Seldom does one find an Islamic financial institution that is concerned with research and development, let alone an Islamic financial institute that establishes a company that specializes in this field. This is one of the shortcomings of Islamic financial institutions that I have often drawn attention to in previous articles. If Islamic financial institutions want to establish a separate identity from conventional banking then this is something that they must address. Following in the footsteps of conventional banking and attempting to reproduce conventional banking services will only serve to disqualify Islamic banking from providing solutions to the global financial crisis. I have also repeatedly drawn attention to the lack of information available on Islamic banking, and the conflicting figures available on this subject. This is due to the lack of a database [of information] which in turn is due to the absence of specialist institutions in this field.
However while searching the internet for some information about Islamic finance I chanced upon the website for the Kuwait Finance House Research Ltd – http://www.kfhresearch.net – which is a subsidiary of the Kuwait Finance House [KFH] established in Malaysia in 2007. KFH Research Ltd conducts research and analysis that covers macroeconomics and [financial] sector trends, as well as currency movement, commodities, and the Islamic capital markets. The site is free and so visitors can make full use of its content after registering for membership, which takes only approximately 24 hours. I particularly recommend visitors take a look at a report entitled the Global Islamic Finance Director 2008. Although the idea behind KFH Research Ltd is to provide research and information on the field of Islamic investment, a visitor to the website may leave with a different impression. The majority of what is published by the company concerns conventional or general finance [rather than Islamic finance]. The company should reconsider its strategy so that it better serves the objective for which the KFH Research Ltd was originally established, namely to provide research and analyses on the Islamic financial industry. To this end, KFH Research Ltd should undertake the implementation of the following steps;
– Pay attention to future studies on Islamic banking with regards to the market and Islamic financial services.
– Create a database of the Islamic financial institutions around the world, classifying them according to financial specification and geographical location. This database should be periodically updated.
– Create a database of the members of the regulatory and research bodies in the field of Islamic banking.
– Issue quarterly reports on the state of the Islamic banking industry, according to financial sector and geographic location.
– Create a database of fatwas, decisions, and personal research on the Islamic banking industry.
– Heed opinion polls conducted about the Islamic banking industry with regards to testing customer’s sensitivity towards Shariaa-compliant financial services in Muslim countries, and the extent to which they are satisfied with these services and institutions. As well as examining the response of customers in non-Muslim countries to the Islamic banking industry, the extent to which they accept this, and the impact this industry has had on their view of Islam and the Islamic world.
– Spread knowledge on Islamic banking by way of providing books and leaflets on this industry, as well as explaining its services and assets via the website.
– Pay attention to the Arabic language which is the language of the Quran, the Sunnah, and the jurisprudential culture upon which the Islamic financial industry is founded. Arabic is also the operational language of the KFH, which is the company financing this project, and so it is only right for its releases and publications to be issued in this language. The people of Kuwait are well-known for being proud of their Arab identity and language, and there should also be an Arabic language version of the website [that is currently only available in English].
These are the most important steps that KFH Research Ltd should undertake if it wishes to be a pioneer in its field, and perform the role for which it was established. Nevertheless, I must offer my gratitude to KFH Ltd and its management for the gift that they have given to the Islamic banking industry, and all those who are concerned with it.