Internationalisation of Islamic Wealth Management

Given that the total size of the global Islamic financial services industry is no more than US$2 trillion, a major chunk of the Islamic wealth is still outside the domain of Shari’a compliant banking and finance. This is a main reason that Islamic private banking has been slow in emergence and development. Setting up of full-fledged Islamic private banks, e.g., Faisal Private Bank in Geneva, has not been successful. Similarly, private wealth management departments of a number of Islamic banks around the world have not been entirely successful. Having said that, the premier banking services offered by Islamic banks to the mass affluent segment of the industry are popular and growing in size and AUM.

Although relatively underdeveloped as compared with other sub-sectors in IBF, IWM has tremendous potential for growth. The current situation of limited supply of IWM products driven can be changed by product innovation and development, expansion of markets and investor base, strengthening of the supporting infrastructure, and generating greater level of confidence.

The effectiveness of these growth drivers, nevertheless, is premised on the industry achieving further internationalisation that is well entrenched and sustainable, which in turn, requires concerted and conscientious efforts and collaboration among the interested parties across the various jurisdictions to create an enabling environment within which cross-border selling of IWM products can truly flourish. It is therefore incumbent upon all stakeholders in the Islamic finance industry in general, and Islamic asset management industry in particular, to contribute towards realisation of this common objective.

This is an abstract of a chapter on “Islamic Wealth Management in a Global Context”. The full chapter can be accessed in the Islamic Wealth Management Report 2016. Please contact to purchase the report.

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