A look at Bank Muamalat Indonesia's journey
A look at Bank Muamalat Indonesia's journey
As long as there are no funny moves, being a solo player in a market often bears fruit. This is one of the important lessons to take from the journey of Bank Muamalat Indonesia (BMI). As we know, BMI is the first (public) bank to adopt the Syariah (legal code of Islam) system, and for the moment it is the only player in this market.
On the one hand, its market position is advantageous because BMI has the chance to build customer loyalty. On the other hand, as a bank that practices the Syariah banking system, BMI faces great difficulties in creating a sizable customer base. This is mainly caused by the constraints faced by BMI in educating its target market, starting from limited finances and resources to educate the market to the psychological constraints of its target market.
Faced with these trying conditions, BMI chooses to take extra care in running its banking operations. In the beginning, this particular choice seemed to be disadvantageous to the development of BMI, since BMI could not grow as large as other private local banks. However, BMI continued to remain cautious because it realized that as a new system, Syariah banking not only faced difficulty in educating current and prospective customers, but also was unsupported by a suitable macrosystem. This latter condition limited BMI's ability to move effectively in the money market in the same way conventional banks were able, because of instrument constraints.
Apart from being careful in running its operation, BMI first chose a particular market segment identified by Jeff Moore as the "early adopter". This name refers to the people who basically cannot accept a system of banking that bases its operation on interest. Because of that, the positioning for BMI was to be an Islamic bank. This identification of BMI as an Islamic bank has lasted for some time now and has become deeply ingrained, as revealed in a survey of bank customers from various cities in Indonesia in mid-1999.
Apparently, the almost 1,500 respondents, customers and noncustomers, largely have a strong perception of BMI as the Islam bank. Meanwhile, its perception as a bank that uses a profit-sharing system, or as a bank that does not charge interest also has emerged. However, the perception that BMI is a bank only for Muslims was relatively small.
This is very interesting, because BMI apparently has great growth potential, not only in the segment of early adopter, but also in the early majority or late majority. Moreover, since there have been no funny moves, there is no negative perception of BMI. Taufik