MARKETING ISLAMIC FINANCIAL SERVICES TO NON-MUSLIMS

Adam Tanielian
2012
adam.tanielian@gmail.com
We live in a nearly infinitely interconnected world of business. According to the
International Monetary Fund, during the later stages of the financial crisis, even the Islamic
banking (IB) sector experienced decreased profitability in wealthier primarily Muslim nations
like Saudi Arabia and Malaysia, where the influence of conventional banks cannot be
avoided. As the world emerges from crisis, new opportunities are present. It is a good time to
redevelop strategies and recommit to principles.
Muslims make up roughly 25% or more of the worlds population, depending on the
source, yet the market share of Islamic banks struggles to reach that percent even in Muslim
nations like Malaysia. In late 2011, Ernst & Young reported that Islamic banks held only 14%
market share of all banking assets in the Middle East and North Africa (MENA) region, a
region dominated by Muslims. Recent Arab and Muslim liberation movements coupled with
consistent growths in the IB sector suggest that the US$1.1 trillion mark is a milestone for IB,
but by no means a plateau.
Due to the forecasts of long-term high unemployment rates and economic trouble in
the US and EU, individuals are looking for alternatives to the banking systems which Occupy
Wall Street movements recently denounced. Young people are looking for more reliable
investments with less risk, and older people are looking for institutions they can trust with
their life savings. Many non-Muslims, fed up with greed and deception among corporate
executives, are demanding more religious and philosophical morals at work in banks. Islamic
banks may offer these people the services they desire.
In marketing IB to non-Muslims, there are several important things to consider.
Nondiscrimination is a generally accepted principle of law which businesses of any kind are
often obligated to apply. In order to appeal to non-Muslims without violating any principles
of Islam, IB professionals should put thought into developing a unique marketing plan.
Morality is a Universal Concept
The fact is well-known that secular capitalist and alternative religious ideals are
unappealing to Muslims. Many capitalists and Christians, or persons of other religions and
belief systems have accepted that diversity is a permanent feature of the global marketplace.
Doing business in any language, nation, or culture does not need to be an exercise in
missionary work. We can accept that people have different ways of life, and allow them to
practice their own values and beliefs while still holding firm to our own.
Morality is an ancient concept that virtually every culture and people understand.
There are differences in perceptions between groups, but base concepts of morality are fairly
simple and do transcend various sects. Murder, thievery, adultery, dishonesty, etc. are
generally considered immoral practices among the worlds many people. The Bible forbids

usury in Deuteronomy 23:19 and other verses. Both Christian and Jewish texts provide rules
and instructions on diet similar to halal. Variations exist in the extent to which the state
regulates morality the level of enforcement of moral behavior and there are conflicts
between pragmatism and theory, but the concept of morality in isolation is ubiquitous.
Working together often requires mutual acceptance of personal and social limitations.
Considering that one does not need to be Muslim to utilize Islamic financial services, then
those who are charged with performing such services for non-Muslims should probably
understand that it is not the decision of the financial institution or its workers if a consumer
will convert to Islam only a higher power may influence such changes. There is little
benefit to the financial institution or Islam in refusing service to non-Muslims. Muslims may
feel it necessary to advocate their beliefs among non-Muslims, but it may be best to simply
accept the differences among people and hope for the best knowing that people today
generally have sufficient access to moral ideology and religious material such that they may
make their own decisions independently.
Let Some Aspects Remain Implicit
Flaws of the American and European capitalist systems are written in newspapers and
online every day. Financial crises, inappropriate lending, debt trading, fraud and Ponzi
schemes are well-publicized phenomenon and threats that lead to disastrous effects. Few
economic experts from the Wall Street crowd would argue that their system is perfect. Lack
of political will, disorganized and ineffective policy, failures by governments to protect the
public interest by more seriously scrutinizing banks, and plain immorality these are
complaints of western Christian and Jewish capitalists of their own systems. While the
weaknesses of those systems should represent opportunity to the Islamic system, there is no
need to alienate potential consumers with the politics of the day.
By approaching the competition using a zero-sum model, where one partys gain is
achieved only by another partys loss, there may be risk of losing some opportunities. None
should argue the fact today that western capitalist systems are permanent institutions. Thus
there should be no goal of monopoly power over the financial services market among Islamic
financiers and bankers. We should embrace diversity and competition, but also accept that it
is not our decision what other people choose to do. It is entirely possible to support Islamic
finance (IF) and Islamic principles without trying to take something away from other people,
who obviously remain committed to their way of life and shall likely do so for a very long
time. Certain pieces of rhetoric, then, should be implied only rather than explicitly stated. By
showing outsiders to Islam the benefits of the Islamic system, the Muslims involved may
indirectly influence them to accept the religion, whereas a more direct approach is more
likely to result in the outsider refusing early, and thus not experiencing any positive aspects of
Islam.
Focus on the Security of Asset-Backed Financing
In recent news reports, there was a complaint about Silicon Valley venture capitalists.
Apparently, a lot of investors are not willing to wait a few years before growth and returns are

seen. Facebook-mania struck and it seemed to some experts that investors expect every
investment to triple in value virtually overnight, which is obviously unreasonable and
undoubtedly is the type of attitude that led to predatory and fraudulent lending five to ten
years ago, which in turn led to financial and economic crises.
One of the main strengths of the Islamic system is the reliance on illiquid assets.
Concentrate on the beauty of the Islamic logic regarding this point. Explain the musharakah
the mudarabah, the salam and istisnaa methods very thoroughly. Convince potential
investors of the genius of these ideas. Set their minds and hearts at ease by proving that there
is far less risk involved under the conditions of IF. Explain also that, in many ways, Islamic
financial methods are alternatives to, not the antithesis of, interest.
Most of the non-Muslims will be ignorant of Shariah law and the entirety of Islamic
banking and finance. Show them the truth that has been withheld from them. Yes, there are
Islamic funds! Yes, there may be some capital gains! Returns on investments are most
certainly allowed, but following a different method. Islamic finance is still finance!
Target the Middle Class
In recent years, among young investors especially, the idea of gambling on stocks
has become very unappealing. Whereas in past decades, double digit growth was normal in
western markets, today profits are not guaranteed and middle class investors are looking for
more stability and less risk. Islamic financial services can be appealing to people who are
disillusioned with the hardcore banking institutions of the Occident. New shirkah investments
can easily create new Islamic mutual funds, wherein many smaller-time investors together
may share the rewards of making one or many larger investments.
Whereas in western capitalism, the smaller-investors suffer losses greatly
disproportional to the wealthiest investors, who consistently increase their wealth through
recession and economic downturns, Islamic principles provide prima facie prohibition of such
unfair practices, which can be very appealing to people who want to invest, but have little to
lose. As the famous maxim states:

Profit is based on the agreement of the parties, but loss is always subject to the ratio of
investment.
Recognize the Benefits of the Strict Prohibition against Theft
In the United States alone, fraud is a multibillion dollar a year industry. Fraud in the
financial services industry is an epidemic and has been for many years. Fraud may not be
coercion by use of force or threat of violence, but it deprives a party of their legal right to
property. Fraud is theft, although the notion of white collar crime has separated the two
concepts in the English culture. Cases of fraud yield lower average prison sentences than
bank robberies in US Federal Courts, but fraud is far more costly to the economy and its
perpetrators steal far more than what is stolen in traditional robberies.

Despite criticisms, the dispositions toward theft in the Islamic world make fraud less
of a threat than in the western world. The inclusion of religious principles in the system of
banking and finance create a mandate for honesty and fair practices. Safety associated with
the lower threat of fraud make Islamic banking appealing to non-Muslims who are tired of
the threat of bank closures, regardless of FDIC or similar protection.
Approach the Future with a Global Mind
Opportunities relating to Islamic banking and finance have not gone unnoticed by
public and private professionals outside of the MENA region. In 2007, the British
government recognized the benefits of issuing sukuk. The then Economic Secretary said:
We are determined to do everything we can to deliver greater opportunities for
British Muslims and also to entrench London as a leading centre for Islamic finance
in the world.
Islamic banking is utilized in scores of countries, including some where Muslims
make up only a minority of the society. There are abundant opportunities for growth and
expansion, which benefits consumers, Islamic institutions and the Islamic faith. By remaining
committed to core principles associated with Muslim living, bankers in this sect can provide
alternative solutions to a world which is tired of the monopolistic and fraudulent practices of
western capitalist institutions.
Adam Tanielian is an American citizen living in Trat, Thailand, working as a math and
English secondary teacher. He earned an MBA and LLD between 2008 and 2012 from the
Institute of International Studies at Ramkhamhaeng University in Thailand.