Riyadh, Asharq Al-Awsat – One can hardly read a report or attend a conference or workshop that raises the challenges facing Islamic banking today without there being mention made about the lack of qualified human competencies in the industry. In fact; it is the single-most significant challenge, especially since recently issued reports indicate that the Islamic banking industry requires approximately 11,600 qualified bankers by the end of 2010.
The reality that is apprehended by whoever deals with institutions in this industry is that many of the employees are largely unaware of the details relating to their work, and since the industry is based on attention to detail; this frequently affects the accuracy of the transaction. Likewise, neglecting these details could lead to the corruption or invalidation of contracts. Therefore, it is critical for employees to become aware of the precision of the entailed details and the financial institutions in question must assess and cover that risk in the appropriate manner.
Furthermore, developing products within the industry requires the employees to have an understanding and knowledge of the foundations upon which Islamic banking is based, in addition to being aware of the philosophy behind it and its objectives.
There is no doubt that this cannot be achieved through short training courses or workshops since they are general and thus give a broad view without delving into details. Employees in the industry who have received six-month training courses cannot be regarded as professionals nor should they be expected to develop the industry’s tools.
This is where the pressing need for Islamic banking academies is most sensed; they would be entitled with preparing fresh university graduates and qualifying them for the labor market, in addition to training bank employees through internal scholarship programs offered by the banks in which they work.
To become successful among students and employers, these academies must have a strict admissions policy and they must combine between theory and practice in their curriculum while including all the related banking sciences and also including both academics and professionals in their education cadres.
Regarding admissions, no students should be accepted unless they pass an English language test and whoever fails can join the English language course that the given academy offers so that they may qualify for admission. In terms of balancing between theory and practice, there will be academic hours specified in which students will be required to work in banks.
Evaluation should be left to departments that specialize in banking and it may also be done through an agreement between a given academy and local banks. I sincerely believe that the local banks would welcome this agreement since it is common knowledge that banks recruit students over the summer break as a contribution to serving the society or upon the demand of the Ministry of Labor, as is the case in Saudi Arabia.
As such, there is no harm in appointing students from banking academies; in fact, the banks will fulfill a number of interests, including serving society and recognizing the students who are qualified to enter into the field before being bound by a contractual relationship with them. This would also save efforts spent searching for qualified staff to work in banks, which is an annual process through which banks select graduates and train them for a minimum of six months.
Moreover, this agreement means that the given academy would complete the practical section of its program and it will attract more students as the possibility of employment starts to increase. In order to prepare the academy students and qualify them to enter into the labor market, professional banking figures must be chosen to give lectures and regularly hold workshops and seminars – provided that they cover subjects that are included in the curriculum so that the students may benefit from it.
The presence of academies such as those described guarantees financial success since a simple review of banks’ financial statements would reveal the vast amounts expended on training. The training budget of one of the smallest banks in the kingdom is estimated at 30 million Saudi Riyals (US $8 million), so imagine what it must be like with other banks.
Moreover, these academies would meet the labor market’s need by providing qualified employees in the field. This gap is one that I have personally sensed during my work with the Islamic Banking Committee at the Saudi Arabian Monetary Agency (SAMA) where all the banks voiced their need for such academies that can guarantee the cooperation of banks.
I hope that Islamic banking academies can soon become available in every market in the region, and particularly in Saudi Arabia.
* Lahem al Nasser is an Islamic banking adviser.