Professor Dr. Serden Ozcan, Chair of Innovation and Organization at WHU – Otto Beisheim School of Management and his colleague, Professor Dr. Christophe Boone of the University of Antwerp have been awarded a research grant of 212,000 Euros by the Flanders Research Foundation (FWO) for their research into Islamic Banking. In the contest for the prize, the two prevailed over numerous competitors.
Islamic banking is based on the economic ideology of Islam. According to Sharia Law, banks are neither permitted to collect nor to pay interest. They are not allowed to participate in speculative transactions and must not take any unnecessary risks. Likewise, investments into industries that are not acceptable under religious aspects are prohibited. Islamic banking is the international financial markets’ fastest growing segment. Today there are 270 Islamic banks that also have operations in 29 non-Muslim nations.
In Germany, the first Islamic bank that offers all of its financial services in compliance with Sharia Law, opened in July 2015. It now has branches in Frankfurt, Berlin and Mannheim and boasts 15,000 customers; 10 percent of which are non-Muslim Germans. Prof. Ozcan sees greater opportunities for expansion of Islamic banking in Germany and points to the recent influx of a large number of immigrants from Muslim countries and the Brexit as two additional catalysts for further growth.
Professors Ozcan and Boone will use the EUR 212,000 in prize money to conduct more thorough studies on the subject matter. They have divided their project into three sub-topics: They will be focusing on human resources at Islamic banks and examine corporate governance strategies, religious supervisory boards and top management teams. The third project will delve into product development and market expansion strategies. Their research program involves field studies in core Islamic banking markets including Malaysia, UAE and Turkey and extensive cooperation with some of world’s largest Islamic banks.