Islamic finance education: A global outlook

The growth of the Islamic finance industry significantly requires talented people, especially in countries such as Russia, Kazakhstan, Tajikistan, Algeria, Tunisia and Morocco where Islamic finance is a comparatively new phenomenon with significant government support. To have continuous success, such developments should be supported by an adequate number of talents and experts in the field. This has led to growing number of new universities and institutions offering Islamic finance courses along with centers established solely to promote Islamic finance.

The Malaysian Islamic Finance and Economics Report 2016 suggests that the main challenge of the Islamic finance industry nowadays is the the lack of competent human resources. On the other hand, there are more than 533 institutions worldwide offering degrees and courses in Islamic finance.

Review of 2017
In 2016, the International Council of Islamic Finance Educators (ICIFE) conducted a survey of 40 institutions with 63 Islamic finance Master’s programs across 19 countries. The results of the survey showed that the UK has highest number of programs (exceeding 20), followed by Pakistan and Malaysia with fewer than 10. About 32% of universities offer a Master of Science program followed by 15% offering an MBA and professional certification. Program coursework with minor dissertation is highest at 53% of the offered programs.

Within the Islamic finance discipline, both the finance and non-finance courses were examined. Approximately 51% of the courses offered fall under the non-finance subdomain. Quantitative or information technology leads the non-finance courses by 19%. This can be justified with the emergence of fintech as a future of the global finance. The IT domain is followed by marketing/management, Islamic economics and Shariah and legal domains which are given approximately the same importance in Islamic finance education. On specialization relating to subsectors, it was observed that capital market ranked the highest at 22% followed by banking at 21%. There were significant generic programs (not specified as specialization) that constituted 38% of the sample. The focus on specialization has yet to be more pronounced to facilitate comparison across program types.

In terms of program nomenclature, as mentioned earlier, 32% of the universities offer a Master of Science program specializing in Islamic finance, Islamic banking or Islamic investments followed by 15% offering an MBA and professional certification. This presents an interesting indication that both graduate schools and learners prefer either the academic research route, the MBA route or professional certification route in preparing for middle and senior management in Islamic financial or related institutions. With regards to the program structure, coursework with minor dissertation ranked the highest at 53% followed by 23% coursework that appeals to the executive/graduate Islamic finance learning communities. Course assessment for the taught programs ranked highest at 53% with 60% summative (exam) and 40% formative (assignments) followed by 25% with a preference for 40% summative (exam) and 60% formative (assignments).

The continuous success of the Islamic finance industry requires a sound and established education system. In 2017, this phenomenon was a main topic of international conferences and symposiums. For example, during the 5th Islamic Economics and Finance Education Symposium organized by the Kuala Lumpur-based ICIFE in collaboration with the Jeddah-based Islamic Research and Training Institute (IRTI) in Kuala Lumpur, 50 academicians and industry experts from 15 countries discussed topics such as current developments of the Islamic finance education landscape with reference to learning communities, teaching resources and the academic curriculum for the various academic and professional programs.

In Istanbul, Istanbul Sabahattin Zaim University (IZU) organized an international congress on Islamic economics and finance and the importance of organizing Islamic finance education conferences was the theme of the keynote address given by Prof Sabri Orman, a board member of the Central Bank of the Republic of Turkey. For the first time, two universities in Turkey, namely KTO Karatay University and IZU, introduced Bachelor’s and Master’s programs in Islamic finance in English. Another country with spectacular progress in Islamic finance is Kazakhstan. The recently founded Astana International Financial Center (AIFC) established the AIFC Bureau for Continuing Professional Development to address Islamic finance qualifications and training programs. All in all, Islamic finance education has gained momentum in the international arena and this leads to the importance of harmonization and standardization of the curriculum framework.

Preview of 2018
Challenges and the way forward
The main problems Islamic finance programs are facing currently are related to human resources, research quality, methodology, program diversity and industry involvement.

Those problems can be solved with the implementation of three major recommendations:
1. Standardization of education practices
2. Collaboration between western and Muslim institutions, and
3. Government support for fundamental and applied research programs relating to alternative finance.

Enhancing Islamic finance education
Islamic finance education can be enhanced by having the following:
1. An international coordination body
2. Improvement in research quality
3. Technical and financial assistance from IRTI
4. Curriculum enhancement and talent development (the ICIFE model)
5. Multi and interdisciplinary skill development, and
6. Communication between the industry and academia.

Conferences in the field of Islamic finance education are important for the continuation of the field’s growth. In order to follow on the progress made, clarifying the underlying methodology is needed and also improving coordination and communication between Islamic finance education institutions, so that the Islamic finance education curriculum will reflect the industry’s needs and as such include various fields.

Islamic finance scholars must therefore develop expertise in a variety of fields including conventional finance, Shariah law and Islamic economics. Research must be produced by the collaboration of young scholars and professors in both Muslim and non-Muslim countries. Efforts for the standardization of the Islamic finance education curriculum must be continued through certification and accreditation by an Islamic finance body.

These aspects of educational reforms will reduce the gap between theoretical and practical Islamic finance. Islamic finance education is a great tool for future generations in order to deal with the many social, religious, racial and economic conflicts.

Dr Kamola Bayram is the project executive of training and research at the International Council of Islamic Finance Educators. She can be contacted at [email protected]