In Conversation with Abu Dhabi Islamic Bank

[Music] thank you so much good morning everybody and thank you so much for joining us it's another beautiful day at Abu Dhabi Finance week and today we are joined by the one and only CEO of Abu Dhabi Islamic Bank Mr Muhammad abdar Mr Muhammad thank you so much for being with us thank you so much Mike so the main topic that we're going to be discussing uh the next 15 minutes is Islamic finance and when we talk about Abu Dhabi Islamic Bank we're talking about one of the leading banks in the region we're talking about assets over 220 billion so when you look at the Islamic Finance sector overall and especially in the UAE what trends in your mind are shaping this sector very good uh first of all good morning everyone and uh thank you M for having me today um it's a great honor to be speaking at this uh event so uh if I just um take a step back and and look at the The Wider Islamic Universe um I think it's important to um to acknowledge the fact that if I look at growth year on year we've seen that the Islamic Universe has been growing at exponential rate compared to the wider banking industry now uh if we zoom in and what has what are the trends which have recently changed in the Islamic Finance Universe I would POS possibly classify it in a few things and it's also not the divorced from The Wider uh Global Trends number one the use of technology and generative AI has become absolutely important not only in the way we do banking but also in Islamic Finance as well uh number two uh it has come with a regulatory framework which would govern the way we utilize that technology because it's important that as we grow and almost explore new avenues the framework is super important number three at the heart of everything we do I think comes the client I think sometimes we tend to forget the client piece but at the end of the day we are solving for a client outcome everything else is an enabler so going back to your point what are the trends we see in Islamic Finance very simply we're solving for client needs who are now very different from in the past we are supporting them with uh technology and generative Ai and we are ensuring that we're doing it in a Islamic and social and ethical manner to ensure long-term creation of value so let's talk about each of these criteria that you just mentioned and you mentioned the changing consumer and client uh uh requirements to what extent have we seen that postco Co was a huge uh event that reshaped every industry to what extent you think that it has also reshaped the uh Islamic Finance landscape 100% so um if you look at the the phases um in the past um even decades the pace of change has uh has accelerated and shortened right so when we look at how uh we moved fin Islamic Finance from the traditional way of banking to acknowledge to using digital Avenues and then now it's almost like a personalized uh kind of experience so the client's expectation has also changed in that Dynamic and what the clients used to accept in the past is not anymore what they would like to expect and hence the importance of again utilizing I mentioned postco bringing banking to the client then the client actually comes to banking is very important and that's what we're building in the Islamic universe how do you ensure that um the experience of a client when engaging with the is slaming bank is um a very satisfying experience and um one point I think is important to note is that 20% of our clients are actually non Muslims right so it's important to to know that Islamic banking is not only for the Islamic universe but it's starting to be acknowledged as the banking uh because we are uh very keen on ethical banking long-term creation of value and ensuring that we are also very acknowledged of the society as well so we have seen more and more non-muslims actually participating in the Islamic universe as well so let's talk about what's happening in the region of course diversification economic diversification is a Hot Topic and this is something that uh we're seeing multiple GCC uh countries and governments aiming toward diversification do you think that this is something that will support demand for Islamic products yeah 100% so um I would link it back to what we seen in Abu zabia right so um the the aim of diversifying uh the economy is quite visible and um it's part of the national agenda we've seen it also uh in some of the announcements we have seen under the um sustainable framework so whether it's the 2030 or 2050 goal um and the absor is you is a falcon economy as as we have also seen in the past few days and and and we've seen the evolution happening and meaning that um the importance of diversifying channels of growing the economy is quite visible we' have seen Industries like tourism manufacturing health care but also clean energy this is a now very important point which some people not acknowledge that um when we solve for 2030 or 250 goals we are not compromising on Commercial viability but we're solving for an ultimate goal which will also solve for the sustainability framework and what role do you think that Islamic finance will play in sustainability agenda I mean we we have of course green bonds green Su but there are some risks associated with this type of products when it comes to green washing and other so when you look at the opportunities versus the hazards how do you see the role of uh Islamic Finance in sustainability agendas so we are in a very strong situation because Islamic finance and sustainability are actually on on same playing field right we stay for social responsible ethical Banking and creating long-term value and hence if I look at for a deep and specific we are one of the few Banks who actually related a on MSI from from ESG sustainability perspective because it's in the same DNA it's in the same culture so um hence the the solution uh for Islamic Finance um is quite Innovative um you mentioned a few important things green sukuks for example that's an very important product so we were the first uh Bank also to issue green Cooks a couple of years ago um uh and it's important because um what the way banking has been um um almost followed in the past few years uh is now required to be changed in a very few times so look at at hundred of years of way of doing banking needs to be changed in 10 and 20 years only right and and hence there is a lot of intervention required with products which are true value of core Islamic financing but also sove for sustainability goals so let me ask the audience here before we talk about a hot top technology fintech and as well as digitizations so how many of you actually depend fully depend on uh your bank's application on your phone uh rather than going to the branch I'm one of them I do everything online see most of the room here we don't need branches anymore we can do everything online so how are you at adiv investing in this this uh mindset of I want to do everything electronically and I don't want to waste time going to the branch and sitting there and waiting for my queue it's it's a long process fantastic I'm very happy to see the hands up as well so we have a concept called branch in hand right so we are we are our aim is to ensure that we replicate every service you can do at the branch is at the at in your hand basically that's why it's called branch in hand and if you look at our mobile application um we are actually almost there right we're not there 100% yet but everything you do and that's why so many people actually if you ask me when I when I was last in a bench for a transaction was many probably years ago everything can do on your brand Are We There Yet 100% not because the next evolution of the mobile application is actually providing even more personalized experience so when you actually open your application what I see might be different than what you see and what the audience sees because it understands the behavior of the client and starts recommending a a customized experience for your needs and and this is the power again of gen AI right you learn enough about what I need and I I solve the very important equation of providing a product to a client he needs not a product the client wants the bank wants to sell I think that's the important change it's not what I want to sell you but it's what you need exactly yeah so I I've got another question for you before I we ask Mr Muhammad of course the FED is cutting interest rates and so interest rates in the UAE are going lower as well how many of you are looking to take a personal loan a mortgage some kind of borrowing activity next year okay we've got one to okay I'm going to ask this question for you then so is it a good environment to take and borrow money so I think um it's a cycle what and and I think the most important kpis what has happened in the economy we have seen almost double digit growth in financing right so financing needs is driven by the strength of the economy and the health of the country itself so it's not really linked to a a specific level of where rates are today but this health and strength of the economy um that's why even when rates were high we've seen at and a Deep's level we've grown our financing book by almost 19% year on year even with interest rates are at Peak absolutely because we are ensure that the the product offering whether it's Finance or non-f financing is again tailored to a specific need and suitable to the client and and obviously the external environment has helped us a lot in ensuring that we can achieve that so looking at 2025 when you look at Islamic Finance uh landscape what would you like to see as the CEO of Adib um I would like to see Islamic Finance uh playing a much bigger role in terms of shaping the future of the industry not only in the Islamic Finance universe so I think we've been quite active in various forums but I do think there's an opportunity for us to become even more involved in shaping the future of regulations not only Islamic Finance but in the industry the second thing is that we are um uh very good in ensuring that we are providing the products or product Innovation suitable for our clients which is a big plus for us the one thing where I think we can definitely do better is bringing even more standardization and Agility and speed of execution right so that that's something which we have a responsibility as leaders in the Islamic Universe to do there are a lot of forums which we working I think we on the right track to do that 2025 will be very important for us to deliver that you mentioned uh regulations quite a few times during this uh discussion so to what extent do you see that the regulatory environment in UAE for Islamic Finance is way ahead of what we're seeing globally do you think that there's there's some kind of competition happening here when it comes to the regulatory framework 100% And I think the uee is in a perfect situation to lead the Islamic universe so the Ambitions are clear to be the global hub for Islamic banking in the world I think the regulations are supporting that initiatives we are very active working with The Regulators on that and I think we have a perfect opportunity to achieve that goal thank you so much for joining us Mr Muhammad in this fireside chat we wish you the best of luck at Adib and at everything that you do and thank you so much ladies and gentlemen for joining us for this discussion thank you so much [Music]