KARACHI: On Monday, BankIslami marked an important development in the technological advancement of Islamic banking in Pakistan with the introduction of the Finance Origination and Credit Underwriting System, or FOCUS, which is an entirely indigenous system that was developed by the bank itself.
The BankIslami FOCUS system utilizes AI-based automation technology in automating and streamlining the credit underwriting processes of the bank altogether, eliminating manual methods for those involving a standardized and streamlined approach that is consistently applied across all branches at once.
Functions Performed by the BankIslami FOCUS System
The BankIslami FOCUS system solves one of the key frictions that exist in the field of retail and corporate banking — the issue of the time it takes from a customer making an application for financing until a credit decision is made. Credit underwriting in manual form causes inconsistencies, delays, and mistakes at different decision-making junctures.
FOCUS gets rid of these friction points through automation of credit analysis using artificial intelligence, which provides a consistent decision-making process based on the same criteria for all branches, as well as reducing the time from the moment of application to the receipt of financing considerably. FOCUS achieves two things at once: better credit decisions and consistency.
Developed Internally, Owned Entirely
The key element of the FOCUS system at BankIslami that could be considered to have the highest strategic importance is its internal development by the team from the bank. This decision will certainly have significant financial ramifications going forward.
Through the process of being free from reliance on third-party vendors in terms of software licensing, customization, and support, BankIslami avoids a recurrent expense cycle that most banks face through their dependency on third-party core banking systems. BankIslami can customize, expand, and develop its underwriting platform according to its requirements without having to wait for any developments on the part of the vendor.
FOCUS: Mission-Oriented Innovation According to BankIslami’s president and CEO, Rizwan Ata, the launch of the BankIslami FOCUS system is more than an improvement in technology. “At BankIslami, the needs of our customers have always been at the center of everything that we do and innovate,” Ata remarked during the launch of the system.
In addition, he pointed out that the launch of FOCUS is an indication of the capabilities of BankIslami’s workforce when the motivation behind the launch is loaded with the importance of the purpose of BankIslami itself, namely, “Saving Humanity from Riba.” This linkages shows that the launch of a technical product has direct connection with the philosophy of Islamic banking.
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What it Means for the Future of BankIslami’s Business
The addition of the FOCUS system to BankIslami is an important tool that complements what is already a growing organization in Pakistan. Decisions made quickly and consistently can drive the success of their portfolio of loans because there will be less reluctance on the part of customers when they decide whether or not to finance.
However, BankIslami’s decision to create rather than purchase the credit underwriting capability demonstrates a maturing level of technological expertise in the local Islamic banks that is indicative of an increasing competitive advantage the industry will have over other types of banks and international Islamic banks that wish to penetrate the vast Pakistani Muslim customer base.
