Having introduced the Islamic finance option more than two decades ago, Syariah-compliant banking now accounts for around 40 per cent of the local market, a figure some experts believe would rise to 60 per cent by 2017, the OBG said in its latest economic update on the country.
Brunei has long recognised Islamic finance as a sector that can be developed to its advantage, both to serve the banking needs of its domestic economy and as an avenue for economic development at the international level.
Though the Sultanate has made significant strides towards developing itself as a strong Islamic finance centre, experts have identified a number of key areas Brunei needs to expand and improve upon to achieve its goals.
One of the foremost requirements is for Brunei Darussalam to produce more syariah experts, according to Mohamad Akram Laldin, the executive director of the Malaysia-based International Sharia Research Academy for Islamic Finance.
Speaking in Bandar Seri Begawan while attending the International Conference on Islamic Finance, held in mid-May, Akram said a major challenge for the industry was to integrate knowledge of sharia and of the market.
"We need to have more syariah graduates go into the area and understand the market," he said.
"We need people who are able to run the business, who are capable, and can plan. I believe with the establishment of the Centre for Islamic Banking, Finance and Management (CIBFM), Brunei Darussalam has taken a very good step. We have started seeing more and more people who are trained in Islamic finance coming up. This is a very good sign."
Brunei Darussalam's leading educational facilities will also seek to support the government's policy of developing the Sultanate as a centre of Islamic financial excellence.
The CIBFM, which was established by the Ministry of Finance to address key challenges in Islamic financial practice and to assist in the development of human resources for the sector, as well as other institutions, are also working to deepen the pool of qualified personnel in Brunei Darussalam.
The Universiti Brunei Darussalam (UBD), along with the Sultan Sharif Ali Islamic University and other centres, offer a range of courses on various aspects of Islamic finance. In mid-April, the UBD announced it would be reviewing its curriculum for its Islamic finance courses to ensure their content was relevant to the sector, a process that would also include seeking input from the industry itself.
According to Mohd Hairul Azrin Hj Besar, a lecturer at the UBD's Faculty of Business, Economics and Policy Studies (FBEPS), it was vital for educational institutions offering qualifications in Islamic finance to make sure their syllabus reflected the needs of and the latest developments in the industry.
"We can produce graduates but if they are not relevant to the industry, they would not be contributing much to it," Mohd Hairul Azrin said.
"So for now we are looking at the university itself; the respective faculties will re-evaluate what the syllabus is and see how relevant it is. I think we will also be looking at what the industry players expect from the syllabus."
Another development that should boost Islamic finances educational stocks was the announcement by Bank Islam Brunei Darussalam (BIBD) in mid-April that it would be sponsoring a chair of Islamic banking and finance, leadership and entrepreneurship at the FBEPS.
According to Javed Ahmad, the managing director at BIBD, the person appointed to the position would be a prominent international figure who would contribute to programme development, teaching methods and research in the areas of Islamic banking and finance, leadership and entrepreneurship.
"The chairperson would drive collaborative research on the development of Islamic financial products, as well as to provide solutions to overcome the industry's challenges, Javed said. The chairperson would provide the faculty, and UBD as a whole, the platform to become a leading international academic centre in the field of Islamic finance, leadership and entrepreneurship," he said.
The Brunei Times