The acceleration of innovation is driving the need for digital transformation. As digital disruption reshapes global economy, Islamic banks are doing their best to keep up with digital transformation taking place. The majority of banks are on the path to digital adoption to meet new age customer demands. This has paved the way for the emergence of a global Islamic banking software provider offering world-class digital solutions and services that rival its conventional counterparts, to enable Islamic banks propose a wide range of personalized products and create new revenue streams through digital channels.

Here’s an exclusive interview with Rosie Kmeid, Vice President – Global Corporate Communications & Marketing at Path Solutions, the leader in Islamic core banking platforms mainly in Africa, a region which is becoming the world’s hottest hub for this new banking model.

Let us start from the basics. What does “Islamic core banking system” mean?
As you know, a core banking system is the software stack which is used to support a bank’s most common transactions like opening accounts, debit card withdrawals or payment processing. An Islamic one is similar to the conventional system, but it is compliant with the Sharia, and covers the following:

  • The sources of funds, such as URIAs, Wadiah savings, Wadiah current accounts.
  • The uses of funds, such as Murabaha, Musharaka, Ijara, etc.
  • RIAs account management, Islamic treasury, Islamic trade finance, CRM, CIF, and the related delivery channels like phone banking, Internet banking and ATMs.  
  • Supports proper recording, tracking and management of URIAs, the pools of funds.
  • Produces the related accounting entries and confirmations according to industry standards and the Sharia rules and regulations.
  • Supports Sharia audit procedures (transaction processing log and maintenance of legal documentation).
  • Incorporates the Hijri calendar and Zakat calculator.

Thus, a state-of-the-art Islamic banking suite is imperative to manage those services. Very often, functions which sit outside these core transactions, are managed by separate systems or dedicated standalone systems. Our system however, unifies all of these disparate systems on a common core and code base, where the services are then plugged-in in a modular fashion that allows for fast and easy configuration of the required Islamic banking products.

The system has been designed with efficiency as a priority. Most processes can be automated, supporting straight-through-processing (STP), reducing the number of errors and the need for manual intervention, and driving down operating costs.

You have a pretty bold slogan in your advertising campaign: “We guide your ambitions”. How would you materialize this concept?
At Path Solutions, we focus on providing Sharia-compliant core banking platforms to Islamic banks and Islamic microfinance companies looking to scale up their offerings using digital technology. The strapline of “We guide your ambitions” communicates what we do best so that these institutions benefit from increased efficiency and profitability in the digital era. We help them learn global best practices of digital transition.

In this context, we simply build the technology required by end users to perform banking transactions from remote and unbanked areas using portable devices in a Sharia-compliant and transparent manner.

We go above and beyond to ensure our clients’ complete satisfaction.

How do you differentiate yourself from the likes of Temenos, Oracle FS and Tosan?
There are possibly as many as 15 core banking system vendors worldwide who claim offering an Islamic banking suite, most of these have been around for over a decade but have not implemented a single project at an Islamic bank. The IT vendors you mentioned do provide the Islamic functionality but they are generally referred to as legacy providers. It is true that their systems are well proven and reliable, however their systems are not certified by a standard-setting body as concordant with the Sharia, and they also tend to be inflexible and are incredibly expensive to deploy and maintain, making them inaccessible to small and medium-sized Islamic banks.

Path Solutions is a proven industry leader, a key technology enabler and a business partner for over 130 prestigious Islamic banks worldwide. With over 25 years of solid experience in Islamic core banking platforms, Path Solutions is a major contributor to the development and growth of modern Islamic banking, by researching industry new trends and developing innovative solutions to meet the needs of a fast-growing community.

Our Sharia-compliant banking suite covers the full spectrum of functional requirements in accordance with the Islamic law. It features complete management of products and mechanisms to serve operations according to the Sharia rules and regulations. It offers full compliance while providing flexibility and efficiency of operations, reducing costs, maximising productivity and delivering high-quality client service experience.

Besides, our suite is built based on modern architectural principles, i.e. cloud-ready, built on a service-oriented open architecture and highly componentized. The SOA architecture means our Islamic core banking system is highly flexible, can be easily integrated with other systems and incorporates an adaptive platform for innovative banking.

Does Path Solutions fall under the label “banking-as-a-platform”? In what sense do you have a platform business model?
Our banking platform fulfills all clients’ needs with regard to technologically supporting their business requirements, ranging from a fully managed BaaP service all the way down to just providing the software and letting the client integrate and run. In parallel to the BaaP, our platform is engineered to provide a complete open ecosystem where we supply our powerful processing engine, while opening up the platform and access to our clients’ delivery channels if needed.