By Rushdi Siddiqui, Business Times
There is an increasing disconnection between Islamic finance and Halal Industry and the Muslim customers of tomorrow: the youth.
Because of Google, YouTube, Twitter and Facebook (GoYouTwitFace), Generation Y see themselves as “change agents” using information in real time, witness the Jasmine Revolution sparked in Tunisia.
They are interested in making five-figure salaries while consciously balanced about the environment, the politically disenfranchised and the impoverished.
Their “care is their cause” and respect is no longer given to authority, slogans, pep-talks or motivational speeches, but it must be earned by deeds and actions.
Unlike Generation X, Y is not afraid to leave their home country for “greener pastures”, hence, brain drain has become an Archilles’ heel in Muslim countries for building knowledge-based economies.
Query: How many young people attend Islamic finance and halal conferences, especially in the Gulf Cooperation Council (GCC) countries?
However, if the keynote speaker was Mohammad Yunus, Founder of Grameen Bank, many have attended, including non-Muslims, and have been inspired.
Careers not jobs
Even if there are openings in Islamic banks, notwithstanding lack of enough qualified people, they are not capturing the hearts and minds of the youth. Islamic banks may have recruiting drives and may be present at job fairs, but they do not have the longest lines. They simply appear unattractive!
Furthermore, Islamic financial institutions that rely exclusively on winning awards, “Best this or that”, for recruiting, will soon realise it does not capture the imagination of the youth because it’s not very relevant to them in today’s global “information environment of change”.
They see themselves as “moral compasses” requiring the appropriate “stage”, and the Islamic banks are stuck on promoting Murabaha financing for cars and mortgages or top of a league table for Sukuk.
It’s a well known fact that Goldman Sachs competes with Microsoft and Google for the best talent, meaning the human assets are not only looking for money, but also an opportunity to make a personal imprint.
Islamic banks are competing for the best minds with not only market-based compensation packages, but also opportunity to “make a difference”.
These young people want to hear about Islamic banks winning awards in categories like:
1. Most Admired Islamic Financial Institution
2. Most Trusted Islamic Financial institution
3. Most Socially Responsible Islamic Financial Institution.
They want to work for Islamic banks sponsoring awards on innovation, Islamic fashion or social networking. This may be a way to entice more women into Islamic finance or finance more non-real estate sectors.
They want to encourage their Islamic banks to sponsor events and concerts by performers they value like Sami Yusuf, who sings about Islamic values, like “Mother”, in his lyrics. They want to know if Islamic banks are sponsoring young Olympic programmes in Muslim countries.
If Malaysia can spend money and send a man into space (where was the ROI?), imagine the impact on the national psyche and international attention (in OIC countries) if Malaysia has a Gold medal winner in the summer Olympics!
At a recent event in Dubai, Bold-Talks 2011, I was asked on Islamic finance in the context of the “human interest or public good” story of this niche market. The event is about people who have had their human spirit tested and overcame their breaking points.
A presentation on the prohibition of interest, and the history of Islamic financing is not going to magnetise a large, emotionally charged Gen Y audience.
I presented a talk on the anti-syariah movement in selected G-20 countries and cheerleading Islamic finance in selected OIC, and received the “Golfer’s” applause. But, the takeaway message from this event was how to make Islamic finance relevant to Generation Y?
Islamic finance is seen by many young people as banking for Muslims, banking of their father’s generation, and banking focusing on the letters rather than the spirit of Islam.
After listening to photo-journalist Joy Tessman speak about the BP oil disaster of 2010 in the Gulf of Mexico, I soon realised it is the environment. Today, not one Islamic bank is member of the Equator, Carbon and/or Climate Principals, yet, the GCC has one of the largest carbon footprints.
Additionally, if we look at today’s 560 plus Islamic funds, not one Islamic “green fund” comes to mind.
Where is the environmental Corporate Social Responsibility (CSR) of the Islamic finance as stewards of the earth? Islamic banks finance and fund projects, infrastructure to real estate development via syndicated loans or Sukuk, but where are the environment impact covenants?
Imagine Bold-Talks 2020, the keynote presentation is from a CEO of a financial institution that solely financed an infrastructure project in a densely populated African Muslim country encountering decades of civil and ethnic strife.
He shared the emotional challenges of overcoming government corruption to lobbying various hostile tribal elders threatening his personal life, to explaining the benefits to future generations of US$500 million (RM1.5 billion) water, education and healthcare projects that complied with Equator Principles.
He happened to be the head of the world’s first Islamic mega-bank that used long-term Sukuk financing which was oversubscribed by pension funds, hedge funds, and family offices in G20 countries. It showcased not only ROIs for investors, but, more importantly, exhibited the human interest of Islamic finance.
Today’s youths want to be part of and lead “impact investing”, and if Islamic banks are not prepared to move from Murabaha, then depositor democracy will not only punish, withdrawals, but also encourage local conventional banks to lead.
This “borderless” generation is not contented with the bylaws of their “father’s Islamic bank”, they want the optional, corporate social responsibility (CSR) to become obligatory to yield social returns.
For example, I suspect many of the Islamic banks today would be “cross examined” without mercy on what makes them “Islamic” by the Muslim youth of today.
Islamic banks need to not only understand the environment and relevant values of their future customers, but more importantly, create an atmosphere where they are polled as the “most ad-mired company” young people want to work for!
The writer is Thomson Reuters’ Global Head of Islamic Finance based in New York.