57306
Iran Key to Islamic Banking Outreach
Iran Key to Islamic Banking Outreach

Iran Key to Islamic Banking Outreach

Iran Key to Islamic Banking Outreach

For Islamic banking, the opening up of Iran is a huge development, as Iranian banks make up the world’s largest financial system based on Islamic law, with Islamic banking assets totaling $500 billion.
 A large number of sukuk and other Islamic securities from Iran are expected over the next few years. Estimations are that there are over 150 Iranian companies considering Islamic sukuk sales.
Iran also requires funds for its infrastructure development programs estimated at around $1 trillion over the next decade, according to a report published by Forbes.
Industry projections for Islamic banking are generally positive, driven by the significant unmet demand, despite the prevailing macroeconomic and political challenges across the region.
Credit expansion in the region has been impacted by the low oil price, although Islamic financing has continued to grow. Key public sector corporations and private real-estate developers have considerable appetite for Islamic financing both at bank and capital market levels. Retail banking will continue to expand aided by technology developments and, on the wholesale front, large-scale corporate financing, project finance and debt capital market deals also represent growth opportunities.
In the past, Islamic banks were lagging behind their conventional banking counterparts in terms of innovation, technology and service, which are not only important to defend market franchises but also crucial as a differentiator in a competitive market environment.
However, many banking entities in the Persian Gulf and the Middle East, which have performed well over the last few years, have become early investors in technology, targeting product and service innovation as a central theme of their strategy. Technology is changing rapidly in the banking sector and the intermediary link between institutions and customers has become less direct as other non-bank players enter the market.
Product innovation and the increasing use of mobile banking and apps are helping Islamic banks in the region to widen their reach to customers, particularly those that were previously un-banked or under-serviced.
Technology and product innovation is removing the service and delivery distinction that was present in the past between Islamic and conventional banks. Increasing product launches for Islamic banks are providing customers with a wider range of financing solutions that were previously not available, forcing some to turn to conventional banking when otherwise they would not. This is helping to support growth in the sector.
Islamic banks in the region are building their activities in key sectors of the economy. Retail banking has traditionally been the mainstay of Islamic banking in the region. Here, investment in digital and smartphone banking will be crucial in future.
In the region, attitudes and expectations have changed at a rapid speed due to a young population that is increasingly mobile and has greater access to media and technologies.
According to Ernst & Young, the boards of most of the important Islamic banks in the region have been generous in sanctioning spending on digital initiatives—between $15 million and $50 million over the next three years—well aware that inaction could cost up to 50% of their retail banking profit in the next few years.
Another major development for Islamic banks in the region is the flurry of capital increases, with Islamic banks building their capital and liquidity bases for Basel III purposes and to support future growth.

 

Short URL : https://goo.gl/Tbt6KZ
  1. https://goo.gl/WpFci2
  • https://goo.gl/sTmT1h
  • https://goo.gl/Kc2C5C
  • https://goo.gl/jjxE4E
  • https://goo.gl/FBZfcS

You can also read ...

BMW’s Tech-Stuffed Concept SUV Heralds Fancy, Electric Future
Changing notions of what customers want from cars have pushed...
Tesla Hits New Speed Bump
Tesla Inc’s Chief Executive Officer Elon Musk on Sunday...
Oil & Gas Sector Most Conducive for Business
The research arm of Iran’s Parliament has conducted a first-of...
3 CBI Officials  to Leave
Following the recent passage of the law banning the employment...
CBA Concerned About Forex Outflow to Iran
The Central Bank of Afghanistan raised concerns about the...
Mineral Trade Surplus Hits $2.9b
Iran exported more than 25.47 million tons of mineral products...
Anzali Port to Be Connected to National Railroad
Anzali Port in the northern Gilan Province will be connected,...
Departure Tax Revenues  Up 117 Percent
The government earned 3 trillion rials ($24 million) from...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus