Branches can still remain the main delivery channel for Islamic banking, but CIMB warns that regulators must also know how to regulate things such as Skype and Facebook banking.
ABF: Which do you see as the main delivery channel in pushing forward with the development of Islamic banking? Is the branch still seen as the principal delivery channel or will Islamic finance/banking move towards the internet, mobiles, perhaps even call centres? Why do you think so?
Badlisyah Abdul Ghani, Executive Director and Chief Executive Officer, CIMB Islamic
The state of play of a particular financial market in a particular jurisdiction determines the main delivery channel. In a market where regulation is still rudimentary with basic market infrastructure and customer sophistication - brick and mortar takes center stage with branches being the main delivery channel.
Where there is advance regulatory readiness, market infrastructure and customer sophistication, we would see technology taking a more prominent role as a principal delivery channel. Regulators must know how to regulate things such as Skype and, Facebook banking, for instance. Consumers must be technology savvy and have affordability and capacity to access technology.
Of course even in markets where technology plays an important part in everyday life, branches can still remain the main preferred delivery channel for consumers. As such, Islamic banks must approach this dynamically and proactively. Both methods are able to help push the development of Islamic finance.
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