Product Development in Islamic Financial Institutions (IFIs): A Review on Literatures Rumaisah Azizah Al Adawiyah
Faculty of Economics and Business Education, Islamic Economics and Finance Department, Universitas Pendidikan Indonesia
Abstract
The development of IFIs products are growing rapidly. However, there have been many never-ending critiques intriguing about Islamic Financial Institutions (IFIs) Products which mainly focus on limited instruments such as credit-based instruments, and replicating its conventional counterparts. This paper aims to critically review existing studies related to IFIs product and its instruments, the product development of IFIs and the future agenda for product development for IFIs. This study is built upon literature review of the existing literatures on IFIs, revisiting its objectives, its criticism and looking on Product Development Process of IFIs from previous studies. Considering IFIs product development, so far product development process on IFIs lie on the needs for being competitive thus imitating its conventional counterparts however on the other side there^s a need for developing the instruments without denying the fulfilment of Islamic law (maqasid al sharia) within the process. This study recommends that in adapting the growth of high technology, the change of environment and how Islamic Finance should adapt, the innovation of new products and combining existing products should be generated by combining the current market demands and the alignment with sharia rules. Therefore, this paper implies that there^s a need for comprehensive approach in formulating ideal product development process for IFIs.
Keywords: Islamic Contemporary Financial Products, Islamic Financial Institutions, Product Development Process, Innovation of New Products, Maqasid al Shariah
