gateway to islamic finance interview - Institute of Islamic Banking ...

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gateway to islamic finance interview - Institute of Islamic Banking ...

ANALYSIS

NEWHORIZON July–September 2008

Naji Moukadam,

Path Solutions

iMAL (‘i’ stands for Islamic and ‘mal’

means ‘money’ in Arabic) has proved to be

popular in Path’s traditional ground of the

Middle East, and more recently, has found

new takers in Malaysia, Africa and the UK.

With 14 new wins in 2007 alone, iMAL

is among the most popular Islamic

banking solutions.

It is worth noting that the bulk of Path’s

recent contracts have come from start-up

banks, with a number of deals in the UK,

where Islamic finance is notably on the rise.

The latest one is Gatehouse Bank plc, a

fully Shari’ah-compliant wholesale

investment bank based in the City of

London and recently authorised by the UK

Financial Services Authority (FSA). The

bank commenced operations in April 2008,

confirms Twalha Dhunnoo, head of finance

and operations at Gatehouse. Gatehouse’s

parent company is The Securities House

K.S.C.C., an investment firm in Kuwait,

with interests overseas.

Incorporated in May 2007, Gatehouse

spent most of last year working on a

number of start-up programmes, recalls

Twalha Dhunnoo, including applying to the

FSA for authorisation, recruiting a team of

qualified front and back office personnel

and ‘investing in the right systems and

The project was divided into stages.

The first one consisted of extensive testing

and customisation, so that by the first day

of 2008 the system could be put into action.

‘We have been recording all transactions

and expenses starting from January 1, as

our financial year runs from January 1 to

December 31. We didn’t want to delay and

back log transactions.’

The live system was customised to initially

meet the bank’s requirements in the areas of

accounting, reporting and operations.

‘We did a lot of work in terms of bringing

the system to the necessary standard to

take it live as at the start of the year,’

notes Dhunnoo.

The second stage involved the testing of

additional Islamic banking products that

Gatehouse will offer and took place in the

period between the first round of user

acceptance testing and the FSA authorisation.

Technology is a major factor for Islamic banks in

having a competitive advantage.

Naji Moukadam, Path Solutions

To provide local technical support for its

Asian and European customers, Path

opened new offices in London and Kuala

Lumpur last year. And earlier this year, the

company launched its own education centre

– Path Solutions Academy – due to a very

high demand for Islamic finance specialists

in the market. At present, the courses are

offered only to the company’s staff, but ‘the

plan is to go externally, across to Path’s

customers and other people that are

interested in Islamic banking and

technology,’ notes Moukadam.

‘Technology is a major factor for Islamic

banks in having a competitive advantage,’

he continues. ‘It is empowering people at

these banks and helping them to make

better decisions.’ In his view, one system

with a modular approach works best.

infrastructures’. ‘We needed a core system,

which is compliant with Islamic banking,’

he states. The bank engaged one of the Big

Four professional advisory firms to support

the system selection process (Pricewaterhouse-

Coopers, Deloitte Touche Tohmatsu, Ernst

& Young and KPMG comprise the Big

Four). This constituted drawing up a

shortlist from a number of potential

vendors including Path Solutions, who

eventually landed the deal.

The implementation process started in the

last quarter of 2007, shortly after the

contracts were signed. The bank mobilised

its staff, supported by external expertise,

where required. ‘We wanted to buy and

embed best business and system practices

upfront, before we went live, not after’,

explains Dhunnoo.

Path is still actively involved in the project.

The company has an office in London and

‘can be called at short notice when

required’. User training is also carried out

by Path. ‘The project is on-track,’ states

Dhunnoo. The participants are ‘working

together’ to ensure systems’ readiness for

full ‘business-as-usual’ operations, he adds.

Gatehouse is just one of a number of

Islamic financial institutions looking to gain

significant ground in the UK, and one of

many more opening for business around the

world. With the players equipping

themselves with sophisticated core

solutions, the world may well see Islamic

banking and finance take far more ground

from conventional banking that it had ever

imagined. Those that are ready for it will

reap the benefits.

36 IIBI www.newhorizon-islamicbanking.com

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