ITS is a leading international Islamic Banking solution provider that lives and breathes Islamic values and culture. The company has successfully combined this with its technology prowess to produce ‘ETHIX’, a next generation solution portfolio offering Islamic finance institutions Sharia-compliant products and a range of pre-defined business models including Islamic finance, Islamic investment, trading and delivery channels.
Hence, following an Omani royal decree in May authorizing the establishment of Sharia-compliant services, ITS took the initiative in holding the 1st Islamic Banking Conference in Oman and shared its 30 years of industry experience with what is sure to become a key market.
BL: Why did ITS take the initiative in launching The First Islamic Banking Conference in the Sultanate of Oman which was held at the Shangri-la’s Barr Al Jissah Resort and Spa on June 20th, 2011?
Al Saeid: As you know, the Islamic finance industry is currently valued at Dhs3.65 trillion ($1 trillion) worldwide, of which Dhs717bn ($210bn) is invested in the Middle East. Following the royal decree by His Majesty Sultan Qaboos bin Said Al Said authorizing Sharia-compliant financial products in Oman, we are really keen to provide our long experience and quality services in Islamic banking to the Omani banking sector because we believe in its ability to remain resilient to the global challenges and grasp all the potential and benefits of Islamic banking. Our relationship with regional and international banks helps us to offer our clients the best service and unique training. We set our goals very high for the short and long terms capabilities to assist in the rise of Islamic banking in Oman and in the entire globe. The number of participants exceeded our expectations and we attended to over 100 banking decision makers, Islamic banking experts and financial organizations who showed big interest to learn more about the Islamic banking.
BL: What’s your vision for the Islamic banking in the sultanate of Oman, How do you see its growth and how was the impact of this launch on the participants?
Abdou: In Oman, like in many others countries in the Gulf, the interest is definitely there. There’s already one license issued to one full-fledged Islamic Bank.
There is a demand from the consumers. That puts together the global trend in growth in Islamic banking. We’ve seen that the Central Bank of Oman and the banks have started to show great interest in regulating Islamic banking. What to be seen are the models of operations that will be allowed by the Central Bank. It is more likely in Oman that the Central bank will allow the conventional bank to open up Islamic windows, giving preference to their customers rather than only allowing either a conventional or a full-fledged Islamic bank, which could create some panic. I believe that based on the wisdom of the Central Bank like I’ve seen in many other countries, the initiation would be with the window approach based on how the market adapts to it and later on things could change. Accordingly, we see a huge demand in Islamic windows for the conventional banks. ITS is probably the only company that has a know-how in implementing Islamic windows for conventional banks, not only from a technology point of view, but from a business consultancy point of view.
The attendance actually was much more than what we expected during the registration. That shows the huge interest in knowledge about the subject. More seminars are required to transfer more knowledge and awareness. I believe Oman will definitely require from institutes to start offering training. Alliances with other Islamic banks in the region are always a good thing to do, so that the time of transferring the knowledge can be done quickly. We are very happy to have participated and sponsored this first event of its type in Oman and we will continuously hold many more focused seminars about the subject in the sultanate of Oman. Subsequently, ITS is definitely looking to be a partner to the Omani market for Islamic banking.
BL: Today’s workplace is drastically different from a mere 10 years ago. How does ITS stand today amidst the tough competition, are you satisfied with the present situation especially that ITS has been the first IT company to offer its technology to the Islamic industry?
Al Saeid: About the present situation, we have much confidence in our goals and achievements. ITS has been in the market for over thirty years. It’s not something easy for any IT company to endure for so long in today’s world. Technology changes every day; many companies ride the wave for a while in a certain trend, and then all of a sudden we don’t find them anymore. For a company to sustain over all these long years, it must be that they are productive in transforming their business as per the market needs. When we see great challenges, we must stand up and meet them. We’re proud to drive forward. Since its inception, ITS started to focus on providing technological knowledge and not selling it. The company is partnering with important customers like banks, telecommunication companies, key government organizations, that need to have their IT running 24 hours a day, 7 days a week, 365 days a year and we provided them with tailored-made solutions to reach their business goals and needs (not generic solutions that they have to adapt to). ITS unique value proposition is that we create strategic alliances and partnerships with our clientele over many years. Our company has a very strong business model that we have continuously nurtured and developed.
ITS being a Middle Eastern IT company, it specialized in the financial industry; it catered to the first Islamic banks in the world. Therefore over the years, we’ve gained the business knowledge of the Islamic banking and the financial sector not only from an IT point of view but from the business pains that Islamic banks go through and what differentiates them from the conventional banks. Several years ago, we made a strategic decision to look into the root causes of the business pains for these banks. We saw huge growth globally in Islamic banking; there were different flavors of Islamic banks from the Gulf countries, North Africa, the Asian pacific and the Islamic financial organizations opening up in Western Europe in UK, France, Germany and Austria. ITS has also a great interest in North America, where officials are studying the regulations for Islamic banks. When we put all of that together, we realize that a key ingredient in all of this is the technology issue. We wanted to make sure that technology does not just play the critical role in the banks, like it does for conventional banks but we should also look at areas where Islamic banks are different from conventional. The key criterion is Shariaa compliance. The difference between conventional banks and Islamic banks is the Shariaa element. Shariaa compliance has no specific definition that everybody can agree upon. The intention of the Shariaa when it comes to finance is clear, forbidding Al-Riba, and allowing Trade. You will find that when Shariaa scholars, Shariaa boards and different organizations discuss the various types of products based on this principle end up by having differences, but it doesn’t mean that one product is Shariaa compliant and the other isn’t. At the end, it is an interpretation left to these Shariaa scholars as long as they don’t break the original principle of buying and selling and that cash is not a good to be sold.
I believe that is the essence of diversification across the world. It allows for different mindsets to adapt to Shariaa compliance as they see it, and it is because of that diversification Islamic banks were able to grow so quickly all over the world. If the world had to wait for every single Shariaa scholar in the world to agree together on what the standard is, then there will be never be an industry. It’s a forum that creates communication, it creates different ideas, and therefore it creates innovation. From a technology perspective, that kind of definition when you come to implement it on the ground to a bank needs a different type of thinking. How do you comply to something that you don’t know? That’s the key question. Some of our competitors for example go and talk to certain Islamic banks and say their software solution is Shariaa compliant. Who has the right to claim this point? Realizing that, we needed to create something that allows any Islamic bank not to define parameters within Shariaa compliance, but to actually create the Shariaa compliance as the bank sees it from the ground up. As a result, we can go and tell a bank we are sure that our software can enable you to be 100% Shariaa compliant as per your Shariaa compliance and not as per ITS’s or as somebody else’s standards. It’s a piece of software “clay” if you wish that you can mold as per your Shariaa board as long as it doesn’t break the original principle of Islamic banking which is buying and selling of goods and doesn’t allow interest which we ensure in our product and the rest has to be flexible enough for every organization to define their own philosophy of Shariaa compliance. That’s what we’ve done with our latest product that we have launched recently in Oman and it is called ‘ETHIX Financial Solutions’.
BL: ITS has grown tremendously over the years. Does ITS as it stands today fulfil your expectations and your ambition?
Abdou: Of course not. We are satisfied with all the growth and the success that we have had. However, it does not mean that’s the end of your ambition. Our dream and ambition is to be the global leader in providing Islamic banking solutions, and we are well on our way to establishing that goal. At this stage, we find that there’s no other company in the world that has the focus we have in providing technology for the Islamic banking market and invests the amount of money we have invested in research and development for industry. ITS is a company that comes out of this region where Islamic banking actually innovates and exports its knowledge to the rest of the world. So, we find all these factors when put together position us very well to go further in our journey as a global leader. We are satisfied of where we are today, but with every mile stone we establish a new dream and we go after it.
BL: What are ITS future plans for the year 2011 and hat are your expectations for the 2011 financial results?
Al Saeid: We have a new dream right now, and we are well on our way of rising ITS to new levels and in new geographies. Primarily, we’re continuing our expansions into the Asia pacific region and in the African market. We do have also plans to expand our operations in Western Europe, Eastern Europe, where there is a rising demand for Islamic Banking.
BL: Does ITS cater only to Islamic finance and doesn’t it work for conventional finance?
Abdou: ITS caters to both Islamic and conventional institutions. The difference between us and other vendors is that we completely separate both products that are totally different while other vendors work for a conventional bank and try to customize its work for an Islamic bank. And that usually doesn’t work. We’ve seen many failures happen over the years by many vendors. Our product has been designed from the ground as a philosophy for Islamic banking. Our Islamic banking product will not work in a conventional bank and our conventional product will not work for an Islamic bank. That’s the key differentiator of ITS. Technology isn’t something we sell; it’s something that allows us to add value to the business of our customers.
BL: What is ITS structure and its future plans?
Al Saeid: ITS is a group concept organization. We have offices that sell and service directly in about 25 countries, we operate in 34 countries as we speak today. ITS employs over 39 different nationalities and that makes ITS a truly a global organization because we believe that local culture is significant for successful projects and implementations. We believe in local cultures, and I believe to be truly a global company, you have to be truly local in lots of countries.
We have our major human resources, research and development center out of Cairo that hosts currently over one thousand software engineers. Last year, we established and launched our global delivery center out of Cairo that allows us to monitor and proactively support our customers 24/7 anywhere in the world.
We have multiple regional headquarters in Kuwait, Dubai, Saudi Arabia, Lebanon, for the Levant region, and we have a unit that looks at the global operations of establishing channels and partnership. We have many more ideas and plans coming up. We do plan to grow organically and inorganically in the future.
