Islamic Banking

Financial institutions are transforming themselves in order to address emerging market challenges and optimize their offerings for greater cost efficiency and improved performance. Islamic banks are no exception.

To offer differentiated customer service, scale their operations to meet global competition, and grow market share, Islamic banks are actively innovating their products and business models to comply with Sharia laws and address risks specific to Islamic banking.

• Analyzing and managing credit, market, and operational risks in Islamic banking products from the Islamic Financial Services Board (IFSB) perspective and risk management best practices
• Developing approaches and models for measuring exposures, default probability, and collaterals for Sharia-compliant financing and investment instruments
• Developing frameworks and measurements for operational and market risks
• Developing risk management processes for profit sharing, loss sharing, and profit and loss sharing Islamic banking products
• Assessing readiness for Basel II, IFSB guidelines, and Central Banking guidelines. The assessment covers data gaps, business gaps, policy, governance, and organization structures
• Defining RCSA and KRIs for operational risks
• Building an appropriate risk and control library for operational risk and obligation and control library for compliance
• Developing and implementing compliance plans and monitoring programs
• Assisting banks to comply with regulatory and pillar II requirements (ICAAP) of Basel II, with training workshops in analysis, risk assessment, and risk mitigation in Islamic banking products, credit derivatives, risk analytics, ICAAP, and IFSB/Basel II

We have developed baselines for risk management approaches for financing and investment instruments, including risk control and obligation libraries for operational risk and compliance.

Our consultants help Islamic banks achieve the desired level of maturity in their risk management functions; devise architecture, frame policies, analytics, and processes; and establish an integrated risk management framework compliant with the Sharia laws.