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1. Next generation online Islamic
banking portals
Thought Paper
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2. Next generation online Islamic banking portals
Islamic Banking is set for a steady growth, with Islamic finance, if Islamic Banks offer advanced
global assets expected to cross $2 trillion by and innovative services as provided by
2015. Research suggests that half of the global conventional banking services.
population that follows Islam would opt for
The state of online Islamic banking today
Conventional banks have heavily invested on Very few Islamic banks are offering customer
digital channels which has transformed the way service through digital channels. Majority of
they offer banking services to their customers. the customers still seem to prefer the brick and
They have reached a state where customers mortar structure than any other channels.
are able to do financial and non-financial While basic services like account inquiry and
transactions online, wherever they are, thanks transfers are offered online, interactive and
to internet banking and mobile banking. Digital advanced services are yet to be offered through
consumers prefer doing their own research online channels. Research however shows that
before taking a decision on the best suited online Islamic banking is poised to take a big
product or service offered by their banks. They leap forward in the coming years.
can interact or set up a meeting with their
relationship managers online, through unified
communications technology.
10 incremental innovations to redefine
online Islamic banking
While research indicates that there is a huge customer experience to increase loyalty and
market for Islamic Banks, it is necessary that customer satisfaction index. Many of these steps
they embrace digital channels too to attract and have been tried and tested in conventional
retain their customers. Internet browsing speed banking and have proved to be successful in
is improving day by day. Newer devices and delighting customers. They would definitely
gadgets are being launched every day. And the bring in similar benefits when implemented in
tech savvy digital consumer is ever ready to Islamic Banking as well.
adopt anything that makes life easier. The time
1. Multi-channel banking – Banks and financial
is just right to tap these technological advances
institutions offering Islamic banking have to
and fulfill the ever increasing needs of the
open up more touch points to customers.
digital generation.
Let the customer bank anytime and
Let us explore 10 incremental innovations that anywhere, with any electronic device they
would define the next generation online Islamic have – be it desktop, laptop, tablet, mobile
banking portals and provide a differentiated phone, television or even their play station.
02 Thought Paper

3. Transaction volumes are bound to increase off in advanced markets, enabling easier
with increasing ease of access to banking realization of money once the check is
services. Funds transfers, payments, bill deposited. Advanced image recognition
payments, inquiries and service requests can technologies can enhance the image quality
be initiated online, without having to go of the check as per the specifications, thereby
to a branch. Customer origination, account reducing image quality based rejections.
origination and verification procedures can Adequate fraud detection and prevention
also be initiated through online channels technologies are available as well to reduce
and can be completed through call center online check image related frauds.
or branches. Conventional bank branches
5. Family banking – Let your customers manage
have achieved significant productivity
accounts belonging to their family members
improvements by launching online channels.
through online banking. Parents could be
Branch staff can divert their attention to
allowed full control of their kids’ account,
other critical tasks, which mandatorily needs
including inquires and transactions. Parents
human intervention.
could also set transaction limits or even
2. Product catalogues – Share products and restrict payments to online shopping sites
services related information online. Let through their kids’ account. Personal finance
customers know when their bank offers new management can be extended to plan
products, along with product details. Allow a monthly budget, and they could even
them to select products they are interested monitor the spend patterns of their kids.
in and analyze them before deciding the While kids get to plan their finances, it gives
best option suited to their needs. Making greater control to parents as well.
information accessible, along with rich
6. Web 2.0 & social media - The digital consumers
graphical user experience, goes a long way in
would like to interact with their friends
enticing customers.
and seek their opinion on products. They
3. Customer acquisition - Many banks in might also want to share their banking
advanced countries have already made a experiences which might be useful to others.
move towards online account opening and Such information and recommendations act
customer acquisition. Prospects can view the as indirect marketing for banks. Banks can
products online, and apply for products by leverage social media for viral marketing and
providing necessary identification documents. increase their reach. While making secure
The entire process, including application banking services available through social
filing, identity and address verification, media portals, banks also need to ensure that
signature capture and creating new account, necessary safety measures are put in place for
can be accomplished online. Business rules protecting the privacy of customers.
can be set to have the entire process
7. Financial planning tools – Visual representation
automated as well. Islamic Banking can also
of calculations are always appealing to
adopt these techniques to initiate customer
customers. How about showing a graphical
acquisition and account opening and
comparison of financing with different
online. These steps help banks in increasing
options, so that the customer can make an
customer base and also increase the
easy decision, instead of showing a table with
productivity of bank employees.
data comparing the products? How about
4. Remote deposits – Allow customers to upload a product comparison chart showing the
scanned images or photo images of checks attributes and benefits of different products?
taken using mobile camera, with certain A variety of tools including charts and
specific image quality, instead of walking up graphical illustrations can be used to explain
to the ATM or Branch for depositing their the products, through internet banking and
checks. Remote deposits have already taken mobile banking. These tools can be designed
Thought Paper 03

4. to take inputs from the customer and provide even tips on savings options. Remote advisory
illustrations in a way that is preferred by services, where customers can interact with
the customers, thus giving an interactive their relationship managers or customer care
experience and enhancing self service capability. representatives online, would go a long way
in creating a loyal customer base. Knowing
8. Layered analytics - The ability to analyze
the customers and their needs, relationship
customers’ data in different dimensions, to
managers can provide them effective
derive intelligent actionable insights, is the
guidance - to increase their savings, reduce
next wave in banking analytics. Consider a
their spending, reduce their debts etc.
customer, who may be doing frequent high
value transactions through mobile banking- While considering such innovations, banks
he can be protected using additional must keep the “4C”s in mind – 4 key themes
authentication measures for performing which are important for the success of an online
these transactions and can be alerted over banking portal:
an e-Mail as soon as the transaction occurs.
• Community: Bring like-minded customers and
Similarly, a customer who generally uses
prospects together under a common platform,
internet banking for inquiry purposes could
and allow them to interact online. Create
be offered a discount or reward points for
online communities and discussion forums.
paying bills online.
• Communication: Allow secure interaction
9. Tablet banking – According to Gartner, the
amongst customers and easy access to bank’s
worldwide sales of Tablets is going to hit
staff members. Effectively communicate with
320 million units in 2015. The growing usage
the customers about new products and
of tablets is set to continue for the next 5
services and Islamic banking concepts.
years, irrespective of customer segments.
Enable mass usage of content created by
From ‘good to have’ today, tablet banking
online communities.
would soon be a ‘must have’ for banks. A
banking portal or app, leveraging the user • Collaboration: Enable customers and prospects
experience capabilities of tablets, would to collaborate with the bank, and co-create
become an alternate self service channel, products and services that suit their needs.
alongside internet banking and mobile banking. Online communities and social media would
enable collaboration and co-creation.
10. Advisory services – While banking on self-
service channels, certain instances would • Commerce: Create an ecosystem where
make the customers feel the need for traders, suppliers and consumers can interact
personal assistance. It could be for discussions and collaborate and have a differentiated
about a new product offering, or guidance e-commerce experience.
on initiating some transactions online, or
04 Thought Paper

5. Benefits
Today’s digital generation need rich and in online marketing and help in increasing the
personalized online banking experiences that is reach to customers and prospects. Productivity
safe and secure. Innovative customer experience of bank employees can be increased by offering
offered through multiple channels and devices more and more features through online
is one of the critical success factors for the banking. Customer service cost is much lesser
uptake of new generation portals. for the internet and mobile channels, as
compared to branch or call centers. For the
Islamic Banks can leverage the capabilities
customer, it is anytime, anywhere access
of online media and other technological
combined with compelling user experience and
innovations to entice the digital generation and
personal assistance wherever necessary.
create a pool of loyal customers, who can be
the banks’ ambassadors. Online portals can aid
Conclusion
Internet and mobile penetration continues to to customers, empowering them with more and
rise, and so does banking on these channels. more self service capabilities, providing them
As the digital generation constitutes a major multiple access points and making banking
chunk of the online banking population, it is easy and enjoyable for them would lead to
essential for banks to provide a differentiated positive results. As more customers start using
experience through online banking portals new generation portals, they would act as
and mobile apps. The story is no different for ambassadors for the bank and indirectly help
Islamic Banks. Innovative ways of reaching out in enhancing revenue.
References
1.
Celent: The next chapter in Islamic 3. Ernst & Young: The World Islamic Banking
Finance Report Competitiveness Report
2. Gartner:http://www.gartner.com/it/page.jsp?i
d=1980115
Arunnima B S
Principal Consultant, Finacle, Infosys
Teena Nair
Senior Consultant, Finacle, Infosys
Thought Paper 05

6. About Finacle
Finacle from Infosys partners with banks to transform process, product
and customer experience, arming them with ‘accelerated innovation’
that is key to building tomorrow’s bank.
For more information, contact Finacleweb@infosys.com www.infosys.com/finacle
© 2012 Infosys Limited, Bangalore, India, Infosys believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Infosys
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