As Islamic finance has developed into a $1 trillion-plus industry, women have been under-represented in senior roles – or indeed at all – within the sector. But the success of such high-profile female executives as Baljeet Kaur Grewal suggests this situation is changing, and at an accelerating rate.
Since 2008, she has been Managing Director and Vice Chairman of KFH Research, a wholly owned investment research subsidiary of Kuwait Finance House that is headquartered in Malaysia. Baljeet was promoted internally, from the position of Chief Economist; and before joining KFH, held the role of Chief Economist and Head of Investment Banking Research at Malaysia’s Maybank Group. She has previously worked at AMN AMRO and Deutsche Bank in London.
For Baljeet, a great part of the attraction to Islamic finance has been its moral dimension.
It offers a more equitable and ethical alternative to conventional finance,” she says. “I think that’s empowering, especially given the current banking crisis.
The industry continues to grow at a rate of 18 per cent despite a challenging global banking backdrop, and that says a lot about the potential and opportunity the sector provides. Islamic finance also tends to attract people who are more ‘mission focused’, with a long-term drive to ignite social change through a more equitable form of finance – and that allure is the same for me.”
Under her stewardship, KFH Research has been much lauded by its peers in the burgeoning industry, winning 12 international awards for excellence in Islamic finance. Baljeet has also achieved personal recognition, receiving the Sheikh Rashid al-Makhtoum award in 2006 for her contribution to Islamic finance research and development in Asia.
Her preparation for a life in banking began at Hertfordshire University, where she graduated with a first-class degree in International Economics. More recently, she decided to pursue the 20-month Executive MBA programme at Cambridge Judge Business School – an experience she is finding invaluable in the continuing development of her career.
I think it’s important for senior executives to continuously retool themselves and to re-learn,” she says. “Otherwise you harden, and with the global economy witnessing a seismic shift in the last few years, I thought this would be as good a time as any to learn new models, new management tools, and new innovations to be able to lead into the next growth trajectory.
The experience has allowed me to learn and grow with like-minded professionals from different countries and cultures. I don’t think you learn that from a textbook. And the contacts made from the course have been extremely useful. The case studies shared in class, using real business examples, have helped very much in my analysing of real management issues and the best ways to resolve them.”
Women in Islamic finance
As trailblazing figures such as Baljeet Kaur Grewal have shown, Islamic finance is opening up to women. At present, the trend is most notable in Asian financial institutions – and particularly those of Malaysia, home to the world’s largest market in sukuk, or Islamic bonds1.
Since 2000, Malaysia has had a female governor of its central bank, Zeti Akhtar Aziz. Last year, there were around 10 female sharia advisers operating in Malaysia, and the country’s Sharia Advisory Council appointed the second woman to its 11-member board2. Other Asian countries are following suit – Indonesia has had as many as six women on the 35-strong expert panel of its National Sharia Council3.
Female participation in Islamic finance within Gulf states is lagging behind that of Asia; but there are several reasons why this may change. With the industry growing by around 20 per cent each year4, it is estimated that around 50,000 professionals will need to be recruited globally over the next six years or so5.
Already, a shortage of Islamic scholars to advise on Sharia compliance is causing conflicts of interest, with many advisors forced to sit on multiple panels. This is prohibited in Malaysia, and the need to recruit a larger number of advisers is thought to have been a driving force in ensuring greater female participation6 in that country.
If the idea of female Sharia advisers and finance executives gains acceptance in Gulf Cooperation Council states, there is already a large pool of educated women from which they could be recruited and trained. In Saudi Arabia, for example, 93 per cent of women hold a secondary-school certificate or university degree7.
In the past, cultural conservatism in the Arabian Gulf has militated against women taking leadership positions; but societal norms are changing. The number of Saudi women working in the banking sector rose almost fourfold from 2000-2008 (albeit almost entirely in women-only bank branches)8.
It is arguable, too, that the cultural factors that impede the progress of women into executive roles are often overstated by Western media: several Muslim countries that have well-developed markets in Islamic finance, including Bangladesh, Indonesia, Turkey and Pakistan, have had female heads of government.
What lessons can be learnt by European bankers?
At present, Islamic finance represents just one per cent of global financial assets9. But the scale of its expansion has been spectacular over recent years: from 2003 to 2011, it has shown growth of 30.8 per cent10, and its total assets across the world are expected to reach $1.6 trillion by the end of 201211.
The Islamic finance industry has shown a great degree of resilience and competitiveness during the global financial crisis – an event that has increased Western interest in alternative financial systems that are predicated on risk-sharing rather than leveraging.
A number of mainstream media outlets12 have run stories suggesting that Islamic finance, with its prohibition on most forms of speculative investment, can shield its customers from the sort of catastrophic events that have taken place over the past decade. And more practically, Islamic finance is well placed to meet the demands of “back to basics” investors, who are now more wary of the unknown risks embedded in complex financial instruments.
The internationalisation of Islamic finance brings great opportunity for European bankers. Already, the UK has an active Islamic finance market: by 2009, there were five Islamic banks operating in the country; and many British banks offer Islamic “windows”.
For Islamic finance to thrive in Europe – and for European bankers to thrive in the sector – several challenges will need to be met. Professionals will be required who understand the industry architecture (and in particular its fragmentary nature, with different certificatory bodies delivering Sharia interpretations) and how Islamic finance may be integrated with domestic standards and regulations.
Business schools have their part to play in this process. Many are incorporating courses or modules on Islamic finance, and – as with Cambridge Judge Business School – hosting forums and conferences on the subject.
Sources: 1 Reuters; 2 Bloomberg; 3 Bloomberg; 4 Islamic Financial Services Board; 5 La Trobe University, Melbourne; 6 Reuters; 7 Al Masah Capital; 8 Booz & Co Ideation Centre; 9 UK Islamic Finance Secretariat, TheCityUK; 10 KFH Research; 11 KFH Research; 12 including the BBC, Financial Times, Huffington Post.