Grooming Generation Y for Islamic Finance
By Rushdi Siddiqui, Global Head, Islamic Finance & OIC Countries, Thomson Reuters
Available at: http://alifarabia.com/2011/04/27/grooming-generation-y-for-islamic-finance/
Unless Islamic finance is made relevant to young people, it will struggle to gain popularity and grow in strength in the future.
I was fortunate to be part of the Bold Talks 2011, a conference about people who have had their human spirit tested and overcame their breaking points. There was an ex-Guantanamo Bay prisoner, Moazzam Begg, ex-Guantanamo Bay guard who converted to Islam, T.J. Holdbrooks, and globally recognized Stanford University professor, Philip Zimbardo, known for the ‘Stanford Prison experiment.’
The experiment was a study of the psychological effects of role playing as prisoners and prison guard, and showcased the eventual abuse and ensuing torture towards the weak when there is absolute power without accountability.
Obviously, these three speakers can draw and command the emotional attention of any audience in almost any part of the civilized world with their real-life touching experiences.
I was asked present on Islamic finance in the context of the ‘human interest or public good’ story of this niche market. But, a presentation on the prohibition of interest, and the history of Islamic financing was not going to magnetize a large, emotionally charged Gen Y audience.
While Islamic finance is theoretically about social justice, equity and fairness, the inclusion of the financially disenfranchised, stewardship of the environment, this was not going to captivate the audience’s attention.
However, it’s humour, not money, that ultimately builds bridges between people of different ages, interests, ethnicities, religions, and backgrounds. I suggested to the audience that:
1. If Islamic finance was a fruit, it would be a Durian, some love it and some hate it.
2. If Islamic finance vehicle, it would be a steam engine, noisy, slow, steady, but will get you to your eventual destination
3. If Islamic finance was an actor, it would be Bruce Dern, great talent, but always gets role of a bad guy.
4. If Islamic finance was a gadget, it would be the handphone excellent invention, but must continually reinvent itself before going obsolete.
But my presentation could not be a 30 minute stand up Islamic finance stand-up comedy — there was not enough material to fill the allotted time.
While the presentation received only polite applause, the Bold-Talks event raised an important question for Islamic finance and Halal Food industry: what is the Islamic finance story that will bind today’s and tomorrow’s generations together?
After listening to photo-journalist, Joy Tessman, speak about the BP oil disaster of 2010 in Gulf of Mexico, I soon realized it is the environment. Today, not one Islamic bank is member of the Equator, Carbon and/or Climate Principals, yet, the GCC has one of the largest carbon footprints. Additionally, if we look at today’s 560plus Islamic funds, not one Islamic ‘green fund’ comes to mind.
Where is the environmental Corporate Social Responsibility (CSR) of the Islamic finance as stewards of the earth? Islamic banks finance and fund projects, infrastructure to real estate development via syndicated loans or Sukuk, but where are there environment impact covenants?
Imagine Bold-Talks 2020, the keynote presentation is from a CEO of a financial institution that solely financed an infrastructure project in a densely populated African Muslim country encountering decades of civil and ethnic strife. He shared the emotional challenges of overcoming government corruption to lobbying various hostile tribal elders threatening his personal life to explaining the benefits to future generations of $500 million water, education and healthcare project that complied with Equator Principles.
He happened to be the head of the world’s first Islamic mega-bank that used long term Sukuk financing which was oversubscribed by pension funds, hedge funds, and family offices in G20 countries. It showcased the not only ROIs for investors, but, more importantly, exhibited the human interest of Islamic finance.
Today’s youths want to be part of and lead ‘impact investing,’ and if Islamic banks are not prepared to move from Murabaha, then depositor democracy will not only punish, withdrawals, but also encourage local conventional banks to lead. The excuse of an embryonic stage of Islamic finance carries less weight each passing day in their eyes.
During recent travels to UAE, Bahrain, Malaysia, Indonesia and few other Muslim countries, I believe I met the future social ‘faces’ of Islamic finance. This ‘borderless’ generation is not contented with the bylaws of their ‘father’s Islamic bank,’ they want the optional, corporate social responsibility (CSR) to become obligatory to yield social returns.
Their benchmarks are Google, YouTube, Twitter and Facebook (or GoYouTwitFace), where they use information in real time to float trail balloon of ideas to their ‘networks’ in real time. This “native-online population’s” attention span is short and patience is even shorter (it’s Right here, Right Now), yet they are also ‘Mother Theresa’ compassionate for transformational ideas. For example, I suspect many of the Islamic banks today would be ‘crossed examined’ without mercy on what makes them ‘Islamic’ by the Muslim youth of today?
The knowledgeable and internet savvy Gen Y, using social media as their default communication mode, will (1) not be afraid to bring scrutinizing transparency and accountability, (2) share and flush out transformational ideas from cut and paste ideas and, so, (3) Islamic banks need to not only understand the environment of their future customers, but, more importantly, create an atmosphere where they are polled as the ‘most admired company’ young people want to work for!
Islamic banks need to make themselves relevant to tomorrow’s customers, by appealing to today’s youth movement comprised of human interest, social returns and impact investing.
The ball is in the Islamic bank’s court, please do not dribble off of the feet!
Hadith of the Prophet: “Lataftahanna al-Qustantiniyya wa lani`ma al-amiru amiruha wa lani`ma al-jayshu dhalika al-jaysh.” (“Verily you shall conquer Constantinople. What a wonderful leader will her leader be, and what a wonderful army will that army be!”)
Source: Ahmad, al-Musnad 14:331 18859 [sahih chain according to Hamza al-Zayn], al-Hakim, al-Mustadrak 4:421-422 [sahih according to him and al-Dhahabi concurred], al-Tabarani, al-Mu`jam al-Kabir 2:38 1216 [sahih chain according to al-Haythami 6:218-219], al-Bukhari, al-Tarikh al-Kabir 2:81 and al-Saghir 1:306
Ibn `Abd al-Barr, al-Isti`ab 8:170 [hasan chain according to him], al-Suyuti, al-Jami` al-Saghir [sahih according to him]