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Examining financial needs of banking customers for product development in Islamic banking in Indonesia

Examining financial needs of banking customers for product development in Islamic banking in... This study aims at product development in Syariah banking, using the theory of Pyramid of Maslahah. Product development are important aspects of Islamic banking to realize Maqasid Al Shariah and to better serve the real economy.Design/methodology/approachTo understand the needs of the customers, this study uses qualitative approaches and collects primary data from semi-structured interviews of 25 banking customers in Indonesia.FindingsThe study found that the group of respondents who have similar characteristics in age, marital status and number of kids tend to have similar financial needs. Some of the needs that have not been fulfilled by Sharia banking are the needs for investment in banking products, the needs for pension plan products and the needs for travelling-related financial products.Practical implicationsThis study proposed that Islamic banking should provide financial products that cater to three needs of the society, including the needs for necessities/essentials (daruriyat), the needs of complementary requirements (hajiyyat) and the needs for beautifications or embellishments (tahsiniyat), to be able to better serve the real economy.Originality/valueFinancial needs and the life cycle approach can be used for product development in banking industry. However, this approach has not been widely used for consideration in the development of Sharia banking products in Indonesia. This study provides some novelty in Islamic banking customer behavior, especially in understanding financial needs based on the theory of Pyramid of Maslahah. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Islamic and Middle Eastern Finance and Management Emerald Publishing

Examining financial needs of banking customers for product development in Islamic banking in Indonesia

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References (28)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1753-8394
DOI
10.1108/imefm-11-2018-0378
Publisher site
See Article on Publisher Site

Abstract

This study aims at product development in Syariah banking, using the theory of Pyramid of Maslahah. Product development are important aspects of Islamic banking to realize Maqasid Al Shariah and to better serve the real economy.Design/methodology/approachTo understand the needs of the customers, this study uses qualitative approaches and collects primary data from semi-structured interviews of 25 banking customers in Indonesia.FindingsThe study found that the group of respondents who have similar characteristics in age, marital status and number of kids tend to have similar financial needs. Some of the needs that have not been fulfilled by Sharia banking are the needs for investment in banking products, the needs for pension plan products and the needs for travelling-related financial products.Practical implicationsThis study proposed that Islamic banking should provide financial products that cater to three needs of the society, including the needs for necessities/essentials (daruriyat), the needs of complementary requirements (hajiyyat) and the needs for beautifications or embellishments (tahsiniyat), to be able to better serve the real economy.Originality/valueFinancial needs and the life cycle approach can be used for product development in banking industry. However, this approach has not been widely used for consideration in the development of Sharia banking products in Indonesia. This study provides some novelty in Islamic banking customer behavior, especially in understanding financial needs based on the theory of Pyramid of Maslahah.

Journal

International Journal of Islamic and Middle Eastern Finance and Management – Emerald Publishing

Published: Nov 11, 2019

Keywords: Islamic banking products and services; Sharia banking; Financial needs; Product development; Pyramid of Maslahah; G20; G21; G40

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