Islamic Finance gif
by an independent Shariah advisory board, pass regulatory tests and be adapted so that they fit on HSBC’s U.K. product platform. The cost of this process is inevitably passed on to clients. Most accept that there is a mar- ginal cost for peace of mind,” he concludes.
Once you have identified the challenges that your company or financial institution faces when marketing an Islamic financial prod- uct, you can begin to consider how to target your desired market.
Ideas for Marketing your Islamic Brand There are various ways that you can market your Islamic brand effectively, and target your intended audience, through the use of key networking and building up your brand. These are outlined in Figure 5:
In order to establish effective branding strat- egies within the highly competitive Islamic finance industry, the need for networking is crucial. Those who attend Islamic finance seminars get the opportunity to meet key in- dustry players, whose approval of and aware- ness of your brand could unearth previously hidden opportunities.
In addition, networking events help Islamic experts in the finance field to meet each other. If you attend one of these events, you could and set up a day for your financial institution to discuss and promote Islamic finance by using the first-hand experience with Islamic scholars and community lead- ers.
Advertising is a key form of promotion, and Islamic financial professionals can choose Halal Islamic brands to better endorse their products or services.
By utilising the full and prevalent range of Islamic media, you can target a Muslim mar- ket, and develop public awareness of Sha- riah compliancy, so that you can gain further access to your region’s non-Muslim market.
Another effective branding method used by Islamic financial professionals is to attend Global Islamic Financial forums, where you can obtain sponsors and can promote your product or service effectively.
Gaining sponsorship from accredited Islamic financial institutions can also give your prod- uct or service a more reliable image, and give potential buyers trust and confidence in your company.
The overall key to branding within this mar- ket is to use networking to work your way to successful Islamic product promotion. Es- tablishing sound contacts within the indus- try can further help your brand to excel.
What are the key factors that an Islamic finan- cial institution or business has to take into account when marketing Islamic banking and finance products? Regardless of whether a financial institution is Islamic or not, it is always important to highlight what benefit the institution’s product offering that is not available elsewhere; as customers want to know what benefit there is in choosing one product over another. Often the benefit is viewed or promoted in financial terms; whereas the objective of Shariah is the attainment of ben- efit and protection of the people. Therefore, if Islamic banks are to be successful in promoting their products, they have to be able to demon- strate how the individual, or society, will genu- inely benefit from its use.
In addition, the nature of each financial institu- tion will dictate its marketing requirements. Thus we find that with respect to wholesale banking, at the heart of the Islamic vision for an economic system is business participation and real trade. Therefore, Islamic wholesale banks can benefit from highlighting the participatory nature of their business dealings that requires profit and risk sharing. In fact, at a recent conference, a cus- tomer of the Islamic wholesale bank, QIB (UK), openly testified and praised the conduct of the bank for genuinely being concerned about the needs and welfare of his business.
On the other hand, the concept of ethical banking appears to have worked well for the retail mar- ket. For example, Islamic Bank of Thailand, the only Islamic retail bank in Thailand, made con- tinuous losses year-on-year until they changed their marketing strategy concentrating on the ethical dimension of their products. As a result, their business expanded and profits surged. This is a lesson that Islamic Bank of Britain, the only Islamic retail bank in the UK, could learn in order to change their fortunes as their strategy of mar- keting towards the minority Muslim population restricts their market share.
How have marketing Islamic finance products evolved over the years and what effect has this had on industry exposure? Islamic finance was first introduced to custom- ers through the notion of Shariah-compliance which was used to distinguish Islamic finance from competitors. Moreover, during the indus- try’s infancy, Islamic financial products were usu- ally more expensive than similar conventional products due to having to comply with Shariah requirements; which in turn meant that in order to attract customers, financial institutions relied on customers who were willing to pay a premium
Rahim Ali, Institute of Islamic Banking and Insurance (IIBI), Researcher
for Shariah-compliance. As result the customer base remained very small and this marketing strategy was unsustainable in the long-run. How- ever, as early as 1994, the late Mr Muazzam Ali, Founder of Institute of Islamic Banking and Insurance (IIBI), presented a paper on ‘Market- ing Strategies for Islamic Banks’ in which he stressed that, “While a marketing strategy for Is- lamic banks must exploit their moral and ethical basis, they must also make every effort to make them at least as profitable, if not better, as the conventional banks so that they can offer good returns for their clients.” Thus, the industry par- ticipants actively lobbied to create a level play- ing field for Islamic financial products competing with conventional banking products and this has resulted in the lower costs that we see today.
As the industry drives towards relative maturity, financial institutions offering Islamic financial services are now able to compete on price and other economic considerations in addition to pro- moting Shariah-compliance. This has supported their growth and allowed them to increase their market share.
What are the advantages of using Shariah compliant marketing to promote Islamic fi- nance products? If Shariah-compliant marketing refers to a proc- ess of approval/certification by a Shariah schol- ar with respect to promotional material, I think such a move may be fraught with danger if not implemented coherently and consistently. This will be difficult to achieve because there exists significant potential for marketing material to be regarded as misleading or exploitative which will consequently compromise the integrity and influ- ence of Shariah-compliance certification. The finance industry is one in which a significant pro- portion of customers enter into contracts whilst being ignorant of many clauses they are made to agree to, and therefore, it is inevitable that cases of misleading marketing will arise.
Given that Shariah compliance requires honesty and transparency as a must, any promotional material deemed as Shariah compliant which is subsequently regarded as providing confus- ing, ambiguous or even deceptive information will harm the integrity of the Shariah compliance certification process and the reputation of the in- dustry. This is already evident within the Islamic finance industry itself whereby a number of du- bious Shariah-compliant financial products have led groups to consider the entire industry as de- ceptive and a sham.
This may be the reason why the overall uptake by the Muslim population is still a very small share of the total market size. Moreover, using Shariah compliant marketing would also discour- age potential non-Muslims clients who will asso- ciate Shariah as having a religious connotation. Rather, marketing strategies for Islamic financial products would benefit from highlighting the so- cial charitable benefits to society that are notice-
able by all segments of society.
2012 May Global Islamic Finance 31
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88