Islamic banking and finance is rapidly evolving from niche to mainstream. Estimates of the present size of the industry vary considerably depending on the source but it is widely accepted to be in the region of USD 1 trillion of assets (with a growth rate of 15 – 20% per annum), with potential to grow to USD 2.8 trillion by 2015.

What is Islamic Finance?
Islamic financing adheres to the rules of Shariah, known as Fiqh al-Muamalat (Islamic Commercial Law).  Shariah is an Islamic cannon law, the rules and norms of which emanate from two primary sources – the Holy Quran and the Sunnah (living traditions of the Prophet Muhammad. Peace be upon him).

Fiqh al-Muamalat is also known as the Islamic Law of Transaction or Islamic Commercial Law.  It deals with the issues of contract and legal effects arising from contracts.  The main principles are mutual consent, avoidance of prohibited elements, and lawful contractual objectives.  The prohibited elements under Shariah law include interest, gambling, alcohol, armaments, uncertainty/speculation and pork.

What constitutes permissible investments or structures of financing may vary depending on the interpretation adopted by the Shariah scholars in different countries. Typically, an Islamic financial institution will have an in-house Shariah Board comprising Shariah scholars to scrutinize transactions it undertakes to ensure that they are Shariah compliant.

Whilst there may be a distinction in form from conventional financial products, Shariah principles can be adopted to structure a wide array of financial products to meet a vast variety of financial needs.  In more developed Islamic Finance markets such as the Gulf Cooperation Council (“GCC”) region and Malaysia, many of the retail needs traditionally met by conventional financial products are already being met by Shariah – compliant products.

Growth of Islamic Finance
Key contributing factors behind the growth include an increasing demand for Islamic Finance products from Muslims (including high net worth individuals in the Middle East), a growing acceptance of Islamic Finance by non – muslims, conventional financial institutions having started to recognise the potential of the Islamic Finance industry, and portfolio diversification by fund managers who favour including Islamic Finance products into their portfolio mix.  Most recently, under the cloud of the global financial crisis, many non – Muslim countries are seeking out liquidity to support their businesses from GCC countries and are turning to Shariah compliant finance to support this “survival” initiative.

Support from the governments of Malaysia and the Gulf countries have encouraged the growth of Islamic Finance and established these countries as the leading Islamic Finance hubs. Governments of traditional financial hubs such as London, Hong Kong, Singapore and Tokyo, have also announced their bids to be Islamic financial centres, further indicating the growing interest and acceptance of Islamic Finance at the global level.

Taking advantage of this trend
The growing acceptance of Islamic Finance has lead to an ever increasing demand for practitioners with Islamic Financial Services experience.  At the present time, there is a significant shortage of talent to fuel the engine rooms of growth for the sector.  While many universities and professional organizations have already started to develop courses on Islamic Finance, the ability to meet the current demand in the short term is unlikely.  Therefore there is a tremendous opportunity for people with experience in conventional Financial Services operations to leverage that experience and to put it to good use in an Islamic Financial institution. These experienced practitioners are capable of making a very rapid transition to being “Islamic Finance capable” through appropriate “needs – based” training techniques, which could have them performing effectively in an Islamic Finance environment in a very short period of time.

The industry continues to grow, despite the current economic situation, and this provides an opportunity for personal growth for many conventional finance practitioners.