Islamic Bank Retail Management

Islamic management is very influential for the community because with

sharia products the community feels safer and more comfortable because sharia
management is a real sector rather than a money market whether it is financing for
profit sharing, joint venture or equity participation or buying and selling are all
related to the real sector because Islamic banks provide financing in accordance
with Islamic values in the sense that Islamic banks do not attract interest and there
are no high-risk transactions because Islamic banks operate based on the principle
of profit sharing that provides an alternative banking system that is mutually
beneficial for the community and banks.
Retail management is the overall arrangement of factors that affect retail
trade, namely direct trading of goods and services to consumers. Factors that
influence retail business are place, price, product, and promotion known as.
Management is an important thing that can affect almost all aspects of life. In
addition, human management is able to recognize its capabilities, both its
strengths and its own shortcomings. Management also functions to reduce
obstacles in achieving a goal. Islamic management has experienced rapid
development in Indonesia in recent years, because this can show that the
community needs a more reliable economic system based on sharia principles.
This study aims to examine the factors affecting the adoption of Islamic
retail banking (IRB) products and services among the banking customers of
Malaysia. The market share of Islamic retail banking remains low despite being in
operation for the past 28 years. Therefore, an empirical analysis was conducted to
study the usage of Islamic retail banking products and services between the urban
and rural banking customers of Malaysia. Comparisons were also made on the
usage of Islamic deposits and financing schemes between the Muslim and non
Muslim customers. The findings of the study revealed, relative advantage,
promotional efforts, complexity, compatibility and awareness on attributes of
Islamic retail banking as the significant determinants of the usage of Islamic retail
banking products and services. Thus, the findings of this study serves as a
valuable guideline to the banking sector and policy makers to devise appropriate

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marketing strategies to promote Islamic retail banking products and services
aggressively among the banking customers of Malaysia.
He term “Islamic Banking” is defined as the conduct of banking operations
in consonance with Islamic teachings (Mirakhor, 2000; Haque, et al., 2007). The
main principles of Islamic banking activities thus, comprise of prohibition of
interest (riba) in all forms of transactions undertaking business and trade
activities, based on, fair and legitimate profit. Unlike conventional banking
system, the Islamic banking system prohibits usury (riba), the collection and
payment of interest. Instead, it promotes profit and loss sharing principles in all
forms of banking transactions. Other than riba the Islamic banking system also
prohibits monopoly. However promotes giving zakat (alms tax) and cooperation
for the benefit of society, and development of all halal aspects of business, that are
not prohibited by Islam (Haron, 1997; Mirakhor, 2000). Thus, it is realized that
the emergence of Islamic financial system has created a new dimension to the
current economic models (Aziz, 2005; Fazlan and Mohammad, 2007). Qualitative
methodology is taken because this study intendsproduce a sharia bank retail
business model through a process of understanding and analysis a number of
indicators and background of the industry study literature (study of muamalah
fiqh,business model banking studies, comparative studies of business models) in
orderget information from primary and secondary sources.This Islamic bank retail
business study tries to analyze bank operationsSharia currently includes the
challenges of developing the Islamic banking industry withinorder to study the
ideal, workable, and prudent Islamic bank business models in the futurecome.
Islamic banking business models are expected to serve moremany people, answer
the expectations of various parties, in accordance with the character of the
business Indonesian Islamic banking, future oriented and comply with
international standard. The results of the study are in order to support the
development vision and missionIslamic bank retail business in addition to
operating with Islamic, industrial business contractsIndonesian Islamic banking
also grew conducive, healthy, efficient and competitive withprudential principles
that are in accordance with the characteristics of the Indonesian business
community andin accordance with standards set at international level. As

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Malaysia is one of the Islamic countries, the roots of Islamic banking went back to
1963 when the government established Tabung Haji or Pilgrims Management and
Fund Board. The main purpose of established the institution for those Muslim
who are intended to perform pilgrim (Hajj) and invest the savings of the local
Muslims in interest free places. The growth of Islamic banking can be attributed
to the desire of retail banking customers who were striving to invest their money
in accordance with their personal belief. Islamic banks today exist in all parts of
the world and are looked upon as a viable alternative system which has many
banking products to offer. Islamic banking is conducted on the basis of Islamic
principles, particularly the prohibition of giving or taking interest. Islamic banking
is no longer regarded as a business entity striving only to fulfil the religious
obligations of the Muslim community, but more significantly, as a business that is
ineluctably in need for winning over new customers and at the same time
retaining the old one. Gradually, Islamic banking has played such an important
role for the overall Malaysian financial market and in sustaining the acquired
market share it should entail the high customer satisfaction feedback [9]. The
assessments of some of the key antecedents of customer satisfaction in retail
banking have examined some dimensions to the formation of overall customer
satisfaction namely through service quality (SQ) dimensions [10]. Those
dimensions found in the service quality (SQ) are the key contributors that affect to
the customer satisfaction. On the other hand, in a previous Bank Negara Malaysia
Financial Master Plan 2001, it was recommended that under the Institutional
Capacity Enhancement, a complementary measure should also be undertaken in
order to increase the awareness and knowledge of the public on the Islamic
banking operational and product offerings. Regular promotional and knowledge
sharing should be undertaken so as to facilitate the continuous supply of
knowledge in Islamic banking. This initiation could be achieved through the
innovative and capable strategic management team that can provide the effective
knowledge supply. In view of the above scenarios, it is important to have the
support for the Islamic banking growth through the mechanism of applied
customer knowledge (CK) function that can produce the outcome of increased
customer satisfaction as a result from the increase of knowledge. Therefore, this

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study is undertaken in the backdrop of the government of Malaysia’s aspiration of
becoming the main Islamic financial hub and with the focus on the dynamics of
continuous knowledge supply through the concerted medium of CK and SQ
function.Development of Islamic banks for almost 20 (twenty) years its presence
in Indonesia shows better performance, better than institutional and performance
side finance includes an increase in number Islamic bank customers.
However,industrial development challenges Islamic banking is increasing
including operations and models Islamic banks that can be developed forward.
The application of customer knowledge function (CK) to suit in the retail Islamic
banking in Malaysia would in a way instil the level of confidence, trust and
loyalty of the customer and eventually could capitalise bigger market share in the
banking industry. The information needs, problem solving and customer
education which would serve as the functional purposes of customer knowledge
(CK) would become the bridge for the service quality dimension (SQ) to the
supply of knowledge which in turn could increase the customer satisfaction.
Therefore, an empirical study needs to be undertaken in order to show that by
enhancing the application of customer knowledge function (CK) with service
quality dimension (SQ) for a strong customer knowledge model based, a good
vehicle in facilitating the uptrend growth of Islamic banking is being driven on a
right track eventually and would also hold significant importance since the value
derived from both aspects would provide competitive advantages for the
firms.Study of retail business models in banks sharia is arranged to equalize
perception between regulators and stakeholders (Sharia banking actors /
practitioners, academics, Islamic bank customers, supplier, government and
others) regarding benefits and contributions and the values of Islamic banks in
economy. Therefore, coordination of the parties / stakeholders will easier. In
addition, the results of a business model study this is expected to be a reference
benchmark for Regulators (BI, DSN, OJK), and banking business people and
related parties in (i) run sharia banking operations, (ii) increase the role of Islamic
banks for economy and society, (iii) increase the contribution of Islamic banks for
the economy, (iv) increase the durability of Islamic banks against various changes
in the business environment, social and business competition, challenges business

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in the future and, (v) increase the resilience of Islamic banks against the financial /
economic crisis. Then, the final goal It is expected that this study will be
alternative sharia bank retail business model Indonesia agreed upon all
stakeholders (acceptable), workable ones according to business character
Indonesian economy, mainstream Indonesian Islamic banking and character social
culture of Indonesian people as well become the hallmark of the banking industry
Indonesian sharia in welcoming development of the banking industry medium and
long term sharia. Study of bank retail / retail business modelsthis sharia tries to
analyzecurrent Islamic bank operations including development challenges Islamic
banking industry in order reviewing bank business models Sharia is ideal,
workable, and prudent at future. Bank business models Sharia is expected to be
able to serve more people, answer the expectations of various parties, accordingly
with the character of the Islamic banking business Indonesia, future oriented and
comply with international standards. Compliance of Indonesian people against
religious leaders and leaders too is a key development strategy Islamic banking
retail business. Example the most memorable one related to religious behavior and
adherence to the cleric was shown when the issue the imbalance of a flavoring
producta taste that is very popular in Indonesia, can be gradually restored in short
time after religious leaders shown consuming flavoring the taste. In addition, it
needs to be held further research on whether the character this mutual cooperation
culture includes top management decisions on Islamic banking, for example
initiative for financing syndication corporations where Islamic banks can
cooperate to bear the risks and issue financing.

Reference

Adrutdin, K.F., Ali, A., Jaafar, J., dan Hassan, H. 2016. A Study of Retail Islamic
Banking: The Relationship between Customer Knowledge and Service Quality.
Int. J Sup. Chain. Mgt 5 (2): 116.
Mujib, A. 2016. “Manajemen Strategi Promosi Produk Pembiayaan Perbankan
Syariah”. Jurnal Perbankan Syariah 1 (1): 88-89.
Siswahyudianto. 2017. “Menatap Bisnis Ritel Syariah”. Jurnal OPTIMA 1 (1):
46-54.