Toward new strategies of Islamic financial products development

Walid Mansour

Journal of Islamic Accounting and Business Research, 2020, vol. 11, issue 10, 2053-2067

Abstract: Purpose - This paper aims to propose a conceptual framework for the assessment of Islamic financial products’ development. Design/methodology/approach - A coordinate grid with two perpendicular axes (profitability and compliance to Shari’ah) is developed and used to produce a nine-zone matrix. The research design is further developed by using a linear, composite index to assess product development feasibility and specifications. Subsequently, three strategic paths are identified: profitability-led strategic path, compliance-led strategic path and intermediate strategic path. Findings - The findings indicate that the ideal strategic behavior the Islamic financial institutions have to borrow corresponds to the intermediate strategic path because it optimizes the trade-off between the two attributes under consideration. A proper development strategy of Islamic financial products should not ignore the compliance to the substance of Shari’ah and combine it simultaneously with profitability. Originality/value - The paper’s originality consists in the identification of the portfolio of Islamic financial products’ strategic positioning in the nine-zone matrix and the determination of the most suitable product development strategy.

Keywords: Islamic finance; Islamic financial institutions; Strategic innovation; Islamic financial products development; O31; Z12; L25; G21; G11 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jiabrp:jiabr-09-2018-0135

DOI: 10.1108/JIABR-09-2018-0135

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