Mohammed Kateeb- Group Chairman and CEO of Path Solutions.
Q1. FINTECH IS IN VOGUE, WITH HARDLY ANY CONFERENCE, SEMINAR OR ANY PROFESSIONAL GATHERING MISSING OUT A DISCUSSION, DEBATE OR REFERENCE TO IT. AS A TECHNOLOGY FIRM, HOW PATH SOLUTIONS HAS MANAGED TO KEEP ITSELF ON THE FOREFRONT OF ISLAMIC FINANCIAL TECHNOLOGY?
As a strategy, Path Solutions has been investing heavily in R&D and the latest cutting-edge technologies, so when Fintech revolution started years back, we were not surprised by it, but we anticipated it and we were ready for it and we took the clear position of being the main enabler for all Islamic financial institutions to find themselves in the new ecosystem. We were the realists recognizing that Fintechs will not replace traditional financial institutions but complement them in building a global ecosystem.
Q2. PATH SOLUTIONS IS A FULL-FLEDGED SHARIA-COMPLIANT TECHNOLOGY FIRM. CAN YOU EXPLAIN WHAT MAKES A TECHNOLOGY FIRM SHARIA-COMPLIANT?
A banking activity that complies with the Islamic law has its own products, services and contracts that differ from any other banking activity. From a technology point of view, this is translated into procedures and controls built in the platform to ensure transactions are carried out according to the Sharia principles; in addition to having a solid profit distribution engine which provides flexibility in pool definition, profit-sharing schemes, revenue reserves allocation and distribution; supporting all Islamic financing instruments such as murabaha, musharaka, mudaraba, istisnaa, ijarah, and others; and incorporating stringent treasury management tools to reduce liquidity risk.
For the past 25 years, Path Solutions has developed pioneering Sharia-compliant technologies for the Islamic financial services segment. Over the years, we have been expanding and increasing the depth of our set of services to Islamic banks to include digital capabilities to ensure the most comprehensive and innovative suite is offered to them. Our core banking platform is built from the ground up in accordance with the Sharia principles, and serves to streamline an overly complex Islamic banking sector, and we believe it is this that has given us the competitive edge in this arena.
For the past 25 years, Path Solutions has developed pioneering Sharia-compliant technologies for the Islamic financial services segment. Over the years, we have been expanding and increasing the depth of our set of services to Islamic banks to include digital capabilities to ensure the most comprehensive and innovative suite is offered to them. Our core banking platform is built from the ground up in accordance with the Sharia principles, and serves to streamline an overly complex Islamic banking sector, and we believe it is this that has given us the competitive edge in this arena.
Q3. AS AN ISLAMIC TECHNOLOGY FIRM, WHAT KIND OF CHALLENGES YOU FACE FROM LARGE CONVENTIONAL TECHNOLOGY FIRMS OFFERING SHARIA- COMPLIANT TECHNOLOGY SOLUTIONS TO ISLAMIC BANKS AND FINANCIAL INSTITUTIONS?
In a perfect world, we would not have to compete with large conventional technology firms as we consider ourselves unique and different in the segment. We are a pure player and we provide an end-to-end core banking platform in full compliance with the Sharia law, which large conventional players always fail to do. But in reality, these firms spread lots of what we call FUD(Fears, Uncertainty, Disinformation) about the uniqueness of Islamic finance and its specific requirements. We know that Islamic finance is not built into their core systems, but through simple changes on the edge of the system to look and feel as Sharia-compliant, but for the expert eye, this dressing is easy to detect!
BLOCKCHAIN AS AN INFRASTRUCTURE TECHNOLOGY HAS THE POTENTIAL TO BE A DISRUPTER FOR THE FINANCIAL INDUSTRY.
In addition, Islamic banks are always seeking to innovate and come up with new products and services in retail finance, corporate financing, asset and portfolio management, internet and mobile banking, and this requires core banking systems that allow them to support their business processes, improve operational efficiencies, abide by regulatory requirements and build new Sharia-compliant products rapidly. Technology firms with tweaked banking platforms have to align their systems with the guiding principles of Sharia and are not as reliable nor scalable as ours, which has been designed from the ground up based on the tenets of Islam.
Q4. AS A TECHNOLOGY SPECIALIST, WHAT FUTURE DO YOU SEE FOR BANKING AND FINANCE? ARE BANKS GOING TO BE STILL AROUND AFTER 10-15 YEARS?
It is true that the digital disruption is clearly underway while Fintech innovations are reshaping many of the financial services, which inevitably presents a threat to traditional institutions, but also an amazing opportunity. I definitely believe Fintechs will not make banks redundant but will speed the creation of a global financial ecosystem that many players will contribute differently. We will see significant changes in the industry which will force financial institutions to be more customer-centric and efficient, and provide more targeted, secure and intelligent solutions. With technology as the driving force and a key competitive advantage for those in the Islamic banking segment, customers have plenty to look forward to!
Q5. PATH SOLUTIONS IS WINNING MANDATES IN AFRICA, ASIA AND EVEN IN THE AMERICAS. WHAT IS THE SECRET BEHIND THIS PHENOMENAL SUCCESS?
This testifies the inability of our competitors to simply cater to the increasing demand for innovative Sharia-compliant solutions and services that could adapt to local regulations, and a clear recognition from our clients for our pure offering. Our set of services is multilingual, multi-currency, and thus we can offer our solution worldwide, but in the African and Asian markets where innovation and technology are key to engaging the unbanked and lifting billions of people out of poverty, we excel. Besides, we have got our solid references there with a proven track record of successful implementations.
Q6. BLOCKCHAIN TECHNOLOGY I GETTING INCREASING ATTENTION. WHAT IS PATH SOLUTIONS DOING IN THIS FIELD?
Blockchain as an infrastructure technology has the potential to be a disrupter for the financial industry. Large financial institutions, from investment banks to stock exchanges to central banks, are all beginning to work on their own Blockchain-based solutions in order to stay on top of this innovation.
The most obvious and basic use for Blockchain technology is its use as a payment system. These Blockchain transactions are borderless, secure, largely anonymous and their costs are minimal.
Path Solutions already have two projects underway in this area, and we are planning to introduce the Blockchain technology in a set of services that we will announce their pilots with key financial organizations in the coming few months.
WE WILL SEE SIGNIFICANT CHANGES IN THE INDUSTRY WHICH WILL FORCE FINANCIAL INSTITUTIONS TO BE MORE CUSTOMER-CENTRIC AND EFFICIENT, AND PROVIDE MORE TARGETED, SECURE AND INTELLIGENT SOLUTIONS.
Q7.ISLAMIC BANKING AND FINANCE WILL HAVE TO KEEP PACE WITH THE TECHNOLOGICAL ADVANCEMENTS IF IT WISHES TO REMAIN COMPETITIVE. ARE YOU SATISFIED WITH THE USE OF TECHNOLOGY IN THE INDUSTRY? WHAT NEEDS TO BE DONE TO MAKE ISLAMIC BANKS AND FINANCIAL INSTITUTIONS TO BE MORE TECHNOLOGY-ORIENTED?
Innovation is a cornerstone in the development of Islamic finance itself. As such, technological advancements have the potential to play a major role in the Islamic finance industry primarily to improve processes and cost-effectiveness while maintaining Sharia compliance. However, regulatory compliance is a drain on a bank’s technology investment budget, as is the maintenance of legacy systems, and it leaves little capital for developing truly transformational and innovative technologies. This goes a long way to explaining why Islamic banking does not have a reputation for being the most innovative of industries. We are somehow satisfied with the adoption of new technologies by some banks, nevertheless, Islamic banks need to invest more in advanced IT frameworks and digital banking; they need to embrace newer technologies to stay relevant and compete.
Q8. WOULD YOU LIKE TO SHARE ANY FUTURE INNOVATIONS PATH SOLUTIONS IS INVOLVED IN?
Banking has changed in the era of big data; banks have now access to different types of data including different new sources like e-mails, social media information, and video feeds. Path Solutions is currently in its final research phase for introducing the necessary tools needed for handling and manipulating big data. The new technology will contribute to several areas in our platform which includes risk management, analytics, and other major functions. Big data analytics can improve existing processes. Its approach allows for the advanced statistical analysis of structured data, and advanced visualization and statistical text mining of unstructured data. These approaches can provide the means to quickly draw out hidden links between transactions and accounts, and uncover suspicious transaction patterns.
While big data, machine learning and predictive analytics are almost in our pipeline, our next plan is to start using artificial intelligence for smoother, faster and more secure banking operations. As an example, fraud detection is one of the fields which has received massive boost in providing accurate and superior results with the intervention of artificial intelligence. It’s one of the key areas in the banking sector where artificial intelligence systems are bound to excel the most.
Other AI suites such as chatbots work by identifying the context and emotions in the text chat by the human end user, and respond to them with the most appropriate reply. With time, these chatbots collect massive amount of data for the behaviour and habits of the user, and learn the behaviour of the user, which helps in adapting to the needs and moods of the end user.
Chatbots can be extensively used in the banking industry to revolutionize customer relationship management at a personal level.
Q9. PATH SOLUTIONS IN THE NEXT FIVE YEARS? WHERE DO YOU WANT YOUR COMPANY TO BE?
Our target is to be the Fintech of the Islamic finance Industry, and the main technology provider empowering the global Islamic financial ecosystem. We believe technology is rising to be the most strategic component in shaping the future of this industry, and as the number one technology provider for our segment, we see ourselves becoming the true undisputed strategic partner.
Q.10 ANY MESSAGE YOU WANT TO SHARE WITH THE YOUNG PROFESSIONALS IN ISLAMIC BANKING AND FINANCE?
Islamic finance has an amazing unique soul of its own that is completely different than its counterpart, and the only thing that is stopping this industry from realizing its full potential, is the availability of the innovative human capital that understands fully its principles and push to ensure its continuous uniqueness. I ask all of them, especially the young ones, to be innovators and resist the translation of conventional services to Islamic ones. The long-term success of this industry relies on the ability of all of our young professionals to do just this!
Q.11 ON A PERSONAL NOTE, YOU’RE THE ONLY TECHNOLOGY SPECIALIST WHO IS EXCEPTIONALLY VISIBLE IN ISLAMIC BANKING AND FINANCE. WHAT MAKES YOU PERSONALLY SO SUCCESSFUL IN THE INDUSTRY?
I am a passionate person, and for me to do something well, I need to be passionate about it. Early in my career I had the opportunity to work for Microsoft and I climbed through the ranks from an engineer to an executive who ran 22 countries for Microsoft. This was a great experience that created a passion inside me for technology as I saw its impact on people’s lives all around the world. Then I turned my focus to Islamic finance. I understood its principles and its potential very well and I developed a passion for it. These two passions complement each other inside of me and allow me to focus on continuously pushing for technology to have tremendous impact in this industry.
Q.12 OUR READERS WOULD LIKE TO KNOW ABOUT YOUR MANAGEMENT STYLE. HOW DIFFICULT IT IS TO MANAGE A TECHNOLOGY FIRM SPECIALISING IN ISLAMIC BANKING AND FINANCE?
As a leader, I believe that our most important asset in a technology company such as Path Solutions is the people we have; they are our competitive advantage, which makes it also the most challenging part of our company’s management. People are different in personality types, what drives them, what motivates them, and what makes them tick. Therefore, as a leader, you have to understand each individual and customize your management style based on that person.
We are operating in mission-critical environments all around the world, and we need to support our clients 7x 24×365. We must be always on alert and we need to always respond fast. A leader needs to motivate his people to always be focused on this service non-stop!
Our industry is a young industry, and many of our clients operate in developing countries with many challenges including regulation challenges, continuously changing standards, size, capital, and customer base challenges, etc. We need to cater to these banks regardless of size or geography. We need to have staff in the different countries, and a true leader needs to have breadth and depth to manage people of any background.
To do all the above you have to motivate your people and empower them to do a good job, and if you are a good leader, you will always trust that they will!
AS A LEADER, I BELIEVE THAT OUR MOST IMPORTANT ASSET IN A TECHNOLOGY COMPANY SUCH AS PATH SOLUTIONS IS THE PEOPLE WE HAVE; THEY ARE OUR COMPETITIVE ADVANTAGE, WHICH MAKES IT ALSO THE MOST CHALLENGING PART OF OUR COMPANY’S MANAGEMENT.
