Islamic finance has gained a firm foothold in the international financial landscape and is projected to move along a growth trajectory in the coming decades. But for Islamic finance to sustain its long-term growth, it is vital that it is able to offer a distinctive value proposition that encompasses all the needs of its customers for Shariah-compliant products. This will at the same time present an opportunity to attract socially responsible investors who seek opportunities to widen the scope of their ethical investments, given the similarities in terms of universal values.
In the same vein, the Islamic asset management industry can expect significant growth potential, especially with the need to intermediate excess savings particularly in the emerging countries in the Gulf and Asia. But various challenges remain to be addressed before this potential can be realized, not least of which is the need for industry to build credible investment track records and to expand the range of Shariah-compliant investment products. Immense benefits for both institutional and retail investors can be derived by industries devoting greater resources into more extensive research on product development.
While the structuring of Shariah-compliant products through the adaptation of their conventional equivalents has contributed much to the growth of Islamic finance, there is a pressing need to reach out to a larger customer base by expanding the industry’s offerings to ...