ISTANBUL INTERNATIONAL FINANCE CENTER

Istanbul, is the place where continents meet and for centuries has been the main passage and stopover destination for merchants following the silk road. In this frame it has naturally assumed the role of economical central all through from the depths of history.

The Project by Istanbul Finance
Center in a way is the pointer of the increasing importance of Istanbul for the Turkish Republic in recent years. As part of the work and effort to create brand cities to increase the quality of life standards in Turkey; the Project by Istanbul International Finance Center is of great importance. The Project by Istanbul International Finance Center needs to be in application as soon as possible. Heading from the aim of placing Istanbul amongst the most important 10 financial centers by 2023 the planning of the Project by Istanbul International Finance Center has been completed a while ago as a step towards the vision of making “Istanbul a financial center primarily regional and eventually global.” The question of: “What steps need to be taken as part of the vision?” should be considered from a wide perspective. Promotional strategies, target group and channels of communication should be analyzed in detail.

Which are the products to be promoted?
We can group products that require promotion into two:

a. Products regarding banking operations In the past 15 years Istanbul Banks have gained continuous acceleration accept for the 2001 Crisis. According to the data provided by The Banks Association of Turkey at the end of 2017, banks Turkey wide have achieved 75% of total deposit banking and 37% of total savings deposits in Istanbul. As a result of the changes in regulations following the 2001 crisis, our banks have managed to complete the financial year with profit despite the 2009 global crisis, setting an example to the world. The resistance displayed by the banking sector regarding the latest financial crises has been appreciated Active Internet Banking users in Istanbul:5,8 million (The Banks Association of Turkey –2016) 2nd fastest growing stock Exchange worldwide: Stock Exchange Istanbul (CNN Money – 2017) Forward Transaction and Option Market annual transaction volume:1,7 trillion TL (Stock Exchange Istanbul – 2017) by global financial institutions. In Istanbul alone there are 85 thousand bank workers and 5.8 million active internet banking users where there are 47 national and international banks in operation.

b. Products related to Capital Market Operations
Equity shares, stocks, bonds etc. are among products that are the primary Capital Market instruments. The recent performance of the Stock Exchange in Istanbul is considered as great luck. According to a research conducted by CNN Money, Stock Exchange Istanbul has been the second best performing stock Exchange worldwide in 2017 with its total trading volume of approximately 7 trillion Turkish Lira annually. There needs to be promotional efforts regarding insurance operations to insure the products processed in the markets. Apart from these VOIB, short term for Forward Transaction and Option as part of Stock Exchange Istanbul, where there are forwards transactions and option holding deals for certain purchases. The transaction volume within the coverage of VOİB for 2017 has reached 1.7 Trillion TL.

Who should be included in the Target Group?
Once again the Target Group needs to be defined regarding the target set. The steps needed to be taken to achieve the primary target of becoming the Regional Finance Center and the Secondary and long term target of becoming Global Finance Center need to taken one by one.

a. The primary Regional Target Groups should be the Balkans, Middle East, Caucasia and North African countries. In order to attract Middle Eastern Capital there has to be employee training of Istanbul Finance Sector workers regarding Islamic Instruments and their specialties.

b. Global Target Groups
Global players need to be attracted to Istanbul for the long term target of spreading to Europe, the USA, Fareast & South Asia regions. Unfortunately, Credit Rating Agencies have graded our country just below investable levels. There needs to be Annual transaction volume of Stock Exchange Istanbul:7 trillion TL (Stock Exchange Istanbul – 2017) effort to eliminate the double Standard we have encountered to go back again to investable level, which in return will be reassuring for regional and global finance institutions.

What needs to be done to decide on the process to be followed for different target groups??
The first process to be implemented is to develop an IMF awareness for Istanbul and Istanbulites. There are 61 Universities in Istanbul city, the candidate to become an International Finance Center for Turkey that has managed to maintain stable growth, increasing the value of national currency post 2001. These universities could cooperate with the finance sector to help support training of qualified workers and the Banking – Finance related University programs could be reviewed with the update from the IMF program. The support by all shareholders / players of Istanbul region for the project which has been adopted as government policy in a way increases the momentum of the project. The political stability achieved is a positive influence in terms of attracting target groups to Istanbul.  Training about Islamic Finance Instruments (Sukuk, Usuary etc) for the employees in the field will be of great advantage to attract Middle Eastern capital to invest in Istanbul, as mentioned before. In addition to all when we consider regional competition it will be more efficient to make Istanbul Finance Center such as New York and Frankfurt models with certain limitations rather than the total free-zone such in Dubai.

Which means of communication should be used?
There are many channels of communication to be used. It 39;s important to implement the initiative to use these channels. The table below has some examples of the means of communication.
– Preparing a Web Portal and publishing it online on the official site
– Effective use of written and visual Media tools
– Sponsoring / Advertising of International Events

The 2020 Tokyo Olympic games, 2020 Europe Football Championship, 2022 Qatar World Cup etc.
– Organization of events /operations monitored by the IMF Coordinator ship where all private – public finance institutions in Turkey would attend
– Hosting International Finance Events; Conferences, seminars, congresses
– Hosting world famous celebrities, organizing events (concerts, sports events etc.)
– High level politicians (including the ruling party and opposition) and bureaucrats working in cooperation
– Airports, Terminals, Stations decorated with visual and printed materials
– Holding informative sessions at NATO, OECD, G-20, Islamic Conference Organization, EU meetings that we are member to on a Global scale

By: Mehmet Onur Partal

*This article was  published in the  July-August issue of Marmara Life. 

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