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Bank Negara Malaysia-Deputy Governor's Keynote Address at the Islamic Finance Education: Global Roundtable Discourse

August 22, 2014

ENP Newswire - 22 August 2014

Release date- 21082014 - Deputy Governor's Keynote Address at the Islamic Finance Education: Global Roundtable Discourse.

Firstly, I would like to extend the apologies of Deputy Governor, Dato' Muhammad bin Ibrahim, who could not make it to today's roundtable discussion. I am honoured to be here on behalf of the Deputy Governor and be given the opportunity to share my thoughts on the subject of talent enrichment. Our efforts today in developing high-quality and comprehensive academic curriculum standards for Islamic finance are very timely and extremely important. I wish that today's roundtable sessions draw valuable opinions and incite fruitful discussions on ways to enhance the study programme for Islamic finance.

Let me start by giving two broad contexts. Painting the landscape that we have today, we can see a number of key trends shaping the banking sector that signals specific talent needs. This includes the evolving regulatory requirements, radical shift in technology, emphasis on risk management and demographic changes that prompt product innovation for new sets of customers. To ensure that the industry remains competitive and innovative, it needs individuals who are well-versed with regulatory treatments, technology-savvy and inventive as potential differentiators in the banking business. Hence, getting the right talent is not only critical in responding to these changes, it is an imperative especially for new developing industry like Islamic finance. This is the first broad context.

Let me share some statistics. It is anticipated that the overall Malaysian financial sector requires about 200,000 workforces throughout the years until 2020. As at end 2013, the Islamic financial institutions employ approximately 17,621 employees, which constitute around 11% of the total workforce in the overall financial sector. These numbers reflect talent demand and this is only for Malaysia. However, in our effort to meet this demand, we must not forget to place utmost importance on quality. Only quality talent would drive the industry's advancement. This is the second broad context.

These bring us to the essences of my remarks. To get to our desired outcomes, we must begin with an end in mind. What is the quality we aim to achieve? I would like to highlight three distinctive characteristics of high-quality talent that we want to secure for Islamic finance. Firstly, we need talent who can cater to the needs of the industry, whom will be sought after by the Islamic financial institutions. Secondly, we need talent that can contribute breakthrough ideas, ones whom will spark innovation and capable to envision and chart the future direction of the industry. And thirdly, we need talent who are solidly grounded on conceptual understanding and contemporary industry knowledge, ones who can carry the industry's transformations.

Our ability to produce the right kind of talent will be the key determinant in charting the future path of Islamic finance. The question is how? Today, I would like to touch on five key actions that we can undertake to unlock the potential of high-quality talent.

Get the best brains for the Islamic finance programmes

First and foremost, to ensure we supply the right individuals responsible for transformations in the industry, we need to attract the brightest minds. With continuous evolution, the industry demands more product innovation and development in supporting new growth areas for Islamic finance. Thus, it is paramount for the Islamic financial institutions to secure talent with an innovative mindset. Therefore, the search has to begin as early as the admission of students into universities. Universities should seek not only the capable students, but the best students available out there as the first step to unlock the potential for high-quality talent.

In order that we recognise one when we see one, we must do it right from the entry point. Academic entry requirements must be set high with the aim to gather a strong pool of brainpower that can be educated, suited to the needs of the market. I believe when we impose stronger controls at the entry points, we will enable the industry to get access to potent human capital that are able to produce revolutionary ideas to cater to the changing financial environment. When Islamic finance is equipped with striking intellectual capacity, it heightens the credibility of the industry and safeguards its prominence.

Breeding versatile talent to enhance employability

Onto my second point, as soon as we have secured the brightest students, we need to harness these abilities through providing a holistic curriculum. As job complexities intensify, we require talent with higher skill sets to navigate the financial world. We need to challenge their curious minds and sharpen their skills. On this note, it is necessary that the Islamic finance curriculum of the university must be embedded with skills that will enhance graduates' employability. Among the competencies that are highly sought after are integrated and analytical thinking skills, technical skills with digital capabilities and the ability to deal in crisis conditions. With these skills ingrained in the curriculum structure, we get to nurture the desired talent from the very start.

It is also fundamental to inculcate strong values of ethics and integrity that underpin Islamic finance among the students. Teach mutual respect from the very beginning through educating the students with all Mazhab teachings. The differences of opinions should not be seen as a hindrance to the development of Islamic finance, but an opportunity to meet the needs of diverse communities. Open their minds, let them explore Islamic finance from all angles. In this way, students get to appreciate the intellectual differences and value the flexibility in rooms of differing opinions. We don't want to only produce talent that are equipped with the know-hows, but also build ethical characters that are able to make good moral judgements. This is how we breed versatile talent to cater to the high needs of the industry.

Establishing a conscious learning environment

Thirdly, in establishing a learning environment that is conscious of the emerging issues that exist in our world today, the faculty plays a focal role. While theory-based education is integral, I believe the connection between classroom learning with the real world is a strong stimulant to knowledge acquisition. Therefore, the academic staff must be conversant with contemporary issues to be able to highlight this meaningful link to the students.

This includes more active participation by the faculty in providing feedback to consultation papers from the financial regulators, for example Bank Negara Malaysia, which promotes greater appreciation towards regulatory developments relating to the financial sector. This will elevate the quality of teaching that takes cognisance of the external business environments, including international developments and social, legal and political trends. Along these lines, students will be trained with the ability to contextualise circumstances in accordance with current events. By raising the level of awareness, we provide them with a foretaste of the reality that is necessary for the syllabus to remain practical.

Building a strong linkage with the industry

Fourthly, we need to build a strong linkage with the industry to minimise potential mismatch of human capital needs. Nurturing the best talent for Islamic finance is a shared responsibility between the academia and the industry as a whole. The supply of talented graduates must resolve the scarcity of talent that may impede the progress of Islamic finance. For this reason, close partnership between the two parties is key towards bridging the gap between talent upbringing in institutions of higher learning and the industry's requirements. In addition to joint working groups between the banks and the academia in tailoring the curriculum to the needs of the industry, greater engagement between them is also useful to maintain the close link. For example, a structured periodical interactive discussion with bankers provides students with insights and increased exposure of the real banking world. This is particularly beneficial in enhancing students' exposure and marketability. Joint research between the banks and the institutions of higher learning would be another avenue. I am certain the bankers would welcome to work together with the academia.

Creating eminence of Islamic finance business school

Finally, we need to raise the quality of Islamic finance business schools. To date, in Malaysia alone, we have over 30 domestic institutions of higher learning that offer academic courses relevant to Islamic finance. In raising the quality of these education providers and in promoting the highest standards for talent development in the Islamic financial sector, these institutions should consider seeking internationally-recognised and specialised accreditation, in addition to the mandatory accreditation. In the future, creating a single league table that ranks the Islamic finance business schools according to specified criteria and indicators will further create eminence of the Islamic finance education institutions. The league table will serve as the first benchmark to assess the performance of the business schools, based on the scoring of its wide-ranging qualities and educational offerings. In other respects, this ranking system will spur competition between universities and colleges in terms of promoting high-quality courses and programmes.

What we strive for is excellence in our Islamic finance education offerings so much so that the quality of our graduates is self-evident. When we set to achieve this goal, our learning institutions will one day stand side by side with other prestigious universities in the global university league.


To conclude, let me emphasize that collaboration among all of us here is key. While we are addressing the talent shortage, we need to orchestrate our effort in producing high-quality talent for Islamic finance. As the industry is maturing and there is more interconnectivity between business functions, the call for expertise with well-rounded skills is even more demanding. That is why quality over quantity is key to ensure we hit the primary target set for human capital development. I believe when you are out of quality, you are out of business. But I also believe, if we are committed to drive this together, the talent in Islamic finance will be the centre of excellence.

Thank you.

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Source: ENP Newswire

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