also suggested that countries such as Tajikistan and Afghanistan could be of interest. Its system, Negin, was developed in the late 1990s and was taken initially by Saman Bank. It grew to around 15 users at home, spanning state-owned such as Bank Mellat, which had the supplier’s card management system, Postbank of Iran, which had its retail and Point of Sale software, and private banks such as Eghtesad Novin Bank, Parsian Bank and Sinabank. Kishware also competed with a state-owned software company, Khadamat. Kishware (now Tosan) has a Malaysia-based subsidiary, IDCorp, which is the focus for its international aspirations. The main success story in Iran to date with outside software has been Bank Keshavarzi’s roll-out of TCS’s Bancs. However, another sign of an opening up came in early 2009, with the selection of ICBA from Infopro by Ghavamin Finance & Credit Institution, taking modules for Islamic financing and deposits, plus remittances, MIS, general ledger and internet banking. Infopro was helped by having Farsi support through an implementation of ICBA at Azizi Bank in Afghanistan. What the Iranian situation shows is that, as well as the mainstream options, in some countries the choice for Shari’ah banking solutions is considerably expanded by the presence of local options. Understandably, when looking for compliant systems, they have
26
tended to evolve in line with this form of banking as a whole, so greater sophistication has only come over time and those suppliers that have been operating in markets without any, or much, Shari’ah banking have been slowest to move. Notably, during 2008, two French suppliers with a strong presence in North Africa announced their Islamic banking intentions. These were Delta (as mentioned, now part of Sopra) plus traditional rival, SAB. The difficulties of support have seen some problem projects and a few reversals. There appeared to be a u-turn at Bank Islam Malaysia. In late 2007, the Shari’ah bank decided to replace the SIBS system from Malaysia-based Silverlake in the back office and the internet banking front-end of Oracle FSS with Temenos’ T24. The intention was for a go-live towards the end of 2008. However, the decision then appeared to be reversed, with Silverlake claiming by early 2009 to have signed a new contract. Al Khaliji Bank in Qatar did not have a happy experience, to put it mildly. Set up as a conventional bank, albeit with plans to fairly swiftly offer Islamic banking, it took a surprisingly large range of applications, with SAP’s core banking solution at the heart (other applications included Misys’ Opics for treasury, China Systems’ Eximbills for trade finance, SAP for ERP). There were talks with SAP about tailoring the back office system for Shari’ah banking. CSC worked on the project. However, the project went hugely over budget, the senior management of the bank was replaced, and the central core system project was canned. One area of systems activity in the last few years, much of it with a Shari’ah slant, has been Iraq. As the rebuilding of the country’s banking infrastructure started in earnest, so there was a rush of automation decisions. The Central Bank of Iraq approved 35 new licences in early 2008, to add to the existing 30 or so banks. ‘Some are active, some are still restructuring,’ said Raid Rahmani, CEO and chairman of Iraqi company, Al-Rahmania IT and Telecom Services, at this time. Much of the focus was on gaining local and foreign investors, he said. There was a period of grace but, ultimately, each bank would need assets of at least $40 million. There was already some foreign ownership, with HSBC and National Bank of Kuwait among those to have majority stakes in local banks, but the parentage was not widely promoted in Iraq itself due to security fears. The existing private banks each had between two and 30 branches but most had ambitions to extend their reach across the entire country. Logistical and financial help had come from the USAid organisation, while the central bank had been providing a lot of training. The stated aim was for every Iraqi citizen
Islamic Report
www.ibsintelligence.com
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