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This series of Islamic finance insights discusses social infrastructure trends and the value proposition of an alternative Sharia’- compliant funding model, which resembles sustainable finance, shares guidelines of responsible investment and sound governance practices. The study emphasizes and reflects on the collective views of an industry forum organized by Deloitte Middle East and supported by Deloitte UK, held last November in London. The paper defines the key enablers and influencers of building an effective Islamic finance. It also analyses the impact of this model in light of regulatory, market practice and governance requirements.

Deloitte’s Islamic Finance Knowledge Center (IFKC) in collaboration with the Chartered Institute of Securities and Investment (CISI), UK published its latest whitepaper entitled "Scalable and sustainable source of funding social infrastructure". The success of infrastructure projects in using Islamic finance has inspired investors in countries such as Bangladesh, Indonesia, Kazakhstan and Malaysia to seek pursuing sustainable funding through Islamic finance. According to Dr. Hatim El Tahir, Director of Islamic finance at Deloitte, this whitepaper developed practical analysis and forward thinking thoughts as how Islamic finance can play its natural role in this pivotal sector of economy. The analysis suggests there should be continued industry dialogue between practitioners, policy makers, regulators and market participants, to articulate and assess suitable investment and funding structures.

Together with Fintech Indonesia Association, Deloitte released the Fintech Survey 2016 at the Indonesia Fintech Festival & Conference 2016. Conducted between June to August 2016, the survey interviewed 70 respondents from various Indonesian fintech companies. 27 different types of fintech companies participated in the survey. All of them shared three major concerns. A great number of fintech players agreed that the current regulatory process is "not so clear." Another pressing matter faced by Indonesian fintech players is talent shortage. The third concern is the local market’s low levels of financial education. Ironically, this problem happens not only among members of the general public but also among players in the conventional finance industry.

Deloitte and the Islamic Research & Training Institute (IRTI) have launched a new whitepaper entitled "The catalysts for change: Strategic priorities in governance and regulation in Islamic Finance practice." It is the first publication of a series of whitepapers aiming to address industry issues and present practical analyses. According to Joe El Fadl, Partner at Deloitte Middle East, the primary goal of the series is to provide a forum through which best practice, knowledge and Islamic finance research can be shared with stakeholders. It also presents the progress in governance, regulatory compliance, risk, sustainable business models, financial reporting, transparency and leadership.

The important role of the Republic of Turkey in the global Islamic finance industry as well as its distinct standing both at the official and popular levels, the steady growth both of Islamic banks and financial institutions operating there, in addition to the parallel evolution of its regulatory and supervisory framework, the AAOIFI has been keen to strengthen professional and technical ties with this country. This was translated into an official visit by AAOIFI to a number of banking regulatory and supervisory bodies as well as a number of Islamic banks and financial institutions, professional entities and academic institutions.

The gap between the spending needs of developing countries and the pressure on financial institutions to carefully monitor their credit exposure in order to optimize their capital management driven by regulatory constraints on solvency, is creating opportunities for more diversified products of alternative funding. Considering promoting the Islamic bond market is on top of the agenda of credit risk management, thus creating room and greater opportunities of growth for Islamic products of asset based or backed instruments. This context provided the background for the Deloitte and IRTI-IDB Group executive workshop, “The corporate Sukuk market in Europe: mapping the pathway for an alternative financing”, recently held in London.

Deloitte and Noor Telecom have collaborated with Dubai Islamic Economy Development Center (DIEDC) for the compilation of a report that highlights the untapped potential of the Digital Islamic Services market and offers key recommendations for realizing Dubai's vision of emerging as the capital of Islamic economy. The report whose title is ‘The Digital Islamic Services Landscape: Uncovering the Digital Islamic Services opportunity for the Middle East and the World’ combines a range of qualitative and quantitative research projects conducted for the offline and online markets around the world. The report defines the Digital Islamic Services landscape under nine key industry verticals and areas, which constitute the pillars of the global Islamic economy online.

Despite the global takaful insurance market exhibiting impressive double digit growth of 18 percent over the period 2007-2012, the regulatory environment remains a work in progress and faces the challenge of inconsistency and conflicting interpretation across jurisdictions. These are the findings of Deloitte’s 2014 Takaful Insurance Report for Asia, Middle East and Africa, entitled ““The Way Forward for Takaful". Examining six key markets, the report identifies practice gaps and product offerings. Among the findings the study observes that takaful product offerings and diversity of products are lacking, and that the Takaful business is by far underpenetrated in the six countries examined.

While the Gulf Arab states increased market penetration with Takaful, Malaysia continues to lead the global Takaful industry, said the 2nd Takaful report by consultancy Deloitte released here on Sunday. However, Takaful operators face the problem of over-regulation and resource scarcity. The lack of resources such as qualified staff, missing research capabilities and low demand for life insurance products, in the Middle East in particular, have slowed down the growth of Takaful. Oversupply is another obstacle. In Kuwait alone, there are 30 Takaful operators which means many can't generate sufficient profits simply because the market is too small.

Around 80 percent of nonoil GDP within the Middle East region is accounted for by family-owned business groups. Typically, these privately-owned organizations span multiple business, are vertically integrated, own sizable real estate portfolios and their operational control is still maintained by the original founding family member or the second generation. Family-owned businesses in the Middle East face a range of challenges that affect not only the success of the business itself, but also the professional and personal goals of their owners and their stakeholders at large. Deloitte's Private Client Services practice (PCS) is a private client-focused practice that offers bespoke and region-specific solutions in the area of family governance, succession planning and generational change, wealth management, tax structures and exit strategies.

A new whitepaper released by Deloitte in July examines the potential mortgage industry in Saudi Arabia and highlights key issues that need to be addressed in order to create both lender and consumer confidence in this market. The whitepaper lists and describes the five laws that will make up the Finance Law, which are The Enforcement Law, The Real Estate Finance Law, The Registered Real Estate Mortgage Law, The Finance Lease Law and The Finance Companies Control Law. The description is followed by a discussion of lenders and consumers’ potential concerns with regards to the new mortgage infrastructure. In principle, the multi-dimension reforms appear sufficient to develop a functioning mortgage market. However, fundamental to this is whether they are executed in their entirety, or whether there is any uncertainty as to their exact definition.

According to a new Deloitte report, an organization's environmental, social and governance (ESG) performance can directly and indirectly impact its market valuation. The report highlights that short-term ESG issues and events, including human rights issues, product recalls, boycotts and protests often trigger the strongest and most immediate impact on stock prices. However, there is less convincing evidence that ESG performance leads to higher stock returns over the long-term. Deloitte's report highlights how and why ESG performance is expected to continue to be a consideration in financial valuation and several reasons risks may play an increasingly important role on performance.

Deloitte Islamic Finance Knowledge Centre is a thought leadership think-tank focused on providing innovative intellectual and practical programs, for Islamic finance leaders and institutions and leads the practice development in Middle East region and coordinates with Deloitte's member firms globally. Its activities include:

•Develop practice across the MENA region and support Deloitte's Islamic financial service offerings•Provide internal and client's training and Islamic finance education•Conduct leading market and regulatory research and thought leadership•Promote professional excellence and best practices through different awareness programsThe responsibilities of the "Business Analyst" include:
•Co-drive Deloitte IFKC thought leadership function in ME and co-oversee knowledge-building initiatives in close collaboration with the Director of Deloitte IFKC.

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DELOITTE is setting up an Islamic Finance Centre of Excellence in Kuala Lumpur. This is Deloitte’s only such centre in the region and one of three globally, alongside London and Dubai.