Islamic finance 'requires tailored approach'

Islamic finance requires a tailored approach, according to one expert.

John Willsdon, learning and development specialist for the Chartered Institute of Management Accountants (CIMA), claims that financial services providers looking to access the Islamic market must ensure they are complying with sharia regulations.

Conventional industry structures are insufficient to accommodate the requirements of sharia-compliant finance as two of their guiding principles contradict Islamic law, he explains.

"The two key aspects of compliance relating to the finance industry is that you can't charge or give interest and you should avoid uncertainty. The conventional finance industry is built on both of these prohibited factor," asserts Mr Willsdon.

To solve this problem, he advises that financial services providers should ensure their Islamic products are offered through a subsidiary operation whose activities are distinct from the conventional business.

Call centres may be of use to financial services providers looking to service the Islamic market, as evidenced by The Children's Mutual, which offers a phone-based translation service to widen access to its sharia-compliant child trust fund.