The Future Is Online

Noor Islamic Bank began in 2008, in the midst of the financial crisis. How did the bank come about, and what is its importance for the Gulf region and Dubai?

Noor Islamic Bank was created to bring a new face to Islamic banking in Dubai and the region. The financial crisis taught us to be resilient, and now we focus on liquidity and capital. That was the secret of our success, and we are in our second year of profitability. It started off tough, but we are now doing well.

What is the potential for Islamic banking in Dubai, and how big is the market for sharia-compliant banking?

The market remains large, and the potential throughout the region is huge. The GCC is the busiest and most developed region for Islamic finance in the world; however, there is still a lot to be achieved in terms of trade, cross-border trade, and long-term Islamic sukuks. I believe the market has yet to attain its full potential.

You have stated your desire to be among the world’s 100 most innovative banks by 2020. What measures are you taking to achieve those goals?

Banks are conservative and traditional by nature, because of the element of risk that we have to manage. However, at Noor we are firmly focused on the future, and can see tomorrow’s trends taking shape today among our customers. We see strong changes, particularly among our young customers in the way they approach and deal with banks. I don’t see other banks adapting as well yet. They rarely change their ways unless it is to catch up with new trends that prove profitable, and are by nature cautious and conservative. I really believe we need to consider innovation seriously. Innovation doesn’t just mean the technological dimension. It involves the way you see things, your perspectives, the way you deal with customers, your interaction, your whole business, and even your philosophical outlook. Social and digital media have opened up so many horizons that need to be explored, and that is how I see the next generation of customers. They don’t come to the banks anymore, so what is the use of all your branches? You need to find customers online; that is where the future generation wants to interact.

Do you think a large portion of your customers still need to be educated in terms of online banking?

I remember when ATMs initially appeared; it was difficult for people to get used to them at first—they thought it was a complicated machine. However, they all got used to them over time. It is the same with online banking, and banking done through smartphones. People will get used to these modes and realize they are the way to go. They are far more convenient than traditional banking methods.

What is your customer profile?

We have all sorts. Our major activity is corporate, but we are looking to diversify our portfolio. I am interested in moving into more specialized corporate niches.

Yes, HH Sheikh Mohammed’s goals mean there will be more interest and opportunities for Islamic banking to develop and flourish. But, the key factor is not just finance, because that always comes after trade. I think HH Sheikh Mohammed wants to develop production and trade around the region and the world of Islamic halal products; be they food, cosmetics, or healthcare products. There is a huge market for these products, as long as you can bring investors in and open this market. The financial market, sukuks and so on, will follow on from this.How will Dubai as a world hub in the sukuk trading market benefit Noor Islamic Bank, and what are the challenges you face?

Do you see local bonds, currently being issued in London, coming here to Dubai?

I don’t know why they are being issued in London, because to my thinking the natural place for them is here in this region. We have international markets that can be accessed from anywhere. The brand equity of the entities that issue sukuks is from this region. These are known in their region, and liked by investors here. If you take it to London from here, you are just trying to attract investors to that market.

Corporate social responsibility is a major part of a bank’s outlook in compliance with sharia principles. What sort of initiatives do you undertake in that regard?

We recently announced the establishment of Noor Awqaf, an asset management company that is dedicated to charitable endowments (awqaf). It ensures that these endowments are managed efficiently and profitably in order to cater to people in need. Islamic endowment activities, one of which I chair, have suffered for years from a lack of efficient financial skills. These awqaf are run as an asset- and fund-management-type institution, or as a treasury. However, they have to be managed efficiently from a financial perspective. We launched Noor Awqaf as a joint venture between an awqaf and a financial institution, and it is the first ever example of this. I think this will bring efficiency and financial rewards into Islamic endowments, which will prove more beneficial in terms of addressing the actual requirements of those in need, those whom the awqaf is for.

How is Noor Islamic Bank a positive influence in Dubai?

We are trying to redefine Islamic banking by creating a more progressive, open, tolerant, and global model. We don’t want to be pigeonholed into a limited audience, and want to become a global player. We aim to create an Islamic icon built on those principles.

What are the company’s targets in the UAE over the coming year?

We will keep doing what we have been doing so far. We will consolidate our position in debt structure with sukuks. Moreover, we will continue to diversify our business, building stronger roots in our existing market. We will look for fresh opportunities and growth, and we’ll try to tap into new areas in our market that have been underpenetrated.