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azerbaijan: emerging market islamic banking and finance

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NEWHORIZON Shawwal–Dhu Al Hijjah 1429<br />

ANALYSIS<br />

over their foreign counterparts in Iran. The<br />

Shari’ah law difference between Shia Iran<br />

<strong>and</strong> Sunni Middle Eastern countries is a<br />

considerable obstacle in the way of a<br />

successful implementation for international<br />

suppliers.<br />

Meanwhile, local specialists have in-depth<br />

knowledge of the legislative requirements<br />

for <strong>banking</strong> operations in Iran. ‘Some<br />

banks have tried Misys [UK-based] <strong>and</strong><br />

deal to replace System Access’ solution at<br />

Zamin Bank, but the implementation never<br />

went ahead. Ayoub admits there was just<br />

too much customisation involved – in<br />

addition to different Islamic rules, there<br />

was also the issue of a Farsi calendar, which<br />

is nothing like a conventional one. The<br />

bank ‘wanted to start very quickly’, but<br />

the work required would have been<br />

immensely time-consuming. Ayoub regrets<br />

pulling out. ‘It’s a pity, because it is a nice<br />

place. I visited six months ago <strong>and</strong> I loved it<br />

there. You don’t have to follow the press,<br />

you have to go there <strong>and</strong> meet people.’ He<br />

adds that he would like Delta to go back<br />

to Iran, but realises that ‘the <strong>market</strong> is<br />

difficult’ for the company to gain a strong<br />

foothold.<br />

Despite the challenges, Iran could prove to<br />

be a hotbed for core <strong>banking</strong> systems<br />

activity in the years to come.<br />

© Klaas Lingbeek-van Kranen iStockphoto.com<br />

System Access [Singapore-based], but later<br />

switched to our solutions because of the<br />

Islamic specifics <strong>and</strong> amount of work <strong>and</strong><br />

cost involved in changing <strong>and</strong> adapting<br />

the systems,’ claims Torabi (System Access’<br />

acquisition by a US company, Sungard, is<br />

cited by this company as the reason).<br />

Nevertheless, one bank is persevering<br />

with a foreign implementation – stateowned<br />

Keshavarzi, Iran’s agricultural bank.<br />

It is implementing the Bancs core system<br />

from an Indian vendor, TCS Financial<br />

Solutions (NewHorizon, January–March<br />

2008 issue).<br />

Iran is a big country <strong>and</strong> a big <strong>market</strong>. The majority of the banks<br />

here still have in-house solutions, but are now starting to turn to<br />

specialists for modern core software.<br />

Ahmad Mirzaei,<br />

Kishware<br />

French supplier, Delta Informatique,<br />

also attempted to enter the Iranian<br />

<strong>market</strong>, albeit unsuccessfully. According to<br />

Georges Ayoub, Delta’s sales manager,<br />

the company carried out an extensive<br />

<strong>market</strong>ing campaign there <strong>and</strong> found a<br />

reliable local partner (a company that<br />

used to collaborate with System Access).<br />

Together with this firm, Delta signed a<br />

www.newhorizon-<strong>islamic</strong><strong>banking</strong>.com IIBI 41

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