Wednesday, October 21, 2020
Editor's Pick Could going digital be the shot-in-the-arm for Libya’s ailing Shariah finance industry?

Could going digital be the shot-in-the-arm for Libya’s ailing Shariah finance industry?

Described by some as dead in the water, Islamic banking never took off in a meaningful way in war-stricken Libya despite efforts to convert its entire financial system to comply with Shariah laws. But one bank is attempting to change the tides with digital offerings.

Assaray Trade and Investment Bank (ATIB) is one of a handful in the State of about 6.3 million people offering Islamic financial services, albeit on a window basis. Serving over 50,000 customers, the bank however is looking to bolster its market share and Islamic banking capabilities by appealing to the nation’s urban population with new online products.

The 23-year-old bank, which is undertaking a digital transformation in a bid to be a forerunner of the Libyan banking industry (and North African region), is understood to be working on introducing a new suite of digital products for the retail and corporate segments.

To assist it in its journey, ATIB has engaged Swiss software company Temenos to drive its digital transformation using the latter’s solutions.

“Deploying Temenos’ cloud-native, cloud-agnostic technology will allow us to benefit from rapid return on investments and reap the benefits of remarkable efficiency gains and cost savings,” the bank’s general manager, Farouk Laabidi, shared, adding: “This partnership marks a significant step forward in our journey toward digitalization and, most importantly, means we are better able to meet the evolving needs of our customers.”

The two solutions to be implemented are Temenos Infinity and Temenos Transact. Jean Paul Mergeai, the managing director of Temenos’s Middle East and Africa operations, explained that its Islamic banking solution and ‘model bank’ approach would ensure an optimal timeframe for delivery for ATIB to realize the benefits of its new end-to-end digital platform.

Digital products are only one part of ATIB’s digital strategy. The bank is also adopting a customer-centric approach and is working on enhancing the experience of its customers. Last year, it rolled out biometrics-enabled mobile onboarding of customers. And there are plans for further upgrades and enhancements.

It is hoped that such digital-driven initiatives could lead to substantial strides in advancing Islamic financial products in the war-torn nation, which have so far gained little traction due to a multitude of factors including political instability and flawed infrastructure. Almost a decade ago, Libya passed a law prohibiting Riba in transactions and mandated all its banks to become fully Shariah compliant. But without a proper strategy nor official timeline, the North African’s country’s dream to become a Riba-free financial system has been deemed a failure.

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