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IBS SALES LEAGUE TABLE
Islamic banking – the real alternative to conventional banking
There is no denying that Islamic banking is here to stay and is viewed by many as a contender for the ideal alternative to the conventional banking business model
O
utside of specialist Islamic banks, conventional banks have started to offer Shari’ah-compliant products to cater to the under-served Muslim populace. A majority of the Muslim population have been restricted from using traditional banking services provided by conventional banks due to Islamic Shari’ah laws disallowing products involving interest and speculative trading.
The IBS Islamic Banking Sales League Table 2017 reflected this trend of increased adoption by banks with the total number of Islamic core banking deals in 2016 standing at 30, a significant jump from the 19 reported in 2015. As usual, universal banking systems accounted for more than 85% of the total Islamic banking transactions.
The system suppliers landscape for Islamic banking solutions was made up of a mix of specialist suppliers, such as Path Solutions, and generic core banking vendors who offer a Shari’ah-compliant version of their conventional core banking product.
Last year’s winner, the Kuwait-based Path Solution’s Islamic core banking system, iMal, maintained its leadership position on the Islamic Sales League Table notching up nine deals in 2016, more than double the number in 2015. The specialist Islamic banking solutions provider scored customers in two new markets during the year. These included its first deal in Morocco for Crédit du Maroc (CDM), a subsidiary of the French Crédit Agricole group, and Trustbank Suriname, its first core banking deal in the Americas region. Notably, the Trustbank deal was won in competition with Temenos and Oracle FSS. The runner-up on the Sales League Table was Temenos Core Banking’s Islamic Suite which also recorded a solid tally of seven deals in 2016, compared to three in 2015. Notable deals included a Standard Chartered multi-country deal that involved the implementation of both conventional and Islamic systems. The other usual notable
suppliers on this year’s Sales League Table included ICSFS (4), TCS BaNCS (2), ITS (2) and BML Istisharat (1).
Interestingly, deals by general core banking back-office vendors such as Temenos, TCS, Misys and others constituted almost half the total Islamic core banking deals. This is pretty much a reflection of the market dynamics, where general core-banking suppliers are offering Islamic banking suites to their conventional core-banking clients who are looking to introduce an Islamic window for their customers.
The Islamic banking systems market is expected to continue its strong run in the coming years. Between 2010 and 2014, Islamic banking assets reportedly grew at a CAGR of 16%, more than twice the growth rate of conventional banking assets, which struggled due to low interest rates and economic headwinds in major markets.
This does not, however, mean that the Shari’ah law based participation banking models are recession proof. The last
IBS Islamic banking SLT 2017 | Trends
www.ibsintelligence.com | © IBS Intelligence 2017
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