Tuesday 21, August 2018 by Islamic Business & Finance

Supporting Islamic fintech’s growth


Ayman Sejiny, CEO, Ibdar Bank, speaks to Islamic Business & Finance as the bank becomes a founding member of the Bahrain Fintech Bay.

What led to the joining of Bahrain Fintech Bay?
At Ibdar, we believe that fintech is a value driver, contributing to better financial solutions across the entire industry. Bahrain Fintech Bay (BFB), with the strong support provided by the Government of Bahrain and the Central Bank of Bahrain, is working to build a fintech ecosystem that will support industry growth and position Bahrain as a regional fintech hub. This will further reinforce the Kingdom’s strong position as the region’s financial epicentre. We want to actively support this process.

How will the Fintech Bay aid in making Bahrain a centre of the global Islamic economy?
Fintech is changing the way the financial sector works and the fast pace of innovation in the banking space is leading to more collaborations between banks and fintech companies. By attracting, incubating and supporting local and global fintech start-ups and partnering with global fintech centres and large financial and non-financial companies, we see that BFB is enabling a complete fintech ecosystem in Bahrain that will facilitate the Kingdom’s digital transformation and ensure we are on par with the technological advances of leading global economies.

How important is it for your institution to be on the cutting edge of fintech?
It is very important for Ibdar to use mature fintech disruptions for our Digital Finance business. We are at a cross-over time where it is obvious that the days of ‘e-banking’ are nearly over and the shift to mainstream digital finance is becoming a reality. Providers will no longer offer digital as an addition. Instead, core functions and offerings are becoming digital. Ibdar is an early adopter, transforming its organisation into a best in class fully digitised Islamic Investment Firm for the Global Islamic Digital Economy (GIDE). We are building our digital finance capabilities through innovation, substantially transforming the way the we deliver products and services. In addition to delivery channel innovation, we are digitising our back-office operations and processes, and building a world-class, in-house digital finance team.

Do you feel the broader Islamic finance industry in Bahrain is focused on this issue as well?
Definitely. Regulators, large retail and commercial banking institutions as well as non-banking financial companies are all getting on board with fintech in Bahrain. Banks in particular are responding to the availability of new technologies, and changing customer behaviours driven by a demand that products and services are simple, efficient and therefore embrace fintech. Regulatory technologies or RegTech will enable more efficient internal processes and are lowering cost of compliance while enhancing regulatory oversight.

What have you done so far with Bahrain Fintech Bay?
Ibdar has joint as a founding member and is currently monitoring and actively considering all innovations that facilitate financial inclusion, reduce friction and meet the demands of today’s empowered customer.

What do you hope to get out of the partnership with Bahrain Fintech Bay in the long term?
Financial innovation is the core of our firms DNA. Our innovation process Is based on an agile collaboration model and we use both external and internal ideas and paths to market. As the BFB network grows, we will collaborate more and as a result see more financial innovation in terms of Islamic banking products and services which can be delivered to our global investors.

Tell me about Ibdar Bank.
Ibdar Bank is a young, dynamic organisation and one of the largest Islamic investment banks in Bahrain that is engaged in Real Estate, Aviation, Capital Markets and Investment Advisory activities. Established in 2013 as a result of a merger of three Bahrain-based banks, Ibdar combines vast financial expertise with a proven track record. The bank has a geographical reach that spans the GCC, MENA, Africa, UK and the US.

What is the bank’s investment philosophy?
To deliver income generating investments. We believe that investors must be provided with a myriad of opportunities that cater to a diverse risk appetite including low, medium and high risk investment opportunities across a wide range of sectors. Our investment strategy is guided by the United Nation’s Six Principles of Responsible Investment, which are voluntary and aspirational. They offer a menu of possible actions for incorporating environmental, social and corporate governance (ESG) issues into investment practises across asset classes, and as such the bank strives to undertake investments that add sustainable social and economic value to the markets and communities in which we invest.

What does Ibdar provide for its investors?
Ibdar bank provides its investors global income generating investment opportunities in aviation, real estate, Sukuk and investment funds. The bank is also expanding its services to include an array of Investment Advisory services.

How is Ibdar enhancing its offerings?
The bank sourcies high yielding investment opportunities. In real estate, our focus is in the UK and US markets, these opportunities are usually found in smaller cities rather than the capitals. In aviation, developing countries are providing a wealth of high yielding investments. Ibdar is also currently growing its investor relations team, allowing the bank to be even closer to its customers to understand their requirements so that Ibdar can deliver the products they are seeking. Our Wealth Management advisory services will include Awqaf, Family Office, asset allocation and sourcing and valuation.

Where does Ibdar Bank focus its investment portfolio?
The bank is focusing on fee income producing services and investment opportunities that are less capital intensive. Issuance of DCM (Debt Capital Market) products and advisory on ECM (Equity Capital Market) opportunities. Our current portfolio is focused on prime global real estate and aviation. Ibdar’s real estate team has been extensively involved in allocating unique investment opportunities within the international real estate market, with a special focus on the UK, US and MENA region in order to provide our investors with safer, better and more profitable opportunities.

In 2017, the bank, in collaboration with leading US Property and Asset Managers, acquired the headquarters of Amazon Robotics, in Boston, US. In 2016, the bank identified and invested in a $78 million Multi Family Housing property in Montgomery County Maryland, US, a $29.5 million Joint Venture (JV) to develop a prime Purposebuilt Student Accommodation (PBSA) project in Southampton, UK, and in the development of a GBP 148 million scheme that will offer 458 residential apartments in Manchester, UK. In addition to its extensive experience in real estate, Ibdar is recognised as a major player in the aviation sector, having successfully executed $277 million of aviation transactions since the establishment of the bank’s aviation platform in 2014.

Amongst these transactions include the award-winning deal with multinational aerospace and transportation company Bombardier, where Ibdar pioneered the first ever Shari’ah-compliant transaction in Africa’s aviation sector’s history. We are also focusing on Sukuk and more capital market instruments. In terms of our investment footprint, we are looking to further expand our portfolio in the UK and the US and are currently exploring the European markets.

What is the focus of the bank in 2018?
Ibdar will reach out to investors across the globe. Technological advances have completely changed the relationship customers have with their banks and this does not only apply to retail banking only. Ibdar is exploring fintech opportunities through the Central Bank of Bahrain, which has established one of the first sandboxes in the region, allowing the financial sector to test new tools and services.

Fintech will provide the bank with access to new investors and allow us to serve them better. The bank is currently working on building the capability in order to sell its products through fintech rather than face to face to facilitate global reach and attract international investors. Ibdar Bank is working towards becoming the world’s first fully-digitised Islamic Investment bank that will cater to the needs of the Global Islamic Digitised Economy (GIDE).  

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