An Exclusive Interview

AMMAN MUHAMMAD – CEO of FNB Islamic Banking

The ‘new’ democratic South Africa fielded a number of Muslim members of Parliament and a number of dedicated freedom fighters that quietly played significant roles in ensuring the collapse of the Apartheid system.

While Muslim numbers are considered to be marginal when compared to the country’s total population, the size of this constituency should not be confused with their affluence and influence.

In any case, Muslims continue to play an important role in South Africa and not just in politics, but famously in the sports field, medicine, education, philanthropy, academia, media and in economics. There are no formal statistics that precisely specify religious followings in South Africa. However, based on social, community and Islamic theological estimations; the number of Muslims is approximated to be between one and a half to two and a half million people, roughly accounting for two percent of the total population of the country. Here once again, it is not the volume but rather the value of contribution that this community makes towards the development of the nation.

Given the constitutional freedom that South Africa affords its citizens, Muslims are free to practice their faith free from prejudice and persecution and it is against this backdrop that Islamic banking took root as a credible niche banking alternative to mainstream conventional banking.

Islamic banking has been around for nearly 20 years. South African Islamic banking industry would be considered as an emerging Islamic financial market by global standards. However, recent legislative and potential regulatory enhancements will see South Africa steadily advance towards becoming an advanced Islamic financial market, firmly establishing itself as Africa’s predominant Islamic financial services market.

LEADING ISLAMIC WINDOW OF A CONVENTIONAL BANK IN SOUTH AFRICA HAS ITS OWN CHALLENGES. WHAT IS YOUR EXPERIENCE OF DEVELOPING FNB ISLAMIC AS A PREMIER BRAND NOT ONLY IN SOUTH AFRICA BUT ALSO IN THE REGION?

First National Bank, commonly referred to as FNB, is the oldest bank in South Africa, and its roots can be traced back to 1838. When looking at FNB’s history, two things, in particular, stand out. The first is a story of survival – different circumstances in South Africa have posed many great challenges in our history, all of which FNB has successfully met.

This track record provides a solid foundation for our future challenges. The second is a story of people – our history has always been firmly influenced by the needs of the people we serve.

The Acacia tree in our brand logo is a suitable representation of our history. Our roots run deep in South Africa, and we have grown thanks to our commitment to serving the needs of our clients and communities. This is evident in the fact that FNB was the first of the large four banks in South Africa to open an Islamic banking window and offer Islamic banking to whomever chooses this banking option, irrespective of their faith, and is not exclusive to South Africa’s minority Muslim population.

Islamic banking products can be found in each one of the franchises that make up the Group entity known as FirstRand Bank. FNB is a part of this banking group.

In totality, the banking group offers a full spectrum of Islamic banking and financial service offerings, all of which fall under my leadership.

This offer includes Islamic retail and commercial banking – offered through the FNB brand, Islamic corporate and merchant banking services – offered through the RMB brand, Islamic vehicle and equipment finance – offered through the WesBank brand and Islamic trusts and wills and bespoke Islamic equity trading options – offered through our Wealth & Investments division.

FNB Islamic Banking was not always the premium brand that it is today. We worked hard at creating the awareness of this as a niche banking alternative amongst potential customers and amongst key FirstRand Bank stakeholders. Once the required awareness was established across the board, I was able to drive home core Islamic banking education which essentially enhanced the overall Islamic banking value proposition.

THE  ACACIA  TREE IN OUR BRAND LOGO IS A SUITABLE REPRESENTATION OF OUR HISTORY. OUR ROOTS RUN DEEP IN SOUTH AFRICA, AND WE HAVE GROWN THANKS TO OUR COMMITMENT TO SERVING THE NEEDS OF OUR CLIENTS AND COMMUNITIES. THIS IS EVIDENT IN THE FACT THAT FNB WAS THE FIRST OF THE LARGE FOUR BANKS IN SOUTH AFRICA TO OPEN AN ISLAMIC BANKING WINDOW AND OFFER ISLAMIC BANKING TO WHOMEVER CHOOSES THIS BANKING OPTION, IRRESPECTIVE OF THEIR FAITH, AND IS NOT EXCLUSIVE TO SOUTH AFRICA’S MINORITY MUSLIM POPULATION.

ISFIRE HAS GLOBAL DISTRIBUTION AND OUR READERS COME FROM ALL OVER THE WORLD. TELL US ABOUT YOUR PERSONAL APPROACH TO ISLAMIC FINANCE. AS CEO OF FNB ISLAMIC BANKING AND PRIOR TO THAT IN YOUR ILLUSTRIOUS CAREER, HOW HAVE YOU CONTRIBUTED TO THE DEVELOPMENT OF ISLAMIC FINANCE?

My interest in Islamic banking and finance really started to blossom while I was working at Deloitte, while in the Financial Institutions Services Team, where I was involved in audit, advisory and consulting services.

We were once engaged to investigate alternate funding mechanisms for a Non-Governmental Organization. After exploring several failed conventional alternatives, an Islamic underlying structure was eventually short-listed for further investigation. It was during this investigative period that I began exploring the wider world of Islamic banking. Shortly thereafter, my curiosity turned into an obsession and within no time I had established a full-fledged Islamic Financial Institutions Advisory Services” business that offered a comprehensive range of Islamic banking services, focusing on risk, compliance and governance-related matters.

IN ANY CASE, MUSLIMS CONTINUE TO PLAY AN IMPORTANT ROLE IN SOUTH AFRICA AND NOT JUST IN POLITICS, BUT FAMOUSLY ON THE SPORTS FIELD, MEDICINE, EDUCATION, PHILANTHROPY, ACADEMIA, MEDIA AND IN ECONOMICS. THERE ARE NO FORMAL STATISTICS THAT PRECISELY SPECIFY RELIGIOUS FOLLOWINGS IN SOUTH AFRICA. HOWEVER, BASED ON SOCIAL, COMMUNITY AND ISLAMIC THEOLOGICAL ESTIMATIONS, THE NUMBER OF THE MUSLIMS ARE APPROXIMATED TO NUMBER BETWEEN ONE AND A HALF TO TWO AND A HALF MILLION PEOPLE, ROUGHLY ACCOUNTING FOR TWO PERCENT OF THE TOTAL POPULATION OF THE COUNTRY.

SOUTH AFRICA HAS A NUMBER OF ISLAMIC FINANCIAL INSTITUTIONS. HOW DO YOU POSITION FNB ISLAMIC BANKING IN THE OVERALL LANDSCAPE OF IBF IN THE COUNTRY, IN THE REGION AND GLOBALLY?

We like to position ourselves as a “One Stop Islamic Financial Services Shop”, where all of our customers’ Islamic financial needs are catered to.

The time, effort and research that went into the development of our core value proposition is what sets us apart. We have depth built into what is being offered to our customer.

Over and above the expected attributes that one normally expects from a quality banking offer, our core Islamic banking proposition also incorporates a world-class rewards programme. An FNB Islamic banking customer is afforded all the required benefits that a conventionally banked customer gets and it allows for convenient accessibility to funds using sophisticated yet user-friendly digital banking applications.

We take innovation to the next level by incorporating the services of our in-house MVNO (mobile virtual network operator) through FNB Connect, which, in my opinion is the only bank that I know of, that offers a customer a bank branded cellular sim card and competitive data options.

I believe that we have responded to our customers’ needs by delivering on a Shari’ah-compliant banking offer that formally replaces the need for conventional banking products.

WE LIKE TO POSITION OURSELVES AS A “ONE STOP ISLAMIC FINANCIAL SERVICES SHOP”, WHERE ALL OF OUR CUSTOMERS’ ISLAMIC FINANCIAL NEEDS ARE CATERED TO. THE TIME, EFFORT AND RESEARCH THAT WENT INTO THE DEVELOPMENT OF OUR CORE VALUE PROPOSITION IS WHAT SETS US APART. WE HAVE DEPTH BUILT INTO WHAT IS BEING OFFERED TO OUR CUSTOMER.

LET US ASK AN EASY QUESTION TO MAKE THE INTERVIEW LIGHTER IN TONE AND CONTENTS. WHICH SPORTS DO YOU PLAY AND ENJOY THE MOST? AND WHY?

I try to play golf. I’m not the best at it but am always trying to find time in my hectic diary to justify a round or two. I think that golfing legend Arnold Palmer captured it aptly by noting “There is no king of golf. Never has been, never will be. Golf is the most democratic game on earth. It punishes and exalts us all with splendid equal opportunity”. I’m fortunate in that two of my sons have taken up golf. In the past my wife forbade me from playing and now she encourages me to play more golf with my sons. It’s amazing how well this has worked in my favour.

Furthermore, golf allows for a relaxed and comfortable environment when dealing with customers. Fortuitously, we are seeing more and more of our customers taking up the game. This allows us to interact and deal with our customers on the course. Remember a bad day on the golf course is better than a good day in the office.

DO YOU THINK SPORTS ALSO HELP IN BUSINESS BY WAY OF NETWORKING AND IDENTIFYING WIDER OPPORTUNITIES?

Yes, most certainly. As noted in my previous response, sports and sporting events have a universal appeal. It creates a relaxed and comfortable environment, where bankers and customers alike can relate to each other in a different relaxed atmosphere, infinitely different to that of the boardroom.

Customer meetings outside the office allow for a greater level of socializing and in that environment, I find customers tend to be much more comfortable in discussing their personal and business banking requirements.

FNB ISLAMIC BANKING IS AN AWARD-WINNING BANK, WITH ITS MOST RECENT SUCCESS AT GLOBAL ISLAMIC FINANCE AWARDS 2018 HELD AT SARAJEVO ON SEPTEMBER 29. HOW WOULD YOU EXPLAIN YOUR SUCCESS AND RECOGNITION?

Goals and objectives never materialize by themselves. They require strategically crafted plans, which, in turn require meticulous execution.

As we know well, nothing happens without the blessing of the Almighty, and then, meticulous execution requires a complete buy-in from the entire team. It is only when the entire team comprehends this collective dream, do we witness the magic come to life.

It is always easier said than done and in our case, we’ve had to re-invent our brand, re-design our product-set and infuse a sense of trust into our customer base all while on-the-move.

ANOTHER LIGHT QUESTION. IF YOU HAVE TO CHOOSE BETWEEN NELSON MANDELA AND MAHATHIR MOHAMED, WHO WOULD BE YOUR PICK, AND WHY?

This is no light question. You are asking me to choose between globally respected and admired icons. Being a South African, I am forced to be a little bit more biased towards the beloved father of our hard-fought democracy, Nelson Mandela.

Mandela fought for those very ideals and principles that Islam holds sacrosanct- the idea of freedom, the fight against oppression and basic human dignity.

He spent his life in the servitude of his people and at great personal cost to his own personal freedom and family, which, resulted in him being sentenced to 27 years in prison.

He chose to fight for the freedom of his people and in the end, was able to negotiate a peaceful settlement, saving South Africa from a potentially deadly civil-war.

Today, we proudly celebrate the oldest statesman in the world in the form of Mahathir Mohamed and the memory of the great Nelson Mandela who would have been 100 years old had he lived.

THE WORLD IS FAST BECOMING ORIENTATED TOWARDS THE USE OF SOCIAL MEDIA. WHAT ROLE CAN SOCIAL MEDIA PLAY IN CREATING AWARENESS AROUND ISLAMIC FINANCE AND CREATING A VIBRANT RETAIL MARKET FOR ISLAMIC BANKING IN SOUTH AFRICA?

The world of social media is rising at an astonishing pace. However, boosting your brand awareness via social networks is about marketing to the right people, through the right channels. It means you must find the right social media channels where your target market is.

The advantage of social media, unlike traditional means of advertising, is that it is instant and allows you to engage with your target market.

Social media can play a massive role in creating awareness of Islamic finance, as it has a wider reach and can target a market who are tech savvy and are engaged online. The South African Muslim community certainly meet these criteria and at best can be described as a digitally savvy market.

The off-shoot of this opportunity is that you can create ‘word of mouth’ which is earned media, where your customers spark conversations on the topic of Islamic finance and banking. This not only creates awareness between friends and family, but also makes a viral conversation.

Valuable customer insights can be gained from such conversation and can help drive Islamic banking offerings to be more customer-centric based on their needs.

WHAT IS A TYPICAL DAY LIKE FOR AMMAN MUHAMMAD? HOW DOES IT START AND HOW IT ENDS?

A typical day in my life can best be described as long and rewarding.

When I’m not travelling, my day normally starts off with the performance of my Fajr prayer, thereafter a healthy breakfast with the family and then me taking my children to school. I have five sons, two of whom are at university and the other three are at school. The school round is an important morning ritual and allows me to spend precious ‘alone time’ with my kids while driving them to school.

I normally reach office early, around 7:30 am, usually an hour before anyone else. This time allows me to tackle those issues that require quiet reflection and contemplation.

Once the team is in the office, the energy picks up and before you know it, the day fast approaches an end. But not before having to deal with a variety of matters that range from segmental to individual business unit agendas and a fair share of external issues.

My day also involves dealing with a wide range of key stakeholders, from customers to employees, Shari’ah scholars, the media, industry bodies, community organizations, and many more. In contrast to other executives, I am required to engage with all of them. On top of that, I have to build the business strategy and be the internal and external face of the organization through good and bad times.

ON A PERSONAL NOTE WHO HAS INSPIRED YOU THE MOST AND WHY? HOW HAS THIS INSPIRATION SHAPED YOUR APPROACH TO ISLAMIC BANKING?

Justice in all its forms, whether it be social, political or economics related, are among the core teachings of Islam. This is best illustrated in the character of none other than that of our dear Prophet Muhammad saw (PBUH).

In my earlier days, as I researched the topics of Islamic trade, finance and banking; I was completely enamored by the role that justice and equality played in this part of the Islamic teachings. Since trade and economics play such a crucial element of everyday life, and particularly in my own life at that time, (I worked as a financial services institution auditor), I had been drawn into educating myself more, mysteriously guided by the precious financial and business examples and illustrations that had been left by our beloved Prophet Muhammad saw (PBUH) so many years ago.

I strongly believe that this magnificent trail of discovery led me to the path that I am currently on. As an Islamic banker, I am convinced that deepest inspiration was presented to me through those teachings left behind by our noble Prophet Muhammad saw (PBUH).

ANY NEW PLANS FOR FNB ISLAMIC BANKING?

FNB Islamic Banking has already experienced an amazing transformation, and has fast metamorphized into a Group-wide business which now offers Islamic banking across the Bank’s key segments, namely, retail, commercial and corporate Islamic banking.

We have since also introduced Takaful, Islamic wealth and investment services. In doing so, we have closed the loop in terms of a comprehensive offering of core Islamic products and services that a customer would normally require.

Apart from South Africa, we are also operational in Botswana and aim to launch Islamic banking in other key Sub- Saharan geographies as well.

We continue to innovate in the product space and have plans to launch exciting products in both the retail and commercial environments. As far as channel is concerned, we have struck a healthy balance between human and digital customer interactions.

Given the fast pace that the banking world is moving at, we continue to set the pace and are dynamic in the digital space, our digital applications are setting the benchmark in the digital Islamic banking space.

I AM CONVINCED THAT DEEPEST INSPIRATION WAS PRESENTED TO ME THROUGH THOSE TEACHINGS LEFT BEHIND BY OUR NOBLE PROPHET MUHAMMAD SAW (PBUH).

WHAT WOULD BE YOUR MESSAGE TO THE GLOBAL ISLAMIC FINANCIAL SERVICES COMMUNITY, PARTICULARLY THE YOUTH?

I am particularly drawn to the notion of promoting Islamic finance as the catalyst in developing and coordinating an integrated approach focused on the promotion and development of entrepreneurship and small businesses. We, as Islamic finance practitioners, need to establish an enabling environment that supports their growth and sustainability.

In an environment like ours, in Africa, self-sustainability is the key to radically transforming a sluggish economy, by forcing an effectively driven enterprise development programme promoting entrepreneurship using Islamic finance. As such the Islamic finance strategy should be targeted and easy to access.

This sector is critical in addressing our continent’s key developmental goals, which ultimately include the concept of delivering sustainable livelihoods, reducing crippling unemployment and addressing the growing inequality gap, which is continually widening. There are vibrant economic business activities that need support to graduate from survival to sustainability and Islamic finance techniques can be effectively deployed to close this gap.

My message is simple, Carpe Diem. Seize the day by seizing the opportunity! The only true way to get going is by doing. You don’t have the luxury of time by sitting around waiting and hoping that someone will eventually come along to help you execute on your ‘big’ idea.

“Perfect is a curse. Innovation is messy. Test, learn, and improve.” – Syed Balkhi