Indonesia, the next big market for Dubai Islamic Bank?
As part of our recently launched Profiles in Leadership series, CPI Financial CEO Robin Amlôt interviewed Dr. Adnan Chilwan, GCEO of Dubai Islamic Bank.
For an in-depth review of the bank’s domestic and international operations, catch a video short of his insight on Indonesia here.
In March 2017 Indonesia’s Bank Panin Syariah rebranded to Panin Dubai Syariah Bank (PDSB). DIB holds a 40 per cent interest here. What growth do you expect in Indonesia?
Indonesia is a very exciting market. It is the largest, most densely populated Muslim market, with around 250 million Muslims. When we entered into Indonesia, I was told that it is a market where Islamic banks are quite small, where Islamic banking is underpenetrated – so why go in to Indonesia? These are exactly the right reasons. The Indonesian market has tremendous potential. It is a market which has something in it for everyone. Given that you have the right positioning you cannot go into Indonesia and be just another player. You have got to bank on all the experience that you have gathered over the four decades that we have been in existence. Technology also plays a very large part. Last but not least, the regulator in Indonesia is quite supportive of Islamic finance. It is on the national agenda. If you look at the current five per cent penetration of Islamic finance, it is just the tip of the iceberg.
Organisations in the past that have tried to venture into Shari’ah compliant banking in Indonesia were not as successful as they wanted to be because of their positioning. Given the size and potential of the Indonesian market, you cannot just do faith-based banking in Indonesia. There has to be a value proposition that makes sense to everybody.[RA1] I am not saying that we would ever compromise on Shari’ah compliance, that’s within our DNA but you do not need to keep nailing the point that we are an Islamic bank, so you are a Muslim and you should bank with us.
The success of DIB within the UAE has been for that right reason, because we have changed our positioning. That’s the reason why after being in existence for four decades you have actually only taken notice of the bank in the last three or four years, because we have changed our positioning. We have not compromised Shari’ah, we have not compromised Islamic banking jurisprudence but what we have done is we have understood what the customer wants. [RA2] We are now fighting tooth and nail to make sure we compete with the largest players within every region we are operate in and try to bank everyone. If that’s the positioning we follow in every geography we enter into, including Indonesia, I think the sky is going to be the limit.