Finance & Banking



Islamic finance is a growing industry with a global presence that is increasing with time, especially in these uncertain economic times. Like any other industry, Islamic finance also requires standardised education and research, to develop a workforce that can stimulate economic growth parallel to the conventional system. Last year, the number of Islamic finance education providers globally was 968, out of which 371 were degree providers while 445 only provided certain courses. According to Statista 2020, Indonesia had the highest number of Islamic finance education providers, followed by the UK and Malaysia.

However, there is a discrepancy in the specialisations offered and the need of the industry. 90% of the degree programmes offered in the discipline of Islamic finance are focused on Islamic economics, auditing or Islamic law, with little or no focus in areas of Islamic asset management, Islamic alternative investments and Islamic insurance (takaful), and actuarial practices. Even though the scope of Islamic finance is gaining prominence, a downward trend has been spotted as many universities have removed such degrees and courses due to lack of demand. This is an alarming situation as it reflects non-interest and lack of awareness among the general public, especially the youth who are opting for other disciplines instead.

In the current situation, Islamic finance has become the need of the time, but we still require qualified professionals and skilled human resource to grow the industry to compete with the conventional banking and finance industry. The new age of digitalisation and Fintech is good news for the industry and is already attracting attention from bankers, finance professionals, investors and consumers. Islamic Fintech is a new sun on the horizon that can stimulate growth and create new markets and economy, but we need a new education system for it as well.

The Forbes Magazine stated that “the future of Islamic FinTech is bright”. We asked a number of finance professionals and educators their opinions on developing a digitalised qualification for the Islamic finance industry.

Chief Technical Officer
Finance Accreditation Agency

In tandem with the rapid growth and changing landscape of the financial services industry (FSI), one needs to be constantly equipped with current knowledge and the competencies required. This means that one must constantly be trained, open to learn new things and be able to bring them back for practice at the workplace.

Capacity building has been a part and parcel of individuals involved in the FSI. Traditionally, many training and development programmes have been offered through conventional, face-toface means. Although the online mode has been talked about for some time as the ‘new norm’, it has been slow to gain wide recognition, until the COVID-19 pandemic hit us.

The pandemic has provided us with the opportunity to develop technology-driven Islamic finance qualifications. Whilst technology plays an important role, it should be viewed as an enabler to the effective delivery of content in Islamic finance. This requires training providers to think of learning outcomes, curriculum, planning for delivery, materials, the learning experience and assessments, which works cyclically.

There is already an established body of knowledge of professional qualifications in Islamic finance. The Islamic Finance Professional Qualifications Structure (IFPQS) developed by the Finance Accreditation Agency (FAA) can be used to design and develop the e-content of Islamic finance qualifications. The IFPQS, being a globally benchmarked learning structure, was built around the Finance Qualifications Structure, a six-level competency-based qualifications structure,
enabling Islamic finance qualifications to be developed at the basic, intermediate or advanced levels with the associated learning outcomes.
The IFPQS provides guidance on the minimum level of knowledge required by any Islamic finance professional, whilst training providers in different jurisdictions can contextualise some of the content to their specific needs. This ensures
consistency where the core learning areas are covered, facilitating recognition of these qualifications across borders.

Equally important is its delivery. Delivering an Islamic finance learning programme online requires both asynchronous and synchronous activities. Accordingly, the participants are given reading materials and assignments in advance through the learning management system (asynchronous) before the interactive session takes place (synchronous). This is followed by assessments (such as assignments, projects and tests), done either asynchronously or synchronously. Experts have suggested that both the asynchronous and synchronous activities been given equal emphasis. Acknowledging the importance of such planning, the FAA has developed e-learning guidelines to guide training providers in designing, developing and delivering learning programmes online effectively.

Thanks to technology, there are now an increasing number of tools available, which could be used to design e-materials and facilitate online delivery, such as Google Jamboard, Twiddla, Loom, YouTube Studio, Perusall, Padlet and even the recording function on Microsoft PowerPoint. There are also tools to design and facilitate online assessments such as Geniusscan and Gradescope, as well as browser lockers such as Respondus and Examity, to name some.

The major challenge, however, lies in the effective delivery of the content online to ensure the desired learning experience, with effective engagement of the learners. This is a very critical aspect that should not be neglected for
any Islamic finance programme to achieve the intended learning outcomes. For this, the FAA has recently launched the e-Certified Training Professional programme, which in part aims to enable participants in learning how to engage their learners in online delivery.

Another core feature of IFPQS lies in its flexibility where the structure can be used to develop qualifications, certifications or even short courses. With micro-credentials gaining traction all over the world, thanks to technology,
bite-size Islamic finance qualifications can be developed by referring to the IFPQS.

As quality and consistency of these qualifications need to be safeguarded, FAA can support Islamic finance education and training providers to quality-assure these qualifications to ensure alignment of the learning outcomes, teaching
and learning, and assessment and competencies. FAA can also serve to connect these providers to enable competency-based curriculum to be designed and delivered for the general good of the FSI. With technology, the training and development landscape will not be the same again, where exciting experiences await us.

Chief Executive Officer
Pointcentive Ltd.

COVID-19 is definitely here to stay and has been one of the biggest accelerators towards digital adoption by both the public & private sectors, and education and training sectors are no exception. The widespread use of digital technology in learning and development is the only way forward.

As an advisor on Islamic banking to the Bahrain Institute of Banking and Finance, the Central Bank of Bahrain’s training arm, I know the phenomenal work that is done to develop e-learning capabilities with their strategy geared towards innovation. They are the oldest Islamic finance professional qualifications provider and have an impressive e-Learning portal offering digital courses like; Intro to Islamic Banking, Islamic Capital Markets, etc.

BIBF has exclusively partnered with AAOIFI to bring all Shari’a Standards onto e-Learning, including animated explanations, selfassessments, case studies, and supplementary reading of fifty-four (54) Shari’a Standards. The
Shari’a Standards were launched online in 2017, developed in-house by the Centre’s e-Learning Unit. They have an agreement with the IFSB pertaining to e-Learning. Furthermore, BIBF has launched virtual training that can be delivered
live anywhere in the world. In 2018, the Centre launched the first-ever Islamic banking e-simulation training, which gamifies an Islamic bank’s workings on a computer.

The future for Islamic finance training relies on partnerships with Islamic financial institutions and training institutions to bring in applied learning rather than the theoretical aspects. The challenge is to ensure that the content is relevant, and ideally, the trainers be practitioners or ex-industry people.

The Islamic finance qualification should use skills, knowledge and practical application methodology to map training objectives, first to a blended model (in-class vs. online) and then to the digital learning environment tools. Integrated
virtual learning environment’s implementation with tools for social learning tools has allowed for professional development, best practices sharing, and created knowledge communities. Learning is fundamentally a social phenomenon.

To quickly close the skill and knowledge gaps, the platform should use microlearning, brevity, bitesized modules, short text and phrases, images (illustrations), animations, videos, short snippets of speech, tests and quizzes, and games (e.g., simple single-screen challenges). Microlearning is more engaging, flexible, boosts knowledge
retention, is cheaper and faster to produce over regular eLearning, and is less time-consuming. It is beneficial for corporate and commercial training needs, especially for busy professionals who can only study in short stints.

Augmented reality and the use of holograms have many potentials that cannot be ignored. With 3D hologram, one can pinch, zoom and rotate the equipment related to the course. I read about MIT’s shapeshifting display that allows users in one place to interact with 3D versions of objects in a different location. It can render 3D content physically so that users can interact with digital information tangibly. The Islamic finance training providers can also look into the use of such technologies to enhance the learning experience.

Overall the Islamic Finance Qualification 2.0 should focus on skilling, upskilling, and reskilling, while the use of cutting-edge technologies should not be ignored.

Chief Operating Officer
TAIF Digital Institute for Islamic Finance

Who would have thought that the COVID-19 pandemic would turn out to be a blessing in disguise for the education industry?

We knew the Islamic Finance Industry (IFI) was rapidly shifting even before the COVID-19 pandemic. Now, with the world turned on its head, IFI’s must adjust for the workforce of the future. We all are witnessing that job roles are changing, and there is now a growing need for upskilling and reskilling technically and socially. Organisations and academic institutions are forced to rethink ways to operate differently and we see a high demand in the use of digital tools to carry out the work task.

With e-Learning on acceleration and digital adaption rate increasing, organisations are turning their attention inward to prepare their workforce for an unpredictable future by introducing technological courses to train and upskill their employees. It is expected that e-Learning will reach up to USD375 billion by 2025 with a 8% CAGR or growth rate. As such, Islamic finance studies should not let go of the opportunity and quickly jump on the bandwagon.

We also see government initiatives to introduce Islamic ‘Digital Economy’ to help accelerate Islamic assets growth. Such Islamic finance qualifications will also help to support these initiatives practically.

Challenges Faced by the Islamic Finance Industry Before we dig into the nitty-gritty of why a technologically-driven Islamic finance qualification is necessary, lets recap on the challenges faced by the industry and how tech can help solve them. I had the privilege to led various international operations for one of the largest International Islamic banks in various geographies and the biggest challenge I faced was finding the right talent!

Transformation of the Islamic Finance Education Industry is Required

As per the ICD (Islamic Corporation for the Development of the Private Sector) report, there are a total of 968+ Islamic finance education providers around the world but we see a lack of cooperation between Islamic finance academia
and the industry across the globe. Consequently, the growth of Islamic finance professionals and technology adoption in the industry didn’t keep pace, for example, according to AIMs, 80,000 professionals are currently needed in the industry while the number of graduates is only 5,000 per annum, which is more than 16x short of the current industry requirements.

FinTech Driving the New Business Model

The other dimension that is significantly becoming more and more important for our industry is the integration of fintech into IFI’s operating models, as this will ensure that more practical and ‘future proof’ training is provided. We must collaborate more and shift towards digital learning, webinars, asynchronous e-Learning courses, practical
example videos recorded to offer more flexibility for both trainers and learners. Collectively, we must address the challenges mentioned above for a more inclusive growth.

Preparing our Islamic Finance Workforce to Succeed in The New World of Work Deloitte reported, “Forces of change are affecting three major dimensions of work: the work itself, who does the work and where the work is done.” To properly conceptualise the future of work, it’s best to consider the holistic impact of globalisation, tech advancement and economics. As per PwC research, more than half of the CEOs understand there is a need to develop “key skills” to innovate effectively. The Islamic finance institution can prepare for change and digital adaption by “encouraging a mindset” of continuous learning and experimentation in the workforce. The future of work may be uncertain, but learning can provide a road map to guide IFI’s through the new terrain

The Future is Technology-Driven Islamic Finance Qualification

I think the above-mentioned stats and parameters prove that a technology-driven Islamic finance education is the only solution in addressing the myriad of challenges the industry is currently facing.


Through a collaborative technological programme, learners can gain on-the-job experience, and practical knowledge and skillset. By introducing the Islamic financial technology qualification programme with cutting-edge training on FinTech application areas such as basic retail banking (home financing, deposits or CASA), microfinance, payments systems, financial management, SME and corporate banking, investment banking and Sukuks, Takaful (bancassurance), commodities and even Islamic digital currencies*, we can ensure that we are able to produce the required ‘future ready’ human capital to contribute towards the growth of the Islamic digital economy.

The Curriculum

An ideal technology-driven Islamic finance qualification course must cover:
• Fintech disruptions, open banking and incubators
• Regulatory & Shari’a governance framework for Fintech
• Understanding the impact and the applications of AI, machine learning, cryptocurrency and blockchain technologies on the Islamic financial services industry

• Future of the Islamic neo banking and digital financing
• Blockchain technologies and applications for Waqf, microfinance or P2P payments
• Business operations transformation including customer acquisition, product development life cycle & compliance functions
• Real-world cases of Islamic Fintech and their impact on the financial services industry including risk management and cybersecurity.

We all need to come together and work in tandem if we are to develop a globally recognised and high-quality technology-driven Islamic finance qualification, one that works to introduce Islamic finance to the masses. TAIF Digital Institute of Islamic Finance is rolling out the first of its kind Islamic Fintech course this year to address this gap.

Islamic Finance Consultant

A quite relevant question indeed, especially as we are moving through the pandemic. Even before the COVID-19 affected our lives, we were already witnessing EdTech disruptions around us. The rise of MOOC platforms like Edx, Coursera and Udemy on the course delivery side, Credly in degree authentication, Kahoot in game-based tech ventures like Quizlet, Kidaptive, KidSense, and Querium are using artificial intelligence to improve education. Elite universities are embarking on the MOOC platforms to offer selected courses and have already launched hybrid programmes to address the new realities.

EdTech is an interesting area. In 2019 alone, the venture capital industry invested an estimated USD7 billion in EdTech. When we broadly include learning technology suppliers as well, we see global private investments reaching up to USD18.7 billion during the same period.

Islamic finance training has seen rapid growth in terms of number of educational or training institutions and the programmes or courses they are offering. It is indeed a good sign but some key issues remain unsolved. This is a fragmented market in terms of quality and coverage of required training areas. We see an oversupply of basic training courses, whereas specialised areas do not receive adequate attention. Not everyone offering training programmes follow global best practices in teaching and training. Moreover, even available technology solutions are not widely used, which can extend the reach and make training more effective.

EdTech opens up opportunities for experimentation, explanation, and dissemination of complex ideas. It increases the reach of quality education and enables cost reduction in the overall education delivery

What we experienced during the COVID-19 pandemic was an immediate shift of teaching educational and corporate trainings are all such examples.

Similarly, there are start-ups like Labster and Interplay Learning that make use of immersive technologies in lab and trade skill trainings. High from in-class to digital through Zoom or similar applications. It so happened that no institution was ready for such a sudden change, as they had not worked on designing a suitable curriculum for online teaching, assessments and other areas. Also, only communication platforms cannot fully unlock the potential of educational technologies.

In the post COVID-19, we will have the time and liberty to experiment and choose from among the burgeoning EdTech solutions that meet the training institutions’ specific needs. This is important in developing a globally recognised Islamic finance qualification.

Another important element to understand is the rise of platforms. Today all tech giants run and operate on platform models. During the pandemic, models such as Google G-Suite have been tested and proved successful. Strategically
it would be a wise decision to make use of this business model for developing a tech-based Islamic finance programme.

Endorsements and affiliations with trade associations create a lasting lock-in effect for professional qualifications. This comes with embedded recognition and acceptability. If we are offering an online qualification, in continuation with an old product-based model, trade associations or renowned universities can prove good partners. A similar example of partnership is the AAOIFI’s professional qualification. The programme was a well-conceived idea; however, AAOIFI did not have many training affiliations. In recent years, they have signed up partnerships with various institutions, resulting in a noticeable rise in the number of candidates.

Celebrated entrepreneurs like Elon Musk support the idea of skills-based learning. Similarly, Google has recently announced its short-term skill based trainings, which will be preferred over university degrees for hiring new employees. New digitally enabled Islamic finance qualification can be more skills-based and practical than prevalent theorybased education. Various tracks or modules targeting different functions in Islamic financial institutions may fulfill their specific needs. Such modules should make of artificial intelligence and virtual/augmented technologies solutions already available in the EdTech space.

DR AREEBA KHAN Independent Research Analyst

Education and training are undoubtedly going through a crisis period. The education system has witnessed changes in the past decades too, but the changes that came forth in the 6-8 months’ span of the pandemic are incomparable with the rest. The education sector has to adapt to technological changes as well, since Artificial Intelligence, Blockchain and Virtual reality are already in use on a day to day basis in the corporate sector.

During the pandemic, nations and institutes are making efforts in utilising remote learning, distance education and online learning. The process of learning has been interrupted by this pandemic, however institutes over the world
have to get back to the classrooms in some form or the other. Some nations have already started reopening institutes by following strict SOPs. This pandemic has made societies adapt to digital technologies for studies and assisted in upgrading the education system. But to get the most out of it the students as well as the faculties have to make certain adjustments, as most of them are not aware of the tools and technology used.

Islamic finance education has stirred interest among scholars all over the world especially after their performance during the global financial crisis. Muslims as well as non-muslims are keen to learn more about Islamic finance. This pandemic has forced many universities and educational institutes even the Islamic financial institutes to make tremendous efforts to continue education through online platforms. They have also provided training to their students digitally. The Cambridge Institute of Islamic Finance also adopted digital technology for delivering the different lecture
series of the Cambridge Islamic Finance Access Programme. During the COVID times this programme was available free of cost for the candidates. This has made learning experiences accessible for individuals living in countries where education about Islamic finance is not provided. IRTI has also been delivering training face to face as well as through distance learning mode. In 2015, IRTI adopted the massive open online courses (MOOCs) in Islamic economics, banking and finance through different online learning platforms. IRTI has offered eight free online courses through edX during the pandemic.

Post-COVID, the Islamic finance institutes have to change the mode of learning. The change in flow via digital technologies can be done by creating, utilising and curating knowledge content. These programmes should also utilise technology to assist not only the students but also teachers, trainers and practitioners. The classrooms postCOVID should utilise AI, Blockchain and Fintech to assist teachers and learners. This will help them build skills, abilities and knowledge about digital technologies.


Let us consider the S&P Dow-Jones Shari’a screening, which has the following financial screens:

  1. Total debt divided by market capitalisation ≤ 33%
  2. Cash plus interest-bearing securities divided by market capitalisation ≤ 33%
  3. Accounts receivables divided by market capitalisation ≤ 33%
  4. Non-permissible income other than interest income divided by total revenue ≤ 5%
    Now let us consider a hypothetical example depicted in the Figure below.

A company is set up with a paid-up capital of USD2 billion, which is kept in a bank account. Before starting any business, the company is floated on a stock exchange with the issuance of 2 billion stocks of USD1 each. The issuance is fully subscribed and the additional USD2 billion is also kept in a bank account (total cash of USD4 billion). Subsequent to this if the secondary market trading starts and the company’s stocks go up in price to, say, USD1.25, is it Shari’a-compliant to trade in this stock?

Obviously, the answer would be NO, as the second screen will be in breach [USD4 billion / USD2.5 billion = 160%].

Now, if the company starts a financing business whereby it offers Shari’a-compliant home financing based on Murabaha,

what would be the view on the trading in stocks of such a company?

Suppose the company uses USD2 billion to offer home financing and uses the remaining USD 2 billion to invest in Sukuk al-Ijara. It would have the following assets:
Sukuk al-Ijara: USD2 billion

Murabaha Receivables: USD4.16 billion1

Is it still impermissible to trade in the stocks of the company on a price of USD1.25 per share?

The first screen remains irrelevant to this simple example.

The second screen will give a numerical value of 80% [USD2 billion / USD2.5 billion], which may imply that the company will be in breach. But actually, this isn’t the case, as the company doesn’t have any cash any more but rather
has invested in Sukuk al-Ijara. The second screen will yield a value of zero, and the company will not be in breach.

The third screen will yield a value of 166.31%, which implies a Shari’a breach.

Hence, it will not be acceptable to trade in the stocks of this company for a premium or discount.

If, however, the company offered home financing on the basis of Diminishing Musharaka and held the titles of the properties (financed), then the amount of receivables will be only USD2.16 billion, and the third screen will have a value of 86.4%, still higher than the 49% threshold.

The above discussion alludes to an important point.

Those who advocate for more use of asset-backed financing in Islamic banking and finance, can insist on the strict application of Shari’a screens even in the case of Islamic banks and financial institutions. The close scrutiny of the financials of listed Islamic banks and other financial institutions may reveal that they do not fulfil Shari’a requirements for trading in stocks.

If S&P Dow Jones Shari’a screening methodology is applied in letter and spirit, DIB’s stock isn’t Shari’a-compliant, at least for trading, if not investing and holding. This is a limitation of the S&P Dow Jones’s and other Shari’a screening
methodologies. This necessitates revisiting the approach taken for Shari’a screening of listed stocks and shares.

One simple approach could be just looking into the prohibition of interest and ignoring other aspects like liquidity
and trading in debt. This approach could involve applying the following two simple screens:

• Interest receipts divided by total revenue ≤ 5%
• Interest payments divided by total expenses ≤ 5%

This should filter out the Shari’a repugnant businesses if it is applied along with the sectoral/business screen.

Are we ready to rebook an approach we have taken anyway as a second-best solution, which has been used for over two decades with, admittedly, limited success?

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