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 Islamicfinance 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 offinance 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 Islamicfinance 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 ofIslamic 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
15th Annual 23, 24 & 25 November 2008, Gulf Hotel, Kingdom of Bahrain The 15th Anniversary 15 years of mapping the future of the global Islamicfinance industry 15 years of gathering industry thought leaders in dynamic debate 15 years of bringing together over 1000 international delegates each year 15 years of successfully working with the market leaders in the global Islamicfinance industry 15 years of delivering a one of a kind spectacle to the Islamicfinance industry Media Associate MEGA BRANDS. MEGA CLIENTS. MARKET LEADERS.