Dr. Mohd Daud – Executive Chairman, Amanie Group Of Companies
“WHEN YOU ARE SELF-EMPLOYED AND WHAT MORE WHEN YOU ARE THE EMPLOYER YOUR MIND-SET NEEDS TO CHANGE. WELL, BUILDING A HOUSE AND A TALL SKYSCRAPER IS NOT THE SAME RIGHT?”
This issue of ISFIRE carries the first-ever cover story we have run over a Shari’a scholar. Datuk Dr Mohd Daud Bakar is a Shari’a scholar of international repute who has distinction of being one of the most influential Shari’a entrepreneurs of present times. We trust that our readers will not only find this exclusive interview of great interest but also of immense help in understanding Islamic banking and finance and the role of Shari’a advisory within it.
Please tell us about Amanie Group and how it came into being.
In 2005, I decided to pursue my dream of forming my own Shari’a advisory company. I left the International Islamic University of Malaysia, where I had served since my graduation. When I left the University, I was the Deputy Vice-Chancellor. So, yes, it was a difficult choice to make. But I reminded myself that courage changes our world for the better… not fear. I was convinced – though I was equally nervous and worried – to leave the University, which provided me with fixed income and safety net for the last 15 years. But for my potential to further expand, I knew I needed to step out of my comfort zone.
Truth be told that I had started dreaming of setting up my own Shari’a advisory company since early 2004. When the time was right – normally this is due to both push and pull factors – I decided to resign and set up Amanie Advisors the same day I left the university campus. Well, the early bird catches the worm, right? To be precise, my endeavour into the world of entrepreneurship began on 1st April 2005. There was no lapse whatsoever between my career as a government employee and as an entrepreneur, as everything was well planned to jump from a big ship to a small ship in the middle of a rough ocean. For me, the journey had just begun. But I knew in my heart that thinking and dreaming big is a must. Though fairy tales don’t come true, dreams do.
The first set up was in Kuala Lumpur and two years later, I ventured into the Dubai International Financial Centre (DIFC). Alas, timing was not on my side because Lehman Brothers had just collapsed, literally about two weeks after I got the incorporation certificate from DIFC. Everything was on hold graduating with flying colours. But now I know why entrepreneurship is known as the School of Hard Knocks.
Motivated by the great demand for Islamic finance advisory, I then established Amanie Advisors in many other cities of the world to spread our Shari’a advisory capabilities. While some offices have performed well, others succumbed to failure. Any regrets? I don’t think I should wallow in self pity, as I have signed up for the entrepreneurship contract for life. I need to always invest in passion equity (plus money equity). Show me a person with outstanding success, and I’ll show you a person who’s driven by his passion.
After a few years in this area, I noticed that there is a well-connected nexus between Islamic finance and other services, such as training, media, big data analytics and fund management, as well as real economic transactions. This motivated me to set up a few other companies in many respective fields, doing something else, away from Shari’a advisory services. Again, I embraced the practice of stepping beyond my comfort zone. That was how Amanie Group was born into this world.
Datuk Dr. Mohd Daud Bakar is much bigger than Amanie. Please tell us about Dr. Mohd Daud Bakar, the Shari’a scholar. Our readers will in particular like to know about your family background, education, and academic and professional career.
I am a Shari’a scholar by training and profession. At the age of 13, I enrolled or rather I was enrolled into an Arabic school in my hometown in Kedah (Northern state of Malaysia, which is known as the paddy bowl of Malaysia). It was done by ‘force’ (against my own wishes) and I enrolled out of respect for my parents, who were adamant about me going to an Arabic and Islamic school. I felt left out, as all my friends were rushing to join the mainstream secondary schools. Surely, at that time, being young, I had the urge to join the bandwagon. But thinking back about it, I think my parents were right all along. Following the herd will of course get you somewhere, but will it get you where you want to be? That’s the million-dollar question.
Anyway, I belong to a low income family. We barely had any surplus cash for more than 2 to 3 days. I worked hard in school and I also worked hard outside school to earn some side income to help my family of 5 siblings. The bad and good news is that I am the eldest of the five. But truly, responsibilities are best learned at a young age.
When I was awarded the scholarship to pursue Shari’a studies at Kuwait University, everything changed for the better. I now had the opportunity to study Shari’a in a more structured manner and in good quality Arabic. More interestingly, I was also able to send some money back home to alleviate my family’s financial status. Now, they could survive with one month cash reserve. Not bad at all. Remember always, where there’s a will, there’s a way.
I was later awarded the Malaysian scholarship to pursue my PhD at the University of St. Andrews, United Kingdom, and I chose an area of Islamic legal theory for my thesis. Honestly, I think I am more an Islamic legal theorist than a Shari’a advisor to Islamic financial institutions. I have published many articles on Islamic legal theory thus far.
Upon returning home from my PhD, I enrolled into a Bachelor’s degree programme in law on part time basis. After a stint of 6 years, I completed the study. Well, it was one challenging journey, to say the least. I nearly exceeded the allowable maximum duration but nonetheless, I crossed the finish line. However, that said, I reckon I am the only Malaysian Shari’a scholar who has a degree in both Shari’a and conventional law. This dual legal knowledge has helped me tremendously in shaping my thinking process in dealing with financial and commercial matters. Being able to see both sides of the coin has allowed me to be more lucid in my thinking.
My career as a Shari’a advisor started in 1994, immediately after coming back from my PhD. During the formative period of Islamic finance in Malaysia, I struggled to equip myself on my own the hard way, but it was worthwhile. No pain, no gain. I learnt from scratch and I developed my own brand, so to speak. I was later invited to join an international Shari’a board for the first time in 1996. By then, I sat on many Sharia’ boards, in all continents across the globe. I have also been active in endorsing sukuk, and if we include Malaysian-based sukuk, I am perhaps one of the most active amongst the modern scholars.
You introduced the term “Shari’a entrepreneur.” What does it stand for? As a Shari’a entrepreneur, how different are you from other Shari’a scholars?
I like this term very much. I coined it for the first time when I was interviewed by the media after receiving a special award from His Majesty, the King of Malaysia in 2014, in conjunction with the national celebration of Prophet Muhammad’s birthday. I explained to them then that a Shari’a entrepreneur is a person who is able and willing to take risks to spread Shari’a knowledge in all private enterprises. For that, he must be prepared to be self-employed and also to be the employer of his own staff and employees.
All entrepreneurs need the support of others or rather a team to transform their ideas and business plans into action. I started with 5 people and now, I have 50 employees working under the Amanie Group in various companies and jurisdictions. I have also diversified my business. A few years ago, I formed a partnership to launch the first (private) Malaysian company in big data analytics. My recent and latest move was to acquire the oldest Malaysian business magazine. I am now technically the Editor-in-Chief. I am now looking to expand seriously into the media and education space.
When you are self-employed and what more when you are the employer, your mind-set needs to change. Well, building a house and a tall skyscraper is not the same, right? In the same vein, you need to think and act fast. Every minute counts. Any wastage – financial or otherwise – has no place in my set up.
What is more interesting is that my thinking process as a Shari’a advisor has been transformed for the better. I have now acquired a Shari’a mind with a new set of configurations, which is different from a normal Shari’a advisor’s thinking process. In what sense? Now, my Shari’a understanding of products is more business-oriented and more often than not, my mind is quicker to find the Shari’a solutions, instead of lingering around problems and excuses. As they say, excuses are a mind-deadening disease.
Lately, you have published one book after another. Do you really have 25 hours a day or there is another secret to your prolific writing?
For me, writing a book is both stimulating and healing. It can take away from you the parasites of laziness and time wasting. Once you are set to write and finish writing a particular book in a certain time frame, everything is automatically set to make this possible.
On average, I take about 6 months to publish one book but I do work on many manuscripts concurrently. A 25-hour performer must not just focus on only one thing at a time. That’s not productive. Not at all.
I began writing my second book, “I Have 25 Hours a Day: The Smart Way to Create More Time” while I was still writing my first book, “Shariah Minds in Islamic Finance”. The same goes for my third book, “Emirates Airline Sukuk”. I like to use a strategy I call the ‘preloading strategy’, which means to work on more than one task at one go to give more time, thus 25 hours a day.
In writing, as in many other areas of life, you need to be passionate about what you are going to do, irrespective of whether it is a job or even a hobby. Work hard to acquire “passion equity”. This type of equity will definitely give you a good Return on Equity (ROE) and a good Internal Rate of Return (IRR).
I am currently working on 5 other manuscripts, encompassing many interesting topics, and one of them will be a fiction on Islamic finance. This will be my first attempt in this genre to humanising Islamic finance.
The world is fast becoming orientated towards the use of social media. What role can social media play in creating awareness around Islamic banking and finance?
Social media is the trend at the moment. We wouldn’t know what lies ahead in the next 5 to 10 years. As we speak, Islamic banking and finance has no other option but to leverage on this technology diligently.
Truthfully, for many years, I myself was sceptical about social media. I was urged by my colleagues to befriend social media and for almost one year now, I have been using social media extensively for business. It helps a lot in knowledge transfer, as well as making new friends and traversing new frontiers.
I have also noticed that if you would like to remain relevant and trendy to the young population, you need to embrace social media. There is no point for Islamic finance to be excellent in their value propositions and products, but at the same time, not so many people are aware of it. It’s akin to having a magnificent gem up high in the sky, but the beauty is hidden amongst the shadow of the clouds. But fear not. Used wisely, social media can create a borderless world in the real sense!
Sheikh, can you please elaborate if there is any juristic difference between the Shari’a approach taken by Malaysian regulators and the ones elsewhere in the world?
Malaysian regulators have travelled a long way to come to the stage where they are now. They have seen many practices – good and bad, and ups and downs. Now, they are in the mood of upscaling the culture of compliance par excellence. Shari’a compliance can’t be taken for granted anymore. This has given birth to the Islamic Financial Services Act 2013.
But the overall balance between business development and Shari’a compliance has been well maintained. This is great for the industry to become both “holier” and “richer”. While prescribing high-quality compliance, as well as value intent, development of new products in various aspects has been exponential.
Some other jurisdictions tend to follow the Malaysian steps, though they are in the infancy of their journey. We need to be mindful that the Islamic banking assets are negligible. Worst still, some of them tend to be ultra-strict, which impedes the real development of Islamic banking assets. Islamic banking and finance has been the victim of ultra-strict compliance to Shari’a and sometimes, it is stricter than what the AAOIFI Shari’a standards have been articulating.
We need to understand that Islamic finance is the sub-product of a country’s economy. If the gross domestic product (GDP)of a country is performin well, Islamic finance will naturally tag along. It will be a rare phenomenon to see Islamic finance going north, while the economy is going south. That being said, the economic performance of Indonesia in the last few years has been great
What challenges do you perceive in the wake of the growing role and influence of FinTech?
I need to be honest on this aspect. FinTech was never and will never be a challenge to us. If you understand FinTech well (in the same manner you understand MedicTech, EduTech, etc.), you will notice that technology can do wonders in all aspects of life. What are my credentials on this aspect? I have actually developed a FinTech initiative and I call it “MyFinB”, namely “My Financial Buddy” or if you like, “My Financial Bureau”. When we offered this service for the first time to one of our banking clients, everyone was sceptical, if not cynical of it. It took us hours and days to convince how FinTech can increase productivity, and cut cost and time.
After a few experimental exercises to establish proof of concept, we can see the big smile on many faces. Now, we are in the roll-out process for the whole banking operations, God willing. It’s true, you reap what you sow.
We can’t underestimate the power of technology. That’s a huge mistake. It goes without saying that simultaneously, we can’t overestimate our own capabilities in areas where robotic technology is smarter and faster. Definitely, credit scoring, profiling of customers and non-performing financing, risk management, assessing business plan proposals and narratives, persuasive marketing strategies based on artificial intelligence data generation, etc., would fall under an area where the robotic mind is way above our human capabilities, in terms of speed, accuracy and permutations. Yes, believe in our own strengths, yet it’s also wise to acknowledge our own weaknesses. Acknowledging our own weaknesses can show us the better path.
Now, a few words about Amanie’s future business plans. How does your vision of IBF treat FinTech?
This may sound contradictory but interestingly, I don’t believe in long-term planning. As a matter of fact, I have never developed any business plan, except one for the sake of getting a license from one jurisdiction.
Yes, as a group of companies, Amanie definitely has some future plans. But if you were to ask me what they are, I would be clueless. I have some rough ideas and dreams, but as I progress further, all of these will fall into place. Nevertheless, I definitely know that there is light at the end of the tunnel.
I am also striving to push further into big data analytics, not only in FinTech but also in EduTech, LegalTech, as well as ShariahTech. I have also discovered some missing links in the whole Islamic finance ecosystem, which could be low-hanging fruits from the business perspective. Again, this depends on some investments in IT and technology.
At the end of the day, I would like Amanie to be known as a Shari’a-based company in all aspects of life: advisory, training, media, fund management, etc., but everything is embedded with technology.
Your neighbouring Indonesia is fast embracing IBF. What possible effect can this have on the further development of IBF in Malaysia?
Indonesia has many competitive advantages over Malaysia and many other countries in the region. They are blessed with a huge country is performing well, Islamic finance will naturally tag along. It will be a rare phenomenon to see Islamic finance going north, while the economy is going south. That being said, the economic performance of Indonesia in the last few years has been great.
By now, Indonesia has seen the whole process of Islamic finance. They are in a position to leverage on both the knowledge (and experience) and their resources to lead Islamic finance into a new territory. Yes, exciting times ahead for the industry!
In the near future, I foresee that Malaysia has to ‘compete’ with Indonesia, in terms of talent, domiciliation of foreign Islamic funds, business ventures, etc. It will be wise for anyone who takes a positive view about Indonesia to plant their feet in this Republic. It pays to look at something beyond the obvious; not only as it is, but as well as what it could be.
You travel extensively. Which Muslim-majority country has really impressed you and why?
My immediate answer is the United Arab Emirates. In fact, my family and I were living in Dubai for two years, but we had to leave Dubai for education purposes, as my children decided to study in Australia. My first overseas office was in Dubai in 2008 and thus far, it is the largest office outside Kuala Lumpur.
The UAE has been designed and developed to attract people to come, work and live in the country. Everyone is treated equally and the government services are excellent, as in the UAE, both the government and private sector apply the same service quality standards. You won’t feel and can’t tell the difference between a government and a private service counter. For those with families, the UAE also provides living space. All the public amenities and traction centres are built across the country and are still under massive development. What is most striking is the sense of security. This is a good asset that everyone wants.
At DIFC, where business is the main focus, everything has been made easy, from the registration, support, visa, business connectivity, not to mention good branding. I think that the UAE, all in all, has set a very high benchmark for many other Muslim-majority-based countries to emulate. The UAE is quick in becoming the role model of a vibrant new environment for living and working; leisure and business, for visitors and transit passengers alike.
Please share with the readers a typical day of Datuk Dr. Mohd. Daud Bakar. How it starts and what are a must on the to-do list on a daily bases?
Of all the questions, this is my favourite. I like to relate my life and work style to everyone. Morning walk is a must in my diary. I walk for health and to prepare my mind for the whole day. A healthy body leads to a healthy mind, right? Once I am done with my morning walk, I am prepared to start my day from meetings to networking to seminar presentation.
I like to use my premium time (as I call it) of the day to look into difficult issues (and difficult people). Replying to emails is not that difficult, such that I’m able to use my not-so-productive time to reply to all emails other than emails about fatwa, and Shari’a views and drafting. Everyone has their own productive and not-so-productive time. Identify your right time for the right job, and strike while the iron is hot.
I also like to adopt an interceptions strategy to save time. Before I go into a long meeting or board onto a flight, I will email all the necessary issues, and questions and proposals, so that when I am done with the meeting or when I land in another city of the world, most, if not all the outstanding work have been taken care of by someone. To put it differently, you let people work while you are in the meeting or on a flight (or in deep sleep). I have shared all my tips in my book, “I Have 25 Hours a Day: The Smart Way to Create More Time (2016)”.
If you are ultra-sensitive to your time, you can outperform others by doing more work and tasks in a limited time. You can’t avoid a long list of expectations (in the same manner you can’t avoid competition). But you can beat everything and everyone by becoming smarter and faster. Life is not the art of avoiding but is the art of adapting and improving.
What would be your message to the global Islamic financial services community, particularly the youth?
I don’t have sophisticated advice. For me, the simpler the better. My advice is very much human and of common sense. Islamic finance is a newcomer to this world. We need to do a lot of engagements with many stakeholders within our community and beyond. Don’t be fooled by the term ‘Islamic finance’ and thinking that people are easily attracted to this term.
If people don’t know or what more are confused about Islamic finance, then they won’t ever come to ask for the Islamic finance menu. They might either say something bad about Islamic finance or avoid listening to the Islamic finance narrative from afar. It’s scotoma all over again. Without the right information, the eyes see what they want to see and the I have to be honest. Regulators and Shari’a scholars can’t remain forever on their pedestals. They need to do their part of engaging with the stakeholders. The shareholders must also be active, hence pushing the boundaries of Islamic finance. Sometimes, the inspiration and “good” pressure by the shareholders (on the management and the Shari’a advisors) can make impossible things possible. This is the magic of the shareholders.
As for the youths, you are blessed with so much literature and role models before you and amongst you. You can just pick up any good literature for your intellectual and insightful development, and follow any good role model to excel in your career in Islamic finance. My point is that; make your learning curve shorter and more impactful. There is no need to go through the whole journey that we – the veterans and silver hair generation – have gone through. We have paved the way, bushwhacking through the jungle of challenges and adversities. All that the youths have to do is to follow the path and later, even trail-blaze their own paths.
If you need a motivational book, get my latest book, Emirates Airline Sukuk. This book amongst others narrates the success story of Emirates Airline, which came into operation 10 years after Islamic finance, and has been outperforming other airlines across the world. It took them a lot of courage, innovation and strategic thinking to be the best airline operator in 2016. Where does our Islamic banking and finance stand on the global stage? I hope this book is both stimulating and motivating for the youth (as well as for the old guard).
Perhaps the older generation of the Islamic finance industry must do a bit more to handhold our younger generation. The sooner we do that the better. Otherwise, we will be faced with a knowledge gap, which is detrimental to our industry.
Any volunteers? Count me in!
