As I indicated last week, this week sees the World Halal Forum coming to Malaysia and an opportunity to debate and discuss the further alignment between the worlds of Islamic Finance and the Halal industry. My view remains the same, in that in order to increase volume and quality, global standards are required.
One of the areas where standards need to be made clearer is in the definition of halal itself. For many, both Muslim and non-Muslim, their only understanding is with regard to the slaughtering of meat, when, in fact, there is much more--in particular, cleanliness, health, and ethical values. So much more could and should be done to promote these values and to build a globally recognizable standard around a halal brand. Imagine if those values were clearly understood how large and strong the market would be.
Such growth could be a driver for the development of Islamic Finance still further, but we still do need to ensure that we maintain our eye on the ball with regards to the development of products that meet consumer needs and concentrate on ensuring that our customer service exceeds all expectations. We also need to keep pushing to ensure that as much of financing business as possible is done in a Sharia’a compliant way. There is still significant room for growth in the GCC, where, even though, Islamic Finance is starting to have a growth spurt; there is still opportunity to develop further. Also with the Sovereign Wealth Funds who need to be encouraged to invest more in Sharia’a compliant assets on a regular basis.
If a true balance between values and returns can be achieved in both the Islamic Finance and Halal spheres can be achieved, then I have no doubt that both industries will be fighting their weight pretty soon.
As always, there is still much to do and not a moment to lose.
Daud Vicary Abdullah is the Global Leader of Islamic Finance at Deloitte and has more than 35 years experience within the finance and consulting industry, working in Asia, Europe, Latin America, and the Middle East. He is a regular commentator in the media on matters relating to Islamic Finance and has written and contributed to a number of books on the subject, including co-authoring the book Islamic Finance: Why It Makes Sense.