www.cpifinancial.net26 Islamic Business & Finance | ISSUE 80

IT

Ismail Ali, Director of Marketing and Product Strategies for International Turnkey Systems (ITS), spoke to Islamic Business & Finance about completing the product offerings to Islamic banks

Filling in the gaps

International Turnkey Systems - ITS, a leading integrated information technology solutions and software services

provider, offers world class quality IT solutions and services that enable large, as well as small to medium organisations to keep up to date with the fast evolving competitive business environment. As technology pioneers with 34 years of experience in the Middle East, ITS has a long, proven and successful track record.

ITS has developed a mix of products and solutions that meet Islamic banking needs, and are in full compliance with Shari’ah requirements. Ismail Ali told us about cornering new markets and picking up where other solution providers leave off.

How has ITS progressed its Islamic offerings over the last 12 months?Over the last one and a half years we have been changing our strategy. We realised that some of the solution

providers do not provide full coverage for Islamic banks. Most of the banks have a technology solution but a big amount of their work still needs to be done manually, or it consumes a lot of resources. Effective and efficient operations are crucial for banks, banks are looking at reducing operational risk, new positioning and better operating margins. ITS adopted a strategy that meets banks, demands, We offer a modular-based solution that solves operational pains, provides accurate results while maintaining low TCO. ETHIX financial solutions capitalise on the current banks’ IT investment and infrastructure.

In the coming two quarters we will launch a new product completely based on mobility"

www.cpifinancial.net 27ISSUE 80 | Islamic Business & Finance

IT

For them, we reduce the cost of ownership by offering a full solution for a specific area of Islamic banking. For example, Al Hilal Bank, which wasn’t one of our clients at the time but now works with us, used to have a big issue related to profit calculation and distribution, which is a main function of Islamic banking, so we made a deal with them and implemented our components for profit distribution and allocation, which has reduced operational time and increased accuracy. We have been repeating the same model with many other banks. We have the same deal with Ajman Bank. We are mainly focussing on helping Islamic banks increase efficiency by offering them real technology that helps them to enhance their operations.

How do an Islamic bank’s IT needs differ from a conventional bank’s? There are large areas they have in common when it comes to the technology side, as well as reporting to the Central Bank in some areas. The main issue the Islamic banks are facing from a technology point of view is the complication of providing finance in a completely automated fashion. Many solution providers offer Islamic banking, but deal with specific client requirements. They are offering Islamic banking solutions to Bank A, and they amend the solution to accommodate banking requirements, operational mandates and Shari’ah board requirements. They offer an amended solution for Bank B – or they convince Bank B to make some of the work manual. What we do in ITS, because we are focussing on the Islamic banking side, is provide the bank with a range of tools which helps a bank refine its own solution, so the bank doesn’t need to go back to ITS to define new products or services. That is the main difference that enables us to get our additional Islamic components to run

alongside any other solution provider, which helps the bank take control of its own technology.

What are your initiatives for the next 12 months?When we look at our roadmap which is derived from the challenges that are faced by the financial industry, there are two main elements: one is purely Islamic business functionality, and the other is related to technology trends and how this will help the banks. So when we look at the banks, we are mainly looking for the strategies they acquire to increase profitability or productivity. From a technology point of view, we realise that all the Islamic banks are going into mobility, cloud and CRM. The mobility landscape is like the internet landscape decades ago,

however in the coming period mobility will change business conduct. In the coming two quarters we will launch a new product completely based on mobility . This would help the banks to offer Islamic banking products and services on the run. Customers’ behaviour would change; banking will be something to do, anywhere, anytime using mobile phone or tablet. In operational efficiency, CRM plays a significant role. To be utilised efficiently, CRM has to be incorporated into the existing solutions, not just an additional single technology component to be added. ETHIX is introducing incorporated CRM business functionalities that would help financial institutions enhance their operation, increase revenue by up-selling additional products and services to their clients.

Which geographies are experiencing the highest demand?When we look at Islamic banking, of course the GCC area still has a lot of requirements. Not in terms of new banks, but in terms of maturing the industry; they are looking to enhance their operations in areas such as mobility. When it comes to the other areas we consider North Africa, where the Arab Spring has been, a high demand area mainly related to converting banks from conventional to Islamic. This is one of the advantages of ITS – I can claim it is the only vendor that has been into this cycle. We have converted banks from conventional to Islamic in Egypt and Kuwait, amongst other places. This is another segment of Islamic banking, and this has started to boom in countries such as Libya.

It was booming in Egypt until the current turmoil. Other regions which are experiencing high demand are African regions; some of the central banks in Africa have already changed regulations to accommodate Islamic banks. It varies from some countries such as Serbia where they have windows to countries which have full-fledged Islamic banks. It is opening a new market for us. Asia Pacific, specifically Malaysia and Indonesia are well-developed markets. Islamic banking has been up and running for many years there. Their demand is not just to accommodate basic Islamic functions as in Africa – they are looking how to better services and retain customers. There, it is much more about how to engineer and launch new products in a timely manner.

We realised that some of the solution providers do not provide full coverage for Islamic banks"