The Islamic financial sector began its journey in Bangladesh in 1983. It has passed over three decades since then. Still the sector is facing a shortage of skilled human capital, though Bangladesh has billions of Muslims seeking an alternative financial system.
Human capital development for Islamic financial services is a very important issue. This is also very important, particularly for Islamic finance, which has emerged the most rapidly growing segment in the world financial system.
Islamic finance refers to financial transactions that are done in compliance with the Islamic principles or laws called Shariah. There has been a sharp increase in the demand for Islamic financial services. It has been observed that the Islamic finance has played an important role in economic development of the country. From that point of view, the human capital in this particular sector needs to be trained effectively. The training will help enhance their level of knowledge and skill and change their attitude leading to increased professional capabilities.
Issues and challenges: To address this issue in Bangladesh, the authorities concerned have to acquire expertise in the particular area. They must be able to ascertain the risk of non-compliance with Shariah, either in the day-to-day operation of Islamic financial institutions or in the structure of end products marketed to their consumers. When it comes to governance, the role of Shariah board is very important and the board must approve and endorse the structures of Islamic financial instruments prior to their marketing. This sector has long been witnessing a mismatch between the demand for human capital and the supply. To address the issue the authorities need to deal with several key factors:
So far the public and private universities offer very little or no relevant programmes or curriculae on Islamic finance. The universities need to find out the focal point and come up with a curriculum on Islamic finance that is relevant to the sector. Only a small number of universities are offering Islamic finance-related courses throughout the country. It is relatively very small compared to the human capital required in the sector.
A survey conducted by Deloitte in 2010 among the Islamic finance leaders in the Gulf region shows a very worrying trend. The findings suggest that more than 60 per cent of Islamic finance professionals and practitioners require further training and skill development. The findings also reveal that only 18.5 per cent of the respondents believe that the Islamic finance institutions in the Gulf Cooperation Council (GCC) region are properly staffed with the human capital having the experience to cope with the challenges ahead. This creates room for educational institutions to embark on Islamic finance training, courses, and programmes.
Talent is a must: To achieve the sector's improvement in the complex and competitive financial world, creating a pool of talented people for the sector will be more important in the next decade. The sector needs a dynamic workforce to stay competitive. Talented people are required for different areas of financial services including wealth management, Shariah advisory, corporate finance and advisory services.
The progress of the sector is also dependent on research, which is a key to greater innovation and investments for long-term competitiveness. Both the research institutions and the sector must strive together to introduce new innovative solutions that will contribute to vibrancy and diversity of the Islamic financial services. A joint research even can go beyond the geographical boundary with adoption of cross-border initiatives and convergence of ideas. Structured training programmes facilitating understanding of the Islamic finance and its value propositions are also needed.
The Shariah council can play its part in creating human resources and conducting research on contemporary issues related to risk mitigation, liquidity management and hedging that would lead to new ground-breaking developments in Islamic finance.
Finally, managing a talent pool will be crucial for advancing Islamic finance and integrating it with the mainstream finance. In that case it needs collaborative efforts from different international Islamic institutions that will help set standards through establishment of regulatory agencies. And that must begin with introduction of Islamic finance curriculum.
