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Cultivating opportunities in Indonesia’s Islamic financial industry
By expanding financial inclusion, companies can broaden the market to use their products and services while more people get served.
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A Bank Mandiri Syariah employee serves a customer at the lender’s Central Jakarta office in this undated photo. (JP/Wendra Ajistyatama)
T
he Islamic financial industry has entered a new era with the emergence of digital technology and increasing demand for financial products and services from the Islamic community. Companies tapping into the Islamic financial industry, especially in Indonesia, must develop innovative products and services with the customer in mind for their long-term success, ensuring that they are easy to use and understand.
They need to focus on providing their customers with the best possible sharia-based products and services and keep abreast of technology that reflects the core principles of sharia economics. Companies should research customer needs and preferences and develop products and services that meet those needs. This could include developing products and services that help customers save and invest, manage their debts and make the most of their Islamic finance products.
Companies need to provide customers with guidance and support to help them make informed decisions when it comes to their finances. This may come in the form of educational materials, online tutorials and courses or other resources that can help customers understand and use financial products in a sharia-compliant manner. Companies must strive to be transparent and provide customers with clear and understandable information about their products and services.
For Indonesia, with the world’s largest Muslim population, companies can offer products and services that are tailored to the needs of the agricultural sector, which is a major area of economic activity in Indonesia. Additionally, companies can provide products and services that meet the needs of the retail banking sector, which is another substantial area to serve. Loans with profit and loss sharing mechanisms that reduce the borrower's burden when compared to the low interest rates offered by traditional services can be an appealing financing option. The growing retail investment in Indonesian government bonds also creates a huge opportunity for companies offering sukuk (Islamic bonds). As Islamic finance market is still an emerging industry in Indonesia, there is a huge opportunity for providers who can provide innovative solutions to meet those all needs.
In order to ensure that Islamic finance is beneficial to both Indonesian customers and the industry, Islamic financial products and services should be then designed to promote financial inclusion in Indonesia. By expanding financial inclusion, companies can simultaneously broaden the market to use their products and services while more people get served.
On the other hand, when it comes to technology in the Islamic financial industry, the focus should be on technology that reflects the core principles of sharia economics. Technology has always been an integral part of the Islamic financial industry, and it is important for companies to remain at the forefront of the latest technological advances.
They should ensure that their technology is user-friendly, so that their customers can easily access and use the services they need. Technology should be used to help companies achieve their goals, and make sure that the products and services offered are in line with sharia principles. This means that they must take into consideration the principles of equity, fairness and justice when using any type of technology in their operations.
