Islamic finance's main promotional pitch is that it wasn't sucked in by the whirlpool that the global financial crisis turned into. Why? Because "the system is transparent, which helps risk-taking and profit-sharing among all, which in turn guides the market in a better direction," is the stock response.

However, reality is sinking in; several Gulf Islamic financial institutions (IFIs) have been recapitalized by their governments while major player Investment Dar defaulted on its Sukuk. Ratings of these institutions have been lowered as the real estate sector just about collapsed, stock markets saw prices tumbling and the liquidity flow turned into a trickle.

It's a picture of contrast half a world away. The economic crisis that developed from the credit crunch has many Asian countries futilely fighting recession. Conventional banks are husbanding their capital resources and battling to minimize non-performing loans. However, the Islamic finance sector is experiencing little detrimental effect. Even though income levels are down, IFIs in the region are far from seeing red.

They are in fact stepping up their level of competitiveness. Countries with tiny Muslim population ratios, such as Korea and Japan, are moving to introduce Islamic finance on their own turf after their multinationals used it to further their businesses in the Middle East and elsewhere. The much lower oil prices may lead to a reduced volume of petrodollars but private wealth in the Middle East remains a huge bounty that Asian IFIs are vying to tap.

Asia is abuzz with talk of mega Islamic banks to be formed with capitalization of US$1 billion. The door has also been opened for law firms to undertake international Islamic finance practice out of Asia.

A fly in the ointment is Shariah interpretation. Because the different schools of thought come into play, "correct" interpretations of products and services being compatible with the Shariah are often a subject of debate. The Middle East market, for example, has the perception that products developed in Asia have only a Shariah "camouflage" and are not truly Shariah in nature.

The newcomers to the sector in Asia are looking to adopt a novel approach, which can be termed as being "all things to all people." Products could be developed that can accommodate a variety of adaptations to suit particular schools of thought. The basic platform will be the standards set by the Accounting and Auditing Organization for Islamic Financial Institutions, with the variations kicking in to suit the target jurisdictions. For instance, a single product can be adapted to meet the requirements in Saudi Arabia, and can be reconfigured for another client in a more lenient jurisdiction.

One country, intending to fast track its Islamic finance industry, is marketing its products in the Middle East by assuring that they will be compatible with the more conservative Shariah interpretation there. It then repackages the same products for other countries with more tolerant Shariah demands. Meeting a client's Shariah compliance needs has become the primary marketing tool.

It's too early to say how the market will respond to such a "supermarket" style of marketing Islamic finance products and services when it has become accustomed to "specialty" shops.