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At the beginning of penetration in 2002, the two pioneers of sharia banks namely bank Muamalat and Bank Syariah mandiri have shown their good performance in educating the Indonesian 'trend setters' in using 'new' business model in banking sector. As new comer, by using religion-based positioning these two banks could provides value to a specific segment (those who choose banks for religious purposes) and could be seen as product differentiation. The Indonesian consumer does not consider religion as a significant factor for choosing a bank. The true innovation - the disruptive technology that the Islamic Banking model brings to the industry is the fact that the product/service is (innovatively) relevant to the needs of the consumers. The Islamic banking model provides far beyond its (current) religious-based positioning; but the promotion of these consumer-based benefits is (still) very much overshadowed by its religious-based positioning. This may be the cause to the lack of the (usually) rapid adoption following a launch of a great new product; a typical situation of a disruptive technology. The question arises as who would be better suited to lead this technology. Though Islamic banks are the innovators, their infrastructure and network are very limited compared to conventional banks. If conventional banks were to make their products merely 'Sharia-compliant' by imitating the Islamic bank model, they would be in a stronger position to take up the challenge.
Original languageEnglish
Publication statusPublished - 16 Mar 2017


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