UKM experts have developed HiCORE, a software for retail Islamic banking
BANGI, 30 July 2010 – A software for Islamic banking to operate at the retail level has been ready for five months and it is now up to the banks to use it to take the country to a higher level of Islamic banking.
The group of experts in ICT, Banking and the Syariah from Universiti Kebangsaan Malaysia (UKM) who developed the system are waiting to see their project take to the field and end all the confusion and complaints over the bank counter regarding shariah compliant transactions at the retail level.
Called “HiCORE” or Holistic Islamic Banking System, the system for retail banking had been designed and built, based on Syariah principles and requirements, unlike the current Islamic financial products that were built from the conventional banking system.
“In HiCORE, we built from ground zero, with inputs from a panel of experts from different disciplines like Syariah, Economics and Banking, ICT and Business,” said team leader Prof Dato’ Dr Halimah Badioze Zaman of the Faculty of Information Science and Technology of UKM.
She said with the focus and scramble for interest-free Islamic finance and banking products in the world market today, HiCORE was conceptualized, designed and developed for Islamic banking with a grant from the Ministry of Science, Technology and Innovation.
Started as a university and industry collaboration initiative with Fuziq Software Sdn Bhd, HiCORE is a virtual multi-tiered system adopting the Services Orientation Architecture (SOA) and parameter driven modules to create a new Islamic banking system, based on Syariah principles.
This means that Islamic principles relevant to Islamic Banking are prepared and incorporated into the HiCORE system by the relevant experts and specialists from the university.
The software consists of three components: The Islamic Modules and Sub-modules; the Framework and the Enterprise Application Integrator (EAI).
While the framework, modules and sub-modules cover the system administration, customer information, deposits, financing and reporting, the EAI allows the software to be integrated with the conventional banking system.
A unique feature of HiCORE is that in addition to the Syariah principles set in the system, users will be able to add in other Islamic principles deemed fit.
Being parameters driven, the users will also be able to use the software to create new products that conform to Islamic principles. While it would generally take at least six months for a bank to create a new Islamic product, HiCORE can reduce it to four months or less. 
Security Issues
Prof Halimah said it was precisely because of the very concern over security by banks that HiCORE was developed and based on Multi-tiered Services Oriented Architecture (SOA), with all the security features to safeguard and prevent any breaches or hacking.
“We will discuss and meet any security concern of the bank if it were to buy and integrate HiCORE into its operations,” assured Prof Halimah.
Likewise, they would provide all the training necessary for the bank staff to optimize the use of the software.
All these will be part and parcel of the package, she said, adding that she and her team are in for the long term as they have moved on to work on Islamic corporate banking and Treasury.
Prof Halimah said she and her team of researchers had put the HiCORE software system through various tests, not least of which was the User Acceptance Test.
In this test, 15 members from the Islamic banking industry in the country were invited to a panel of experts who tested the system on its Al-Wadiah Savings, Al-Mudharabah Investment and Al-Bai Bithamin Ajil Financing operations.
Even though they gave high marks for all the Islamic products offered by HiCORE, these experts were not decision makers of the banks and was thus still not adopted by any bank as yet.
International recognition for HiCORE came when it was appraised and listed by the Software Engineering Institute of Carnegie Mellon University of the United States in September last year.
Also in HiCORE’s bag is the Gold medal awarded by ITEX Malaysia 2009 (the International Invention, Innovation and Technology Exhibition, Malaysia) and the Special RamRais Award for Best ICT Invention 2009.
Prof Halimah said they had received several enquiries, including foreign ones, about the software and they had moved to patent it.
Funds Available
With Islamic banking being one of the primary focus of the 10th Malaysia Plan launched last month, industry players have every opportunity to tap into one of the special funds created to promote innovations and technology, especially home-grown ones.
Foremost is the Mudharabah Innovation Fund of RM500 million to provide risk capital to Government venture capital companies, the RM20-billion Facilitation Fund to help the private sector to finance public-private sector partnership projects or the Business Growth Fund.
The latter, which has an initial allocation of RM150 million, is to bridge the early stage of commercialisation and venture capital financing for high tech products.
When asked if these funds could be utilised by banks to acquire HiCORE, Prof Halimah she was not sure because she is an ICT specialist, not a businesswoman.