g
to have a bank account and credit card, with internet access for the former. Among prominent suppliers in Iraq have been BML Istisharat (Al- Rahmania is its local partner), another company with Lebanese connections, Capital Banking Systems (it was 75 per cent owned by Audi Saradar Group and had traded for much of its history as Orion Systéme), ICS, and Misys with Equation. The latter gained the largest state bank, Rafidain Bank, within a deal endorsed by the Ministry of Finance in December 2006. Misys teamed up with B-Plan Information Systems. The latter is actually based in Manchester in the UK but was set up by two Iraqi Kurdish brothers and had been working in the Iraqi public sector for more than three years. At Rafidain, the consortium beat off competition from Temenos and Sungard System Access, among others. By early 2008, the bank had 148 domestic branches and international branches in Beirut, Cairo, Jordan, Abu Dhabi, Manama and Sana. In the private banking sector, BML and Al-Rahmania won deals at Union Bank of Iraq and National Bank of Iraq. The banks opted for centralised systems, with thin client branch interfaces and connectivity through VSAT. The central system for Union Bank of Iraq is in Arbil, in Kurdistan, while National Bank of Iraq’s system is in Amman, in part because it is 60 per cent Jordanian owned. BML chalked up two more deals in the country in the first half of 2009, from 13-branch Mosul Bank and 54-branch Minare Bank, which operates in the Kurdish region (and was created by pooling the branches in this region of Rafidain and Rasheed Bank). ICS had wins at Elaf Islamic Bank, Investment Bank of Iraq and Ashur International Bank for Investment. Elaf Islamic Bank opened with a branch in the green zone in Baghdad and was owned by an existing 28 branch bank, Warka Bank for Investment and Finance. Warka took the conventional banking version of ICS’s Banks and Elaf had the Islamic version. Warka Bank’s security manager, Shaymaa Saadi, said ICS’s system was ideal for the two banks, with the necessary flexibility and ease of use. The solution covers the full range of the bank’s commercial and retail activities. Its branches are linked via VSAT and leased lines to a central server in Lebanon and to a disaster recovery site in Jordan, she said. Warka Bank was set up in 1999, had opened a branch in Beirut and had become the leading private bank in Iraq. It already provided internet and mobile phone banking and had an on- line ATM network. It is worth noting that Capital Banking Solutions has been successful in the country without having Shari’ah banking support, although it was talking about evaluating compliance in the
second half of 2011 and claimed to have this in place by 2013. While the traditional Islamic banking strongholds continued to bring the vast bulk of the demand, there were new shoots elsewhere. Islamic Bank of Asia, a Shari’ah-compliant subsidiary of DBS in Singapore, took the Islamic banking modules of Flexcube in 2007. And Nucleus reached as far as Zambia in 2009 with a win at Rabobank (what was National Commercial Bank) for its FinnOne Retail system, with the project apparently including Islamic banking.
2009-2011
The market for Shari’ah-compliant banking systems has not been immune from the economic turmoil. For a while, it looked more robust than for conventional banking systems but that subsequently changed. According to the data submitted by the vendors to IBS for our annual Sales League Table, there were 25 core banking sales worldwide in 2010 for Islamic finance activity. In 2009, the number was also 25, which indicated that despite the financial problems, overall the Shari’ah-compliant finance industry showed stability. Given the 2011 new-name sales figure was almost identical once more, stability still seems to be the appropriate description. Geography-wise, the Middle East and North Africa (MENA) and Asia – the established strongholds of Islamic finance – showed demand for dedicated software. Africa had a spate of contracts, but other parts of the world failed to produce any deals for Islamic banking software providers. The rush of start-ups in the UK of a few years earlier, for instance, dried up. In MENA, Iraq was the busiest country for the core banking vendors in 2010, with demand for both conventional and Islamic solutions. Twelve new-name deals were recorded in the country that year, a rise from five in 2009 and four in 2008. Of these, five were for Islamic core software, which represented nearly a third of all Shari’ah- compliant core system sales in the region (the total for MENA in 2010 was 17). Of the Islamic deals in Iraq, Path Solutions won two, at International Development Bank of Iraq and Kurdistan International Bank. Temenos scored twice as well, with Elaf Islamic Bank (which, as pointed out, had supposedly gone with ICS a few years earlier) and National Islamic Bank. The fifth win, at Iraqi Islamic Bank, went the way of ICS.
Saudi Arabia was another buoyant market in 2010, also with five Islamic Report
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