As WikiEXPO Dubai concludes successfully, we had the pleasure of interviewing Dr. Mohamed Damak, the Managing Director and the Sector Lead for Financial Institutions in the Emerging EMEA region. Mohamed is also the Global Head of Islamic Finance at S&P Global Rating (SPGR). In this capacity Mohamed leads SPGR’s cross-practice analytical thought leadership initiatives and credit rating activities in the Islamic Finance sector globally. In addition to these responsibilities, Mohamed co-heads the Emerging Market Global Industry Focused Team and is a member of several senior forums and research labs including the Digitalization of the Markets Research Lab. Mohamed’s research interests include emerging markets financial institutions, the digitalization of the financial services industry (including cryptocurrencies, stablecoins, tokenization, and digital bonds) and Islamic finance. Mohamed is a regular speaker at industry events and conferences. Prior to joining SPGR, Mohamed worked as a Principal Credit Risk Officer for the African Development Bank in Tunis. From 2006 to 2010, Mohamed worked for SPGR covering conventional and Islamic financial institutions in the Middle East and North Africa region. Mohamed holds a PhD in Finance and Master in “Money, Banking and Finance” from University of Paris 2, Pantheon Assas and a Master’s degree in Financial Institutions Management from Ecole Supérieure de Commerce de Tunis.

As a global authority on Islamic finance, how do you see digitalization reshaping Sharia-compliant financial products and market access?

Digitalization can be a significant accelerator for the Islamic finance industry and particularly the sukuk issuance. Today, the process for sukuk issuance is still more complex, expensive and time consuming compared with conventional bonds. We are of the view that digitalizing this process could reduce costs and time to market and push the industry to standardize its legal contracts so they can be translated into smart contracts. Ultimately, this will open the industry to issuers and investors that are currently excluded from the market either because of the high cost of issuance (for issuers) or the high entry ticket (for investors).

The convergence of digital assets and traditional finance is accelerating. How should regulators approach innovation without compromising stability?

Regulation and innovation go hand in hand: regulators face the challenge of keeping up with the pace of innovation, to adequately monitor and mitigate emerging risks (and prevent risks from becoming material to the financial system), without front-running innovation by developing prescriptive frameworks before innovation taken shape (which risks favoring incumbents).

What emerging trends in Islamic finance do you believe will define the next decade?

In addition to digitalization, sustainable finance is another area that could shape the future of the Islamic finance industry. The industry is concentrated in oil exporting countries that have started their journey toward transitioning their economies from fossil fuel to a more sustainable future. This journey requires significant investments, and we are of the view that Islamic finance could contribute to that. To reach that point, we will have to see not only an acceleration of the implementation of energy transition policies and projects but also a simplification and a standardization of the Islamic finance structures and legal documents.

How do cross-sector dialogues influence global financial literacy and inclusion?

Having a continuous dialogue between all the stakeholders is necessary to ensure that no one is left behind and that stakeholders collaborate together to ultimately increase financial literacy and inclusion.

How valuable do you think data transparency is to both regulators and market participants?

Data and transparency are very important for decision making. In the digital world, S&P Global Ratings contributes to this transparency exercise through our stablecoin stability assessment or our credit ratings on digital bonds for example.

About WikiEXPO Global Expert Interview

As the organizer of WikiEXPO, WikiGlobal is committed to fostering international dialogue and cooperation through offline exhibitions. By engaging with global experts on financial regulation, technology, and governance, WikiGlobal seeks to enhance the integration of fintech and regtech, improve regulatory efficiency and accuracy, and promote industry self-discipline. Through these efforts, we encourage financial institutions to adopt best practices, build a more transparent and resilient ecosystem, and ultimately create a safer trading environment for investors worldwide.