Abdul Wahab Al Rushood, Acting Group CEO, Kuwait Finance House (KFH): Interview

Interview: Abdul Wahab Al Rushood

What opportunities do you see for greater collaboration between established banks and financial technology (fintech) firms?

ABDUL WAHAB AL RUSHOOD: Regulatory bodies in Kuwait have been supportive and adaptive to consumer demands for digital services. Not only have they allowed established banks to provide new digital services without applying for a different banking licence, but they are also allowing banks and fintech firms to collaborate through partnerships, creating opportunities to serve underbanked segments through cost-effective means. They are also fostering collaboration between different industries to provide unified, centralised and packaged services for customers.

The Central Bank of Kuwait is expected to release the framework for open banking, allowing standard application programming interfaces to be established and rolled out across banks. This will create significant opportunities for optimisation and improvement in payment solutions, buy-now-pay-later microfinance and the customer experience through seamless, datadriven, artificial intelligence-integrated offerings.

How can environmental, social and governance (ESG) principles facilitate increased financing and a wider product base for sharia-compliant banks?

AL RUSHOOD: The emerging practice in Islamic finance of integrating social solidarity instruments like takaful (Islamic Insurance) and risk-sharing principles like murabaha (cost-plus financing) closes the gap between existing models of traditional banking and financing, and aligns with the needs of for-profit social enterprises. Sustainable investing and Islamic finance hold a number of shared principles, and this crossover will boost appetite for sharia-compliant products. Significant growth is expected in the number of investment funds that combine ESG and sharia in the coming years. Investor demand for these products will continue to support flows into Islamic funds.

Moreover, the increase in ESG implementation – coupled with growing investor demand for responsible investing – will enhance investors’ shift towards sharia-compliant funds, particularly for those whose investment decisions are guided by ESG considerations, creating opportunities for the Islamic finance industry. In this regard, KFH is advancing in sustainable Islamic finance, providing greater support for sustainable investing, considering ESG standards, and has launched a comprehensive sustainability report.

In what ways can Islamic finance contribute to the goals of the New Kuwait 2035 vision for sustainable economic development?

AL RUSHOOD: Islamic banks have sizable balance sheets like their conventional counterparts to support development activities under the New Kuwait 2035 vision. The industry has the resources and capabilities to finance capital expenditure requirements under national plans. Islamic finance supports growth in all economic sectors, and can cater to infrastructure projects through flexible structures.

KFH provides sustainable banking solutions. Accordingly, in 2021 the bank arranged a Tier-2 green sukuk (Islamic bond) issuance transaction for Kuveyt Türk amounting to $350m. The sustainability sukuk issuance was considered the first of its kind to be issued by an Islamic financial institution and the first Tier-2 sustainability sukuk issuance transaction globally. Proceeds will be used to finance green and social projects according to a sustainable finance framework.

As part of the bank’s financial innovation efforts, we have launched the first fully automated 24-hour digital self-service branches in Kuwait with the name of KFH Go, following the introduction of a broad range of digital services. The bank is also collaborating with financial services technology providers that offer innovative solutions, with the ultimate aim of expanding and enhancing the range of products and services.