Malaysia has been on the forefront of innovative developments in Islamic finance. In this exclusive interview with Professor Dr. Normah Haji Omar, Director, Accounting Research Institute (ARI), Universiti Teknologi MARA, we explore the role of ARI and its leadership in developing a new field of study in Islamic finance. The interview also brings out the leadership style of ARI’s top personnel in directing innovation and research & development in an academic environment while maintaining a relevance to professionalism and industry.
Professor Dr Normah Haji Omar is always on move. Along with directing a national centre of excellence in academic and professional research in accounting and finance, she is involved in a number of other national, regional and global initiatives. As a pioneer in Islamic financial criminology, she is creating a new discipline in academia, which have great relevance to the sustainable development of Islamic finance. In this interview, Professor Normah shares with us her passion for Islamic financial criminology and her leadership style. The interview also brings out human dimension of the person who has very professionally directed one of the most successful centres of excellence in Malaysia.
Please tell us about Accounting Research Institute (ARI), what is it, what it aims for and what are the different segments within it.
Accounting Research Institute (ARI) is a National Centre of Excellence, located in Universiti Teknologi MARA. ARI is funded directly by the Ministry of Education Malaysia. Established in 2002, initially as a special research interest group, ARI then evolved into a research centre. The research centre further expanded to become a research institute.
Within the institute, there were several research groups namely financial reporting, forensic accounting, corporate governance, public sector accounting, management accounting and Islamic accounting. In 2010, the institute was recognized as a National Centre of Excellence and was asked to drive niche research area of Islamic Financial Criminology. In essence, two research cluster groups – Islamic finance and financial criminology, drive IFC. Whilst Islamic finance research cluster focuses on research projects that could identify new products for the Islamic finance industry, the financial criminology cluster identifies financial leakages that could distort development of the Islamic finance sector. ARI believes that a healthy Islamic finance sector could only be maintained if one continues to develop new products and takes strategic actions to mitigate financial crime within the industry.
Please tell us about Universiti Teknologi MARA and geographical location of the campuses together with their focus area.
Universiti Teknologi MARA (UiTM) is a comprehensive public university with its main campus located in Shah Alam, Selangor, Malaysia. It is the largest university in Malaysia in terms of size and student enrolment. The university has expanded nationwide with four satellite campuses, 12 branch campuses, nine city campuses and 21 affiliated colleges. With this network and over 17,000 staff, the university offers more than 300 academic programmes. It is home to some 172,000 students, who are mainly Bumiputera and some international postgraduate students.
Please share with our readers the courses on offer at the university and how many students do you currently have in them.
As a comprehensive university, UiTM offers more than 300 technology-based programmes varying from business management to medical sciences. Some programmes, such as accountancy, law and engineering, are offered in parallel with professional requirements. In the Shah Alam campus alone, there are 30,000 professional and postgraduate students.
How are you different from other academic institutions like INCEIF in offering Islamic finance courses?
ARI is first and foremost a research institute that was initially “born” within the Faculty of Accountancy of UiTM. As such, there are substantial elements of accounting, auditing and finance being embedded in our curriculum. In tandem with our niche area in Islamic financial criminology, we offer four research-based postgraduate programmes. They are namely: Master in Islamic Finance & Muamalat, Master in Financial Criminology, PhD in Islamic Finance & Muamalat and PhD in Financial Criminology.
Are your courses accredited by Finance Accreditation Agency (FAA)? If not, are you planning to receive their accreditation?
Currently, since our postgraduate programmes are basically research-based, we have not obtained specific accreditation from FAA. At the moment, the local Malaysian Qualification Agency (MQA) accredits our programmes.
Certainly, moving forward we are planning to get our programmes accredited by other accreditation agencies. We will look at FAA for sure. ARI and the university have recently organized road shows in the United Kingdom and the United Arab Emirates. Can you share with the readers what programmes and events were organized and how was the experience?
We are much focused to drive our research agenda in Islamic financial criminology (IFC). IFC is indeed a new research area pioneered by ARI. With the IFC concepts, we strongly believe to develop a sustainable and prosperous Islamic finance industry. We need to focus not just on the aspect of creating new Islamic finance products, but also to protect the industry by understanding what causes financial leakages and to find ways to mitigate them.
Our recent visits to UK and UAE were aimed at promoting and sharing the concepts of IFC with scholars and practitioners there. As such, we organized an international conference on IFC at the University of Oxford; training programmes on Islamic finance and financial criminology at Edinburgh, Glasgow and Liverpool; visited the Economic Crime unit of the City of London Police, and signed an MOU with University of Bolton. In the UAE, we signed an MoU with Zayed University and organized a seminar on IFC and social enterprise.
Also share with us the agreements of corporations signed during the visit to various institutions including the Oxford University.
ARI aspires to become an international player by promoting our niche research agenda in IFC. To signify our effort and cooperation, we have signed various letters of intent, MoUs and MoAs with many collaborators. Among our recent international research collaborators include: Oxford Centre for Islamic Studies, University of Teesside, University of Bolton, Glasgow Caledonian University, Durham University, Southbank University, Trakya University (Turkey), Burgas University (Bulgaria) and University of Tunis (Tunisia).
ARI also received an award at the Global Islamic Finance Awards held in Dubai in October 2014. What does that mean to you?
GIFA 2014 recognised ARI as “Best Education Provider in Islamic Finance” in their last annual awards in Dubai. This global award was just timely for ARI as we were beginning to produce graduates for our postgraduate programmes in Islamic finance and financial criminology. Following the extensive media coverage of GIFA 2014, we received a lot of enquiries for our postgraduate programmes from prospective students. The Ministry of Education put up a three-month-long Exhibition Corner at the Ministry and one of the main attractions was ARI’s GIFA Award 2014.
ARI is best known for its pioneering role in developing Islamic Financial Criminology as an academic and professional discipline. Please share with us the latest developments in this field.
Islamic Financial Criminology is indeed a pioneering field. The term was initially mooted by the Ministry of Education in 2010 when ARI was recognized as the Ministry’s Higher Institutions’ Centre of Excellence (HICoE).
ARI was tasked to drive a new niche research agenda that takes into consideration, two very important domains: Islamic finance and financial criminology. As Malaysia aspires to be the global hub of Islamic finance, ARI has been entrusted to carry out relevant research projects that could be used to spearhead the development of the Islamic finance industry in the country. As an academic institution, we are producing and training relevant human capital for the Islamic finance industry. Through our research projects, we have identified several new products to spearhead the development of the industry: Islamic microfinance; corporate waqf; Islamic philanthropy; Islamic social enterprises and Shari’a audit. In addition, we have also developed tools to mitigate financial leakages such as corporate integrity system, anti-money laundering and counter-financing of terrorism and fraud risk indicators.
Please share with our readers your collaboration with the Amanah Ikhtiar Malaysia and what are the aims.
Amanah Ikhtiar Malaysia (AIM) is an agency set up by the Malaysian government to facilitate entrepreneurs who are engaged in micro-businesses, by providing them finance. Originally premised on the Grameen Bank concept introduced by Professor Yunus in Bangladesh, AIM adopted the Islamic finance principles to finance small entrepreneurs.
This was the dawn of Islamic microfinance in Malaysia. Essentially, AIM focuses on its role as a financier and one of its main key performance indicators or KPIs is its ability to recover the money lent.
From our research engagement with the micro-entrepreneurs, we found that one of the greatest challenges faced by them is related to supply chain issue – either marketing their products or services to end users or getting reasonably-priced raw materials for their businesses. ARI approached a large hypermarket – Mydin Holding – in Malaysia and linked it with the micro-entrepreneurs to address the supply-chain issues. Through the three-way collaboration of AIM, Mydin and micro-entrepreneurs, the Islamic microfinance businesses became more sustainable. The main aim of our collaboration with AIM and Mydin was to facilitate the micro-entrepreneurs to be successful and profitable in their businesses. In addition, ARI conducted financial management training for these entrepreneurs.
In the end, our research outcomes are not just journal publications, but more importantly, we help the entrepreneurs improve their quality of life. This is in line with the government’s agenda for economic development.
What are your research interests, and how do you balance your research with your managerial and other responsibilities?
My research interest is in the area of financial criminology. Financial criminology is a study about understanding financial crime – why and how it happens. In the context of Islamic finance industry, it is important and relevant to understand and apply the financial criminology concepts. It is the realization of this need to integrate Islamic finance with financial criminology that ARI embarked on its research in Islamic financial criminology. A strong Islamic finance sector should mitigate the possibility of financial crime within the industry.
As a research institute, we have premised our activities around the Islamic financial criminology agenda. We network or collaborate with other institutions or agencies that are involved with either Islamic finance (e.g., Islamic banks, waqf & zakat agencies, Islamic organizations) or financial criminology (e.g., police, customs, central bank, anti-corruption agency). This helps us to ensure that our research outcomes are relevant, useful and have an impact on the community and industry.
What are your thoughts on the current development in Islamic banking and finance both in Malaysia and globally.
Islamic banking and finance is still relatively small compared to conventional banking. Nevertheless, it has great potential to drive the economic development agenda of the developing countries of the world. This is because it is involved mainly with asset-backed activities instead of liability-backed. The industry must also continuously develop new products.
To ensure sustainable development, we need to be weary of possible financial leakages that could hit the industry. Therefore it is crucial for Islamic financial institutions to pay attention on areas related to financial criminology.
Please share with the readers a typical day of Professor Normah, how it starts and what are must on the to-do list on a daily basis.
At ARI we discuss, strategize and carry out our research work as a group. We focus on output and outcome. This is in line with what is expected of us by the Ministry of Education. As much as possible, we ensure that our individual goals are in congruence with the goals of ARI.
In a typical day, I have a good early breakfast at home. I come to the office at 8 am and leave normally at 6 pm. One of the musts “on the to-do” list is to start my day at the office by reading a motivational or leadership book for at least 20 minutes a day. This is important so that I have a positive attitude every day. This has become my habit for the past 30 years. Usually, I use lunchtime to meet up with my staff, fellows and research collaborators. Through informal lunch discussions, we are more relax and usually able to think of viable strategies to solve operational issues. I meet my masters and PhD students on a weekly basis to discuss research progress. Their PhD projects are basically premised on our niche area of Islamic financial criminology.
I have a good and close relationship with my two deputies and research fellows at ARI. As much as possible we make decisions together as a group. Communication channels include emails, WhatsApp messages and blogs. I personally maintain and administer ARI’s blog. This is a good form of record-keeping and documentation. We organize workshops and training at ARI on subjects related to Islamic financial criminology on a weekly basis. Participants include the general public and other external stakeholders. I normally do not take home office work. At home, I just enjoy my family.
At what place are you happiest?
I lead a very simple life, in which ARI features very significantly. I believe that to make ARI successful, I must help people in ARI (students, staff, and research fellows) to succeed. When they see that the research outcome will first and foremost benefit them, they will work harder to achieve them. In a nutshell, I am happiest when I see my people achieve their goals and dreams. Like parents, a leader should always want to “produce” someone who is better than him or her.
