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