It is a high time for Australian Shariah compliant financial service providers to establish an industry association to champion Islamic finance and add value to consumers. A suggested handle could be “Islamic Financial Services Council of Australia” (IFSCA).
The players in the Islamic financial services industry in Australia are sizeable and hence, it will be commercially beneficial to establish an association to provide advocacy and contribute to policy development. As participants in the industry, all organisations involved in Islamic finance would benefit from this proposed industry body.
The Australian Shariah compliant financial services industry has achieved a level of maturity with a wide range of products. Currently, the industry offers products in almost all segments of the financial services market in Australia such as Shariah compliant home finance, wealth management including fund management, equities, unit trust, superannuation, leasing/hire purchase, property trust and so on. These financial services will form a formidable basis for an industry group.
This industry group will provide a platform for marketing and education of Shariah compliant financial services in Australia. It will improve the perception of the market towards the providers of the Islamic financial services and create confidence in the available product suite. Organising marketing and public relations activities would be much cheaper and more effective as a group.
There will be eligibility criteria for membership of this industry group. This will take care of unscrupulous players without proper licensing and compliance program. At the moment, everyone is a provider of Islamic finance and this will put a brake on this phenomenon.
The establishment of this body will be a vehicle for the voice of the Shariah compliant providers of financial services in Australia. The regulators will take better recognition of these providers which will facilitate their compliance and reduce costs. If they had a voice, they could have demanded actions on the taxation report on Islamic finance which was prepared and submitted to the government by the Board of Taxation but went into abyss.
An industry body would be able to perform a number of roles such as making representations to various forums, providing training to industry participants, promoting best practices, coordinating seminars & public forums for information sharing and providing continuous professional development to the industry.
Conducting financial services business in Australia involves various federal and state regulatory authorities including the Australian Securities and Investment Commission (ASIC), Australian Prudential Regulation Authority (APRA), Reserve Bank of Australia (RBA), Australian Competition and Consumer Commission (ACCC) and state fair trading departments. An association of Islamic finance may effectively represent industry position to these regulators for better compliance and reporting.
There are industry groups in the country such as Australian Bankers’ Association (ABA), Financial Services Council (FSC), Financiers Association of Australia (FAA), Association of Superannuation Funds of Australia (ASFA) and so on. It will be good to have one to represent Islamic finance in Australia.