The Islamic Banking sector has progressed significantly in the last 30 years as competition in the banking sector has further intensified due to globalisation agenda and technological advancement.
The Islamic banking industry is set for a steady growth with global assets expected to reach 1.6 trillion dollars by 2018. This extensive growth of the industry is due to many of the technologically driven countries that are tapping into the lucrative industry. And it is forecasted that half of the global population that are following Islam, which comprises primarily of young generation would opt for Islamic finance if Islamic banks are able to offer innovative services as provided by conventional banking services. In meeting the demands of the growing Islamic financial sector, the industry has to effectively implement and adopt their counterparts of conventional bank’s use of modern day technology through the use of mobile internet banking and other innovative software. If the Islamic banking industry embraces the latest developments in technology it will definitely assist in making Islamic banking entities more accessible and attractive to not just the existing customers but new potential clients.
Many Islamic banks have already implemented various methods of technology to cater for the growing demand and keep up with the current trends. The expectations of customers are ever changing and many customers enjoy the convenience of mobile banking, online banking and other technological utilities which make Islamic banking easier for them. Let us explore some technology innovations which have been tested by conventional banking which proven to be successful in providing a differentiated customer experience to increase loyalty and enhance customer satisfaction. This innovation would bring in similar results and benefits if implemented in Islamic banking as well.
1. Multi-channel banking
Customers are able to bank anytime and anywhere with any electronic devices, be it laptop, desktop, smartphone, tablet, television, etc. Funds transfers, bill payments and enquiries can be done online without having to go to a branch.
2. Web 2.0 and Social Media
Digital customers which comprise of mostly the so-called Gen-Y might want to share their banking experience or even opinion on products which might be useful to others and Islamic banks can leverage on social media for viral marketing and brand advocacy to increase their market reach.
3. Tablet banking
The growing use of tablet which is predicted to hit 600 million units in 2017 according to research done by Gartner, shows that tablet banking is emerging as a ‘must have’ for banks. New banking apps would become an alternate self-service channel along with internet banking and mobile banking. Many global Islamic hubs are tapping into the implementation of mobile technology with many Islamic financial institutions offering new services to cater for this exciting sector.
In addition, many Islamic banks have already implemented mobile financial services which have enabled them to enhance their product offerings and services to their customers. Mobile technology for example allows Islamic banks to reach and assist those in needs and enable socially responsible banks to consider the provision of mobile services at reduced or almost zero cost rates. The Islamic Banking industry has made significant progression in the advancement and implementation of mobile technology to offer a contemporary way of banking to cater for the demand of customers. Islamic financial institutions have created innovative mobile banking products to cater for the needs of customers and make Islamic banking more attractive globally. There are many Islamic banks that promote and market these mobile technological methods of banking effectively and collaborate with leading mobile brands such as the I Phone, Nokia and Blackberry. One such example is Abu Dhabi Islamic Bank (ADIB) which is a top tier Islamic financial bank delivered the interactive Ettisalat USSD mobile banking system. This innovative interactive mobile banking service uses Etisalat’s USSD technology and establishes an effective means of communication between the bank and its customer through their mobile phone. The effective technological USSD mobile banking allows customers to make secure real time transactions through their mobile phones as well as accessing the services all from the comfort of their home.
In conclusion, the embracing of technology can further enhance the growth of Islamic banking and finance sector and enable it to compete directly with their conventional counterparts both in Asia and around the world. Today’s innovative customers are demanding for fast and more personalised banking experience and Islamic banks must be able to leverage on the capabilities of new technology and innovations such as the development of Apps for tablet and smartphone users and online media to increase reach to their customers and future customers and in promoting customers’ loyalty