Here’s an exclusive interview with Rosie Kmeid, Vice President – Global Corporate Communications & Marketing at Path Solutions, the leader in Islamic core banking platforms mainly in Africa, a region which is becoming the world’s hottest hub for this new banking model.

Let us start from the basics. What does “Islamic core banking system” mean?
As you know, a core banking system is the software stack which is used to support a bank’s most common transactions like opening accounts, debit card withdrawals or payment processing. An Islamic one is similar to the conventional system, but it is compliant with the Sharia, and covers the following:

• The sources of funds, such as URIAs, Wadiah savings, Wadiah current accounts.
• The uses of funds, such as Murabaha, Musharaka, Ijara, etc.
• RIAs account management, Islamic treasury, Islamic trade finance, CRM, CIF, and the related delivery channels like phone banking, Internet banking and ATMs.  
• Supports proper recording, tracking and management of URIAs, the pools of funds.
• Produces the related accounting entries and confirmations according to industry standards and the Sharia rules and regulations.
• Supports Sharia audit procedures (transaction processing log and maintenance of legal documentation).
• Incorporates the Hijri calendar and Zakat calculator.

Thus, a state-of-the-art Islamic banking suite is imperative to manage those services. Very often, functions which sit outside these core transactions, are managed by separate systems or dedicated standalone systems. Our system however, unifies all of these disparate systems on a common core and code base, where the services are then plugged-in in a modular fashion that allows for fast and easy configuration of the required Islamic banking products.

The system has been designed with efficiency as a priority. Most processes can be automated, supporting straight-through-processing (STP), reducing the number of errors and the need for manual intervention, and driving down operating costs.

You have a pretty bold slogan in your advertising campaign: “We guide your ambitions”. How would you materialize this concept?
At Path Solutions, we focus on providing Sharia-compliant core banking platforms to Islamic banks and Islamic microfinance companies looking to scale up their offerings using digital technology. The strapline of “We guide your ambitions” communicates what we do best so that these institutions benefit from increased efficiency and profitability in the digital era. We help them learn global best practices of digital transition.

In this context, we simply build the technology required by end users to perform banking transactions from remote and unbanked areas using portable devices in a Sharia-compliant and transparent manner.

We go above and beyond to ensure our clients’ complete satisfaction.

How do you differentiate yourself from the likes of Temenos, Oracle FS and Tosan?
There are possibly as many as 15 core banking system vendors worldwide who claim offering an Islamic banking suite, most of these have been around for over a decade but have not implemented a single project at an Islamic bank. The IT vendors you mentioned do provide the Islamic functionality but they are generally referred to as legacy providers. It is true that their systems are well proven and reliable, however their systems are not certified by a standard-setting body as concordant with the Sharia, and they also tend to be inflexible and are incredibly expensive to deploy and maintain, making them inaccessible to small and medium-sized Islamic banks.

Path Solutions is a proven industry leader, a key technology enabler and a business partner for over 130 prestigious Islamic banks worldwide. With over 25 years of solid experience in Islamic core banking platforms, Path Solutions is a major contributor to the development and growth of modern Islamic banking, by researching industry new trends and developing innovative solutions to meet the needs of a fast-growing community.

Our Sharia-compliant banking suite covers the full spectrum of functional requirements in accordance with the Islamic law. It features complete management of products and mechanisms to serve operations according to the Sharia rules and regulations. It offers full compliance while providing flexibility and efficiency of operations, reducing costs, maximising productivity and delivering high-quality client service experience.

Besides, our suite is built based on modern architectural principles, i.e. cloud-ready, built on a service-oriented open architecture and highly componentized. The SOA architecture means our Islamic core banking system is highly flexible, can be easily integrated with other systems and incorporates an adaptive platform for innovative banking.

Does Path Solutions fall under the label “banking-as-a-platform”? In what sense do you have a platform business model?
Our banking platform fulfills all clients’ needs with regard to technologically supporting their business requirements, ranging from a fully managed BaaP service all the way down to just providing the software and letting the client integrate and run. In parallel to the BaaP, our platform is engineered to provide a complete open ecosystem where we supply our powerful processing engine, while opening up the platform and access to our clients’ delivery channels if needed.

The post Leading the way in revolutionizing Islamic banking in the digital era appeared first on International Finance.

24th October 2013

Scotland is emerging itself as a potential hub for Islamic finance following a major conference held by leading Scottish law firm Todd Murrays and the Islamic Finance Council UK. The conference discussed the possibility of attracting investments from the Middle East for infrastructure and renewable energy projects and outlined the opportunities for ethical investors, to tap into the lucrative industry that is estimated to be worth over $ 2.3 billion. The Islamic Finance Council UK (IFC), based in Scotland, estimates that an investment of £ 120m and £ 200m could be invested in Scotland for infrastructure products following a successful Islamic Sukuk bond.

Head of Banking & Finance at Tods Murray LLP and Executive Board Member of the Islamic Finance Council UK (IFC), Graham Burnside said, “The UK has the potential for provision of faith based financial products that adhere to the financial principles of Shariah compliant financing. Scotland is now firmly at the centre of this niche market which is growing at an estimated rate of 15-20 percent per annum.

Demand for Ethical Products

In 2005, Tods Murray LLP, produced the first Scottish Islamic mortgage, allowing Islamic scots to purchase homes through United National Bank, under agreements in accordance with their faith. Last year, the Islamic Bank of Britain introduced their Scottish Islamic mortgage or Home Purchase Plan (HPP) which prohibits the receipt of Riba (interest) by both the buyer and lender, as it is against the principles of Sharia Law.  Recent polls have shown that more than half of Scots want to see some of their money invested using green or ethical criteria – higher than the UK average. Imran Pasha, Head of Sales and Service at Islamic Bank of Britain (IBB) said “At an industry level, Scotland already has strong Islamic finance credentials based on the long standing work carried out by the IFC and Tods Murray. This, combined with a growing appetite amongst businesses and consumers for ethical finance, puts Scotland in a good position to develop itself as an Islamic finance hub.”

History of Ethical Practice

The creator of the first Scottish Islamic mortgage and IFC board member, Graham Burnside says it is not an exaggeration that Scotland could drive forward the expansion of Islamic banking in its key western stronghold. He says Scotland has sympathy with faith based and ethical finance which stretches all the way back to Rev Henry Duncan and the formation of the first savings bank for the underprivileged in 1810 in Dumfriesshire. “If the UK wishes to be seen as a hub for Islamic finance, i see no reason why Scotland cannot take a leading role,” he said.

“If you go back 150 or 200 years, many of the banking products developed here had a church inspired origin, so there are more connections historically than meets the eye” he said.

The post Scotland –Opening Opportunities For Islamic Finance appeared first on International Finance.