Promising future for sharia banks

Promising future for sharia banks

Ade Jamaludin, Contributor, Jakarta

The main function or role of a bank as an intermediary
institution -- more than saving and borrowing -- is gradually
developing further in line with current public demand.

Likewise, the emergence of sharia banks that are starting to
proliferate in this country, where the majority of the population
is Muslim.

Previously, sharia banks were only popular with a certain
Muslim segment of customers, who believed that interest rates
normally given by banks were a "negative" system and unacceptable
according to Islamic law.

Today, most major banks in the country, like Bank Mandiri,
Bank Negara Indonesia (BNI), Bank Danamon and several others,
have established their own sharia banks to focus on the banking
needs of Muslim customers in Indonesia. However, the popularity
of sharia banks has grown in time and caught the attention of
other segments. The range of products and services offered by
sharia banks has also been expanded to fulfill the criteria of
modern banking.

Bank BII Syariah, for example, makes available the widest
range of products and services to cater to each segment of the
target market. The unique difference is that Bank BII Syariah has
developed specially designed and customized products to match the
needs of middle and upper-class Muslims here.

Just like conventional banks, sharia banks also segmentize
their customers for effective marketing. Premium customers -- the
super-rich of Indonesia -- are also targeted, though sharia banks
realize that competition here is extremely fierce. Not to lose
out to conventional banks, sharia banks also adopt the excellent
service and customer-oriented products and features to retain
their market share and maintain consumer loyalty.

For its privileged clients, Bank BII Syariah offers a
professional private or priority banking service through its BII
Syariah Platinum Access. This highly personalized product-cum-
service gives the "royal" customers hassle-free banking service
in deluxe private rooms. There is no standing in line, of course,
plus all the convenience of state-of-the-art electronic banking
such as transactions via the Internet, as well as debit and
credit cards with higher limits than conventional customers.

A personal financial adviser is also provided. The long list
of classy services includes such perks as valet parking. This
only goes to prove that even for sharia banks, providing top-
notch services is a must in today's era that makes customers --
and the related pampering -- the top priority.

One plus point about sharia banking, apart from its universal
characteristic, is that its products are perceived as
comparatively more fair in the way they are managed in
"trusteeship" style.

Returns on investments are based on profit sharing, while the
range of customers is not limited and varies from small and
medium enterprises to giant corporations, from the low-income
bracket to the billionaires. Now, with modernization and highly
professional services added in, acceptance is growing even
greater.

One thing that is lacking presently is the availability of
sharia banks in smaller towns and rural areas in this country,
although a number of major sharia banks are already starting to
open up offices there. Volumewise and quantitywise, huge
potential and great opportunities abound in these places, where
the majority of people are Muslims. Individually, each account
may be small in amount, but once millions of such small accounts
are multiplied, the total will be a staggering figure. These
smaller locations are not to be underestimated, because to a bank
manager's delightful surprise, even a couple of millionaires
exist here.

Sharia banks, comparatively younger than their counterparts,
the conventional banks, still have a lot to learn from them.
Products and features are not everything. Excellence in service
and features should not only be sweet words printed in brochures,
but actually implemented. The inside-out mind-set belongs to
yesteryear, when banks cared less about customers' specific
needs. Like successful major corporations and conventional banks,
sharia banks now ought to adopt the outside-in attitude so that
the consistent monitoring of latest developments and catering to
customer satisfaction become the top priority in their marketing
strategy.

For sharia banks to be successful in today's era of modern
banking and demanding customers, they have no option but to
incorporate each and every modern banking instrument, including a
customer-oriented marketing strategy.

This and their plus point of strictly adhering to universal
Islamic law in relation to banking, as well as the "magnitude" of
Muslim customers, certainly makes their future quite promising.
In fact, the sky is the limit. -- The writer is product
development manager at Bank BII Syariah