How Can Islamic Banking System Providers Bridge the Skills Gap?

Rosie Kmeid

Almost all organisations today are in the midst of a talent crisis. From retailers, to educational institutions and media companies, to the medical and cultural sectors, and financial services sector, all are in the race for talent. Globalisation and technological advances are two forces profoundly impacting today’s global workforce. These forces are creating a growing talent shortage that is posing a very real threat to business growth.

In a digital economy where talent (and not just machines) is a critical factor to the success or failure of a business, organisations are confronted with difficulties in attracting and retaining employees with the right skills and competencies. This phenomenon poses a risk and puts an enormous pressure on organisations’ potential to expand and maintain competitive advantage.

While studies reveal that the landscape globally is characterised by an overall shortage of talent across all sectors, the problem is felt most acutely in the Islamic financial services sector. At a time when the industry is facing crucial challenges emanating on many fronts, other industries are absorbing the very few qualified talent, leaving the Islamic financial services sector shorted.

The unconventional but nascent sector has a growth rate of between 10 to 12 per cent annually and is gaining prominence for its ability to meet the unique demands of the modern Islamic economy. Despite being a niche market with unlimited opportunities,the Islamic financial services industry lacks the foundation necessary for its advancement, whereas the scarcity of experienced industry professionals and Islamic IT experts in particular are the most frequently cited barrier. As it stands, this sector remains a demand-driven market with limited resources.

A possible mismatch between graduates and market needs

Along with the expanding Sharia-compliant universe, the ecosystem is evolving to address the technology challenges and growing product sophistication in the industry. New trends and emerging breakthroughs in technology are redefining the financial landscape, while trends in Islamic finance and regulatory compliance continue to rise. This has led to a need for skilled and creative human capital to support the advancement of an ever growing hyper-connected world.

Researchers suggest that the lack of cooperation between academia and industry has resulted in a mismatch between those graduating and the skills required by the industry and therefore, new graduates are ill-equipped for challenging careers in a dynamic environment.The matter is made more complicated by the fragmentation of Islamic financial regulations and the extreme variation with which Sharia principles are interpreted and implemented within and amongst jurisdictions.  

Technological advances, tougher regulations, demographic shifts and the digital revolution are putting greater emphasis on establishing a larger pool of competent Islamic IT professionals to meet the increasing sophistication of the Islamic financial services industry.This very challenging economic environment has placed talent development and capacity building as a high priority objective for Islamic banking system providers to achieve sustainable development in the Islamic financial services industry.

The issue of talent remains under the radar

Responding to the critical need of the digital mesh, Islamic banking system providers have embarked on a massive hunt to counter the human capital shortage with focus on top talent having a solid background in IT and familiar with Sharia understanding and international business practices, capable of driving the industry’s transformation, to fill their most specialized positions. They are looking for talent with in-depth knowledge and hands-on expertise, who can contribute breakthrough software innovation and chart the future direction of the industry.

Recognizing the shortage and acknowledging its negative impact on productivity and ultimately, profitability, a couple of Islamic banking system providers are taking a more systematic approach to ensure a sufficient pool of talent capable of adapting their curricular and competence to the needs of the sector. Internally, they are developing training programmes that critically train and empower future talent on the industry’s required skills, building comprehensive competencies in a combined effort to close the gap.

But hiring, training and retaining IT talent for this specific type of industry is not always an easy feat.Unfortunately, most other industries participate in technological innovation at a significantly faster pace than the Islamic financial services industry, which is more attractive to the ambitious IT professional motivated by innovation, career path and competitive compensation. Hence, it is quite difficult to entice those who don’t typically view joining the Islamic financial services sector as an exciting opportunity nor fulfilling on the hunt for a job, especially given the rate of innovation in the overall tech world.

Due to the dearth of talent, Islamic banking system providers are competing with each other over a very limited pool of available and experienced IT professionals. As the sector continues to grow, mature and consolidate, demand for competent candidates will intensify, deepening the shortage and placing considerable constraints on their potential to expand.

Exciting projects as motivation for IT professionals

Given the increasingly complex and sophisticated Islamic financial system, skilled human capital is the key competitive differentiator to maintain performance and competitiveness. As the industry is witnessing transformation at breakneck speed, it critically needs a continuous pipeline of uniquely qualified and talented workforce in order to sustain its impressive growth trajectory.

In the meantime, Islamic banking system providers are proactively searching for qualified talent, well-versed to develop and implement pioneering and ground-breaking Sharia-based software applications. This right-fit talent needs to understand the specific Sharia principles and accordingly pioneer standard-embedded technology that, while complying with Sharia, keeps pace with current technological trends.

Yet, despite the fact that the chore of finding the right talent continues to be arduous, the good news is that we can expect new projects that make IT roles in the Islamic financial services industry more interesting. The emergence of start-ups, the rate of innovation and diversification, given global digitalization, the pace and impact of reforms toward broader financial inclusion and an ethical re-foundation/reinvention of finance are all increasing. These are the kinds of projects that may attract exceptional talent to create Sharia-compliant apps that truly make an impact and shape the world. As technology hurtles humanity forward at such incredible rates, it is quite fascinating to imagine what the future will bring. Having the opportunity to work with trailblazing Islamic banking system providers with global reach and market-leading portfolio will be big a motivator for IT talent.

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