An interview with Paul Stockwell: Islamic finance has ‘enormous opportunity’ for growth over coming years
An interview with Paul Stockwell: Islamic finance has ‘enormous opportunity’ for growth over coming years – Theo Osborn
n an interview with Specialist Banking, Paul Stockwell, chief commercial officer at Gatehouse Bank (pictured above), discusses increasing awareness of Islamic finance and opportunities in the banking world.
Your research found that 46% of Muslim consumers had never used a sharia-compliant product. Why?
Our research proved to be a fascinating study of the impressions people have of sharia-compliant finance products, and the finding that nearly half of Muslim consumers had never used one offers a huge opportunity for Islamic finance. Although we have made significant progress in promoting the range of products on offer, more work needs to be done to build on the awareness we have already generated.
What stood out from the report was that although a tremendous amount of effort goes into social media and advertising, we may have underestimated the importance of marketing through word of mouth. Our research revealed that Muslim consumers value the opinions of their friends and family, and their views carry great weight.
What this demonstrates is that we need to reach out to customers who are vocal about their positive experience of sharia-compliant products. You cannot get a better endorsement than through a customer championing your products and service, and we need to find an effective way to reach and communicate positively with them.
You launched your first home purchase plan last year. What has the progress been like on the product?
Launching a new product in the market can be a daunting prospect because you never know how the market will respond, but thankfully the reaction has been overwhelmingly positive and meant our progress has been rapid.
We launched our home purchase plan products in December last year, and customer demand meant that we developed a wider range of products well ahead of schedule.
What became clear was that our home purchase plan products already had a customer base, particularly in the expat market. These consumers have been underserved by other institutions because regulatory requirements are more demanding and, therefore, more expensive.
What are the biggest opportunities in the banking world?
With each new generation of banking customers, you learn they have different needs and requirements to the generation before. Today’s consumers care greatly about how their money is used by the businesses they deal with.
This provides us with a tremendous opportunity to spread the word about ethical banking and attract customers who want more transparency over how their bank spends its money.
Because we are guided by sharia principles, we only invest in accordance with a strict set of ethical principles. It means Gatehouse Bank won’t be involved in sectors such as gambling, alcohol, tobacco or arms.
Of course, Islamic finance itself has an enormous opportunity for growth over the coming years, and the fact that we are at the forefront of ethical investment already will only enhance this growth.
If you could change one thing about the banking industry, what would it be?
I would put transparency at the heart of the industry, as public trust in the banking sector has not fully recovered from the financial crisis.
We need to spend more time proving how the industry has developed in the years between the crisis and now and be more transparent about how we spend our money. Proving our ethical credentials is vital.
How did you get into banking?
Although my career began with working for a bank, I was initially involved in managing property possessions and mortgage sales at Halifax. My interest in property took me in a different direction for a while, as I qualified as a chartered surveyor and dealt with property valuations, agency and development in a private practice.
This experience proved invaluable as I moved back to the banking sector, first as head of property risk at Aldermore, setting up the property risk function for mortgages and oversight monitoring of the property development portfolio, and then to a similar role at TSB.
I still have a property focus at Gatehouse Bank, where I am part of the executive team responsible for commercial strategy and development of the bank. This includes work on buy-to-let, home finance and commercial real estate finance. I’ve come full circle really.