Product Development Process In Islamic Banks – A Mixed Method Approach

Abstract

Islamic banking is one of the rapidly growing industry in Pakistan with the expansion and advancement of its product portfolio over the last few years. With the splendid progress, new and innovative products are required by Islamic banks in order to remain competitive as well as to attract new customers. For the development of such innovative and competitive products, adherence of Shariah principles has commensurable importance for building trust, credibility and marketability. Thus, the main objective of the current study is to discuss the role of Shariah compliance in product development process of Islamic banks of Pakistan. An exploratory sequential mixed method approach is adopted to achieve the research objective. In the qualitative phase, the data is collected through content analysis. The quantitative phase builds on the results of the qualitative phase and data is gathered through structured questionnaires from the product development participants of the Islamic banks. NVivo and SPSS are used to analyze the data. The results show that most of the banks always seek Shariah approval in the product development process of Islamic banks in Pakistan and fulfill Maqasid e Shariah while developing new products and services.