Making work experience count in Sharia banking

Does Islamic Finance experience count?

Fact: there are many people from the conventional finance who were recruited into Islamic finance in the GCC countries during the oil price spike of 2003 to 2008, and they add much value to this niche market's growth and development.

These people brought their experience of market cycles, understanding on credit, risk and operations, and insights of marketing and public relations into the niche market and set up Islamic financial institutions or ran departments. They have contributed to the cause, but it may not be their ultimate cause.

Some of them may voluntarily leave Islamic finance or be forced to leave because of an external event, such as a credit crisis. The question then becomes: does their work experience in Islamic finance count (1) at other Islamic financial institutions in same country; (2) at Islamic financial institution in a regional country; (3) at Islamic financial institutions in another region, such as southeast Asia; in countries such as Malaysia, that have Islamic finance; and (4) in non-Muslim countries that do not have Islamic finance.

The answer to points one and two is a resounding yes with many examples of lateral moves in Gulf Cooperation Council (GCC) countries. The answer to point three is that there are not enough examples of success stories of GCC Islamic bankers taking executive positions in Malaysia and vice versa. Hence, it requires more observations. Finally, the answer to point four is that it has been a challenge for displaced Islamic bankers to find jobs in conventional finance in their home countries that do not have fully functional Islamic finance.

Sector careers

It's an unwritten rule that people typically stay in the same economic sector, health care, energy, media/journalism, finance, etc., and not necessarily in the same companies during their careers, as that is where their core competence and knowledge lies. Thus, fund managers typically do not become energy executives, and journalists do not become wealth managers as reporting/covering on wealth management is different than managing wealth.

Returning bankers

The credit crisis caused a number of people to return home from the Gulf countries. The consensus, in the US, is that it is a challenge for returning Islamic bankers to find a jobs in the banking and finance sector.

Further compounding the employment opportunities in the US financial markets is the ‘double dip' downturn combined with the European sovereign debt issues.

The US, unlike the UK and France, is not a beachhead for Islamic finance, notwithstanding many Islamic private equity acquisitions in the US in the last 20 years. There is not a dedicated deposit-taking Islamic bank in the US, despite it population of nine million Muslims, bigger than all of the GCC countries except Saudi Arabia.

There are community banking initiatives, such as the Chicago-based Devon Bank, and non-bank ‘banks' offering Islamic mortgages, such as Guidance Residential, and Securities and Exchange Commission (SEC) which has approved several Islamic equity funds, such as Amana Funds. There are not enough senior level job openings at such places.

Those that were lucky enough to get initial interviews, when asked about what they were doing in the GCC, explained their job roles and KPIs for an Islamic financial institutions. They rarely got second interviews.

Necessity

Some of these colleagues actually removed their Islamic banking experience, and said they had travelled, wrote a book, worked with non-profit organisations, started their own trading or consulting company with a local partner, and so on. Obviously, its not out of shame, but out of necessity to get jobs in a demanding and charged environment.

Furthermore, there was a small, vocal (but very media savvy and loud) anti-Sharia movement, which acted as a deterrent for those companies who contemplated offering Islamic finance in the post 9/11 time period.

For example, around the time of Barack Obama's election in November, 2008, the US Treasury had a seminar called Islamic finance 101, in which myself and several colleagues were participants. On the same day there was a press conferenceand held by one of the opponents of Islamic finance not far from the Treasury building.

Lawyers

It is interesting to note that Islamic finance lawyers and journalists, especially those involved in structuring complicated multi-billion dollar deals, sukuk, funds, etc., were in greater demand than Islamic bankers (in the US and elsewhere) in the post crisis period. The legal experience was deemed a ‘badge of honour' of international experience.

Law firms, especially those wanting to get into Islamic finance, understand continuing GCC petro-surplus will result in deals and private equity acquisitions in ‘safe havens' such as the US and hence, experienced Islamic finance attorneys are a scarce commodity.

Islamic finance experience counts more in some professions than in others globally.

Returning Islamic bankers will need to position their experience and themselves by having done asset backed deals that amount to hundreds of millions if not billions of dollars and still have connections to decision-makers and banks in, say, Dubai or Abu Dhabi, Qatar or Saudi Arabia.

The writer is Global Head of Islamic Finance and OIC Countries. Opinions expressed here are the writer's own and do not reflect that of his organisation or of Gulf News.