The 26th edition of the World Islamic Banking Conference (WIBC), the largest and most prestigious gathering of Islamic banking and finance leaders in the world, kicked off at The Gulf Hotel Bahrain, in the Kingdom of Bahrain on Wednesday.
The forum is spurring a series of discussions focusing on “mega trends in banking and finance”, a theme that resonates with conference’s steady vision to serve as a definitive check point for the global Islamic finance and banking industry.
Showcasing his support for Islamic finance entities to thrive and grow globally and stressing on the way forward for the industry, His Excellency Godwin Emefiele, Governor, Central Bank of Nigeria in his address mentioned, “Globally, banking and ﬁnancial landscapes have evolved radically over the last few years. These changes have been driven by impactful forces including regulatory changes, digitalization and technological innovations. While traditional banking institutions will remain relevant in mobilizing deposits, providing credits, and processing transactions, the conduct of ﬁnancial services will continue to change drastically, reﬂecting major shifts in consumer expectations. Conventional banking with its rising cost of operations may be replaced by faster and more convenient ﬁnancial gateways.”
“All over the world, e-commerce comprising payments for goods and services via internet and mobile applications, is projected to be the dominant factor driving growth as more people embrace digital payment solutions. As at the end of 2017, mobile commerce was estimated to account for 48 percent of digital commerce sales worldwide and is projected to reach US$4.6 trillion by 2022.”
“As policymakers, we need to understand the emerging innovations that are most relevant to the evolving ﬁnancial services industry. We also need to diagnose how innovations impact the ways in which ﬁnancial services, particularly Islamic banking services, evolve over the long run. Thereafter, we need to determine the most optimal response of ﬁnancial institutions and policymakers to these changes”
His Excellency Godwin Emefiele, Governor, Central Bank of Nigeria further added, “The strongest shapers of the changing trends in the ﬁnancial services industry today are the actions of public authorities, particularly in relation to regulation and supervision. Regulatory pressures arising from the 2008 – 2009 ﬁnancial crisis increased the cost of capital, prompted large-scale divestment, and reshaped attitudes towards risk. Stability became a paramount concern for regulators, along with the development of proper risk management control systems”
Dr. Sami Al-Suwailem, Acting Director General, Islamic Research & Training Institute, Islamic Development Bank (IsDB) Group in his keynote address stated, “Many analysts expect the crisis to take place in 2020. The exact timing is not what matters most. What matters is “Why” and “How”. Why would there be another major crisis, and how can it be avoided. Experts unanimously agree: It is because of excessive debt. Low interest rates since the onset of the Global Financial Crisis in 2008 made it unusually easy for corporates and sovereigns to pile up debt.”
“The main question now is: How can we curb the growth of debt so that we can achieve sustainable stability? It must be clear from the beginning that stability is a public good. This means that, while the economy as a whole is better oﬀ in a low leverage environment, each market player has an incentive to deviate and add up leverage. But if everyone does the same, the economy stagnates and becomes susceptible to ﬁnancial turmoil. It is a standard “fallacy of composition” problem. This means that curbing debt must be a collective endeavor. This is why the Basel Committee had to issue a new set of standards to make the banking sector more robust and resilient. To move from a high-debt to a low-debt environment requires a set of policies and regulations that encourage risk-sharing and participatory ﬁnancing,” Dr. Sami Al-Suwailem added further.
The first day of the conference also witnessed the Top Guru CEOs from the World’s largest Islamic Banking Assets Banks at the CEO’s Power Table – Steve Bertamini, Chief Executive Officer, Al Rajhi Bank; Dr. Adnan Chilwan, Group Chief Executive Officer, Dubai Islamic Bank; Mazin Al-Nahedh, Group Chief Executive Officer, Kuwait Finance House; Mazin Manna, Group Chief Executive Officer, Abu Dhabi Islamic Bank.
Dr. Adnan Chilwan, Group Chief Executive Officer, Dubai Islamic Bank said, “In its 26th year, WIBC continues to bring forth industry leading thought leadership and perspectives towards the progress of the broader financial industry in a time where advancements in technology and regulations are critical for the success of all key stakeholders. I feel that traditions should not be treated as shackles. They should not restrict you from moving forward. Rather, they should serve as a platform for the next transformation. Banking stands at a crossroads today. The leaders of financial institutions in this highly dynamic and progressive world have to make the key decision now – to remain relevant to the demands of the customers or disappear. We are competing not just with entities within the sector but ambitious institutions from outside the traditional boundaries. So, it’s time to continuously be a part of the customers’ life – simple as that. Banking 2.0 (or Lifestyle Banking) is the only way forward.”
Another key highlight of the conference was the Regulator’s Power Table focusing on New Markets & Harmonization of Global Islamic Finance Standards with Panelists – Khalid Hamad Abdul – Rahman Hamad, Executive Director of Banking Supervision, Central Bank of Bahrain (CBB); Suhaeidi, Executive Director, Department of Islamic Economic and Finance, Bank Indonesia; Farah Jaafar-Crossby, Chief Executive Officer, Labuan IBFC; Dr. Qais Al Yahyaei, Executive Vice President, Central Bank of Oman; Taliya Minullina, Chief Executive Officer, Tatarstan Investment Development Agency.
Farah Jaafar-Crossby, Chief Executive Officer, Labuan IBFC discussed the perspective of harmonization of standards from the perspective of an international business and financial centre which aims to facilitate the growth, acceptability and cost efficiency of Islamic financial services, both in Islamic countries and beyond. She also invited all the delegates present to Kuala Lumpur in 2020, when Labuan International Business and Financial Centre will act as a Strategic Partner to the 8th Edition of WIBC Asia will be hosted between 29-30th June. The jurisdiction, is home to the world’s first USD denominated exchangeable SUKUK and is keen to ensure Malaysia’s position as a leader in Islamic financial services is further entrenched with the hosting of WIBC Asia 2020.
Other key highlights from the day include the Presentation on Global Economic Outlook by Dr Jihad Azour, Director – Middle East & Central Asia Department, International Monetary Fund, Panel Discussions focusing on New Markets & Harmonization of Global Islamic Finance Standard, Digital Transformation: New Trends in Fintech, and Value Creation via M&A. Leading industry experts analyzed the challenges at hand and focused on coming up with effective suggestions with the ultimate aim of developing a convergence roadmap for the Islamic Finance industry at large.
Dr Jihad Azour, Director – Middle East & Central Asia Department, International Monetary Fund laid emphasis on the global headwinds being on the rise with lower growth and rising uncertainty, volatile and low oil prices, geopolitical risk and social unrest. He suggested it is time to address fiscal vulnerabilities – Resume gradual consolidation in OEs and ensuring debt sustainability in OIs.
The 26th WIBC shall also recognize excellence within the Islamic finance and banking industry at a high profile Gala Dinner on December 3rd whereby WIBC Performance Awards shall be presented by Adnan Ahmed Yousif, Chairman, Bahrain Association of Banks (BAB), President & Chief Executive, Al Baraka Banking Group to the top performing Islamic financial institutions based on their performance in the WIBC Leaderboard – a groundbreaking performance assessment tool aimed at enabling Islamic financial institutions to benchmark their performance against their peers.
Key highlights to look forward to tomorrow include: Presentation on Economic Cooperation & Connectivity, Panel discussions on the Objectives of Shari’ah and Islamic Finance, Sustainable Finance & Corporate Social Responsibility, Islamic Economy – Opportunities & Working Models, SMEs & Financial Inclusion, and Sukuk Market.
Partners at The 26th WIBC include: Kuwait Finance House, Ithmaar Bank, Khaleeji Commercial Bank (KHCB), Bank ABC Islamic, Bahrain Islamic Bank (BisB), First Energy Bank, Al Baraka Banking Group, GFH Financial Group, AAOIFI, The Perth Mint, Moody’s Investors Service, Bank Islam Brunei Darussalam (BIBD), Eiger Trading, DDCAP Group, Keypoint, FitchRatings, Tejoury, GPS, Sadad, Directorate of International Programmes, ANO, IMTF and Mazars. Supporting Partners: Bahrain Association of Banks & Arab Bankers Association, Official PR Partner: TRACCS.