Islamic Finance: The Third Wave
APPROACHES TO TRAINING IN ISLAMIC FINANCE

Human development in Islamic finance is as critical as other parts of the anatomy of Islamic finance. It is not an exaggeration to state that human development stands at the pinnacle of Islamic finance. Human capital development which is part of total development requires a unique perspective of Islamic finance that embarks on a paradigm shift from loanable capital to productive capital and impersonal lenders to financiers who are concerned for human development. Training of personnel in Islamic Finance would require a comprehensive, systematic and goal directed approach which is discussed in this article.

There have been many approaches in developing human capital for Islamic finance. Some take the forms of seminars and conferences. In this context many seminars and conferences have been organized to cover either the wide-range of issues or one dedicated issue or theme in one particular event. Seminar and conferences are, relatively speaking, ideal for well-established personnel in Islamic finance. Beginners would normally find themselves “lost” if not “confused” in such programmes.

On the other hand, trainings have also been designed in the form of workshops either meant for open market or exclusively for “in-house” participants. Unlike seminar, workshop adopts a bottom-up approach in building the blocks of knowledge. Efforts in line with this approach are still lacking. Furthermore the availability of well resourced documented materials or study guide for the participants are lacking. In short, a module of high quality content and delivery skill as well as clear-cut learning outcome is very much lacking. Existing workshop handouts are not adequate for self learning and professional development if these benchmarked against other professional training modules such as CFA and ACCA.

Some universities and colleges, offer rigorous academic programmes on Islamic Finance with a view of preparing graduates for the industry. Courses in this regard would lead to either Diploma or MBA specializing in Islamic finance. To-date, a programme at Doctorate level is not visible. A MBA and Doctoral programme, would be meaningful if theoretical constructs and propositions could relate and address existing problems and challenges as well as shape the future policy and direction of Islamic finance. Nevertheless, by any standard, enrollment in these courses would be both challenging and rewarding as the examination (plus dissertation in some cases) would really prepare the students for substantive learning and contribution in the respective field.

Having said this and that, it has been observed that training in Islamic finance lacks three dimensions. The first dimension is a programme that should lead to a kind of certification by accredited certifying body in Islamic finance industry. It is a known fact that Shari’ah scholars, accountants, auditors and perhaps lawyers must be certified to undertake Shari’ah financial activities and services to provide confidence and comfort to the public. The same equally applies to financial planner, actuary, investment banker, fund manager and those in related field. If certification proper is not currently available for reason known by the industry then best practices or standards need to be determined or formulated to be taught in courses or modules with or without an examination to advance human capital development in Islamic Finance. Training in this respect is almost absent or negligible. The support of the regulators and other supervisory bodies in instituting such training requirements is certainly pertinent for the development of such programs. Certification does not work in isolation of regulatory framework and reporting environment.

The second dimension is the CPE or Continued Professional Education which is already established in many developed markets either in capital market, banking or accountancy. The Islamic finance CPE is equally needed to fill the vacuum for continuous professional development. Each and every practitioner in Islamic finance must accumulate his or her CPE points every year to maintain his or her license in respective area of expertise in Islamic finance industry. This category includes fund manager, compliance officer, member of investment committee and board of directors, etc. The idea of certification and CPE is value enhancement and allows for systematic and consistent development of accepted practices. Furthermore a top-down and regulated approach would compliment other training courses which are bottom-up and self regulated.

The third dimension is the academic programme which is customized towards executive. Executive programme, unlike academic programme, would offer not only a more hands-on syllabus, but also, more importantly, the flexibility in attending classes, undertaking assignments and taking the ‘assessment’. Assignments and group presentation are deemed more effective than written examination as far as working students are concerned. Learning process rather than learning outcome driven is a hall mark of life long learning in professional education.

The success of training in Islamic Finance, at the end of the day, would depend on regulators, quality of syllabus, quality of resource persons and the flexibility of the programme to suit the ‘students’. In terms of its viability and growth in congruent with national goals and industry objectives, recognition by the industry in terms of employment as well as consultancy/investment opportunities as well as accreditation by government and regulatory bodies or agencies are integral to motivate those who walk the extra mile to equip oneself with additional in-depth knowledge or certification.

Dr. Mohd Daud Bakar
President/ CEO
International Institute of Islamic Finance Inc.
(mdaud@iiif-inc.com)

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