Interview: Bassel Gamal

How resilient is Qatar’s Islamic financial services (IFS) industry, and how have local banks adapted to the sector’s challenges?

BASSEL GAMAL: Islamic financial institutions are a vital part of the country’s financial system. The sector has recorded many achievements over the last few years as it continues to strengthen its capabilities. By developing products and services, as well as capacity, Islamic banks are taking part in the financing of the major projects that are currently under way as part of Qatar National Vision 2030, and in preparation for the 2022 FIFA World Cup. According to recent statistics from the Qatar Central Bank, the market share of Islamic banks increased to 24.5%, or QR350bn ($96.1bn), in December 2018, up from 20.9%, or QR119bn ($32.7bn), in FY 2010. In addition, strong government spending on infrastructure projects is expected to drive economic expansion. While GDP growth has slowed over the last few years, from extremely high rates of around 13% in the 2006-14 period, Qatar’s economic growth remains the strongest in the GCC region.

To what extent can Islamic banks differentiate their offerings from conventional banks in an increasingly competitive local market?

GAMAL: The regulatory framework for Islamic finance in Qatar is unique in the region. Conventional banking assets and insurance operations have been segregated from Islamic assets, with a view to strengthening and guaranteeing the sharia-compliant proposition of fully fledged Islamic financial institutions. In addition to this, Islamic financial institutions each feature an individual sharia supervisory board, which ensures Islamic products and services are consistent in their compliance with predefined standards. QIB focuses on meeting the fast-changing demands of modern customers. QIB has put significant effort in developing financial products, services and its internal sharia-compliant processes. For example, in October 2018 QIB was the first bank in Qatar and the first Islamic bank in the world to introduce instant financing through our mobile app.

In what ways are IFS institutions looking to expand their private sector asset base, and how can banks meet corporate financing needs?

GAMAL: IFS institutions are at a stage today where they compete across all banking segments. The position of Islamic banks has changed in today’s economy, with simplified processes, innovative products and competitive pricing being offered to clients.

At QIB, we derive the bulk of our operating income from the domestic private sector. We will continue supporting and benefitting from the robust corporate activity that is forecast to continue over the next few years. Islamic banks have managed to successfully raise long-term funding in order to meet future corporate financing needs, and Qatar has great potential not only to sustain strong growth rates among IFS institutions, but also across the sector in general.

How are local banks investing in the security of their digital and mobile banking platforms?

GAMAL: Given significant changes in consumer needs and expectations, investing in banking technology has become paramount to providing financial solutions. At QIB, technology investments have allowed us to introduce innovative and secure new products and services, making our customers’ banking experience faster and more convenient. Those investments, by automating processes and eliminating manual work, have also improved our internal controls, upgraded our risk management practices and led to efficiency gains.

While introducing new online applications catering to the banking needs of our customers, we have made sure that all these applications are secure and safe. This entails investments in our information security framework, training employees as well as raising customer awareness on evolving threats and how to avoid them.