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In this Showcase, Raheel Iqbal, our Managing Partner, speaks with Islamic Finance News about the future of Shariah compliant financing in the age of digitalization.
As digital banking continues to become common practice across banks and financial institutions, enablers must chart out new ways to offer a differentiated proposition that keeps customers engaged. A GCC based Islamic Bank has worked with Codebase Technologies to launch a new instant Islamic personal finance product. The solution allows the customer to apply for personal financing within a streamlined digital banking app, and receive approvals instantly, reducing the banks operating costs by 95%.
1. What does it take to digitize the personal finance application process?
First and foremost, it takes a change mindset, and that needs to come from the top down. Decision makers within the bank or financial institution have to be able to objectify the pain points they seek to remedy. That allows us to initiate a more detailed discussion about how to go about creating a solution.
2. Who does this transformation benefit the most?
There are two sides that win when digitizing existing processes – the institution and, most importantly, the customer. Institutions benefit for a number of reasons; an existing product offering or service becomes faster, more responsive, and the cost to operate is vastly reduced. The relationship between that solution deployment and how it informs institutions about its customers, and the depth to which it can do so, is the most crucial element. The notion that digitization hurts customer relationships is a misconception. In reality, the reverse is true. Institutions can learn more about their customers, and provide value in a more specific, immediate manner.
3. Is digital personal financing a new concept?
Globally, no. Regionally, yes – our deployment is the first of its kind in the GCC. When developing solution concepts with the bank, we needed to consider things like Sharia compliant Murabaha trade management, as well as how to implement a completely frictionless process. This particular client wanted to push the power of choice into the customer’s hands, and build on their existing customer relationships by enabling them to make decisions faster. We needed to utilize Digibanc™ SmartRules to enable connectivity with the national credit bureau, allowing us to deliver instant decision management. We’ve found that, nowadays, customers will always choose the faster option if it meets their needs.
4. Do you think the region is ready for digitized Islamic personal financing?
Absolutely. Islamic banking concepts aren’t new, and the same can be said about conventional banking methods. What we strive to do as an organization is ensure that our fundamental approach to digitization can apply to any banking environment. We know banking, and we know technology. We adopt a modular, dynamic approach to developing solutions in any financial environment, and Islamic banking is no exception.
Tagged:
- global, market insights, sharia compliance
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