What do consumer marketing and retail Islamic Finance have in common? Well, for starters, retail Islamic finance can take a leaf (or rather the entire book!) out of consumer marketing and utilise that available body of knowledge to develop business strategies that are consumer centric in order to achieve organic growth. Or more specifically, utilise social media as a means of engaging with the consumer and achieving growth.

1. IsLAMIc FInAncE EvOLUTIOn Business islamica magazine
By Joy Abdullah
P
ost the global financial cri- and without a full understanding of
sis and the resultant reces- what is the benefit of a particular Is-
from anti-social to Pro retail sion, marketers across the lamic finance based retail product
globe are unanimous in ac- and not finding any easy means of
soCial media as a growth knowledging that the consumers
have had significant changes in the
obtaining this information!
In this bewilderment, one common
driVer in retail islamiC
way they are interacting with brands element that clearly comes through
and organisations. One of the key is the scant knowledge and research
factors for this change is the rise of in the sector that has been impeding
FinanCe social media usage and the group
exchange taking place through on-
line and interest based communities,
its expansion.
Senior industry leaders have been
crying out for increased levels of ed-
What do consumer marketing and retail Islamic Finance have in common? which has blurred the geographical ucation, awareness and change of
Well, for starters, retail Islamic finance can take a leaf (or rather the entire borders of communication. perception. Daud Vicary Abdullah,
book!) out of consumer marketing and utilise that available body of knowl- Global leader of Islamic Finance at
edge to develop business strategies that are consumer centric in order So how does social media, with its’ Deloitte said, “ I would like to press
multitude of interest-based commu- on with my theme of E.P.l. – Edu-
to achieve organic growth. Or more specifically, utilise social media as a
nities, drive growth for the retail Is- cation, Perception and liquidity –
means of engaging with the consumer and achieving growth. lamic finance category? as I sense that most things that are
happening in the world of Islamic Fi-
LET’S START AT nance revolve around these three
THE VERy BEGINNING. important key-note themes.” “It
The Islamic finance industry has, is evident that Islamic Finance In-
so far, neglected retail banking de- stitutions (IFIs), largely driven by
spite the fact that retail banking can commercial goals, have not done
provide it with a funding base more enough to converse the fundamen-
stable than the current, main whole- tal nature of educating and com-
sale and investment business. Ana- municating Islamic Finance’s social
lysts say a number of retail custom- and economic value propositions.
ers would switch from convention-
al banks to Islamic banks for pure- Moinuddin Malim, CEO of Dubai -based
ly religious reasons but customers Islamic banking entity Mashreq-Al-
would move if it was understood Islami, for his part said, “The only
that Islamic retail financial products factor that is causing a hindrance
provided better earnings. “Unfortu- towards the growth is lack of aware-
nately most Islamic retail banks do ness. Islamic banking is in its infan-
not appeal to this big segment in cy stage being just 35 to 40 years
the market place,” Sameer Abdi told old. There’s a lack of awareness
the Reuters Islamic Banking and Fi- about it, so more time and money
nance Summit in Bahrain. need to be spent on research and
Islamic Finance, post the glob- development. The growth that has
al financial crisis, has continued been seen so far has been due to
its’ steady ascendance across the demand, but there are areas which
globe. But each end market (coun- need to be strengthened, especially
try) presents differing positions in the expansion of a product and ser-
terms of market maturity. This is vice base for all segments, to com-
coupled with issues on standardis- pete effectively with the existing fi-
ation, regulations and products that nancial systems.”
appear to be a “me-too” of the con- Given this clamour for education,
ventional retail products. The net re- awareness and a change in percep-
sult is this: a retail consumer mar- tion, let’s take a quick look at why
ket that is bewildered and perplexed retail Islamic Finance is essential
50 www.islamica-me.com www.islamica-me.com 51

2. IsLAMIc FInAncE EvOLUTIOn Business islamica magazine
consumers (Muslims and non-Mus- gagement activities in order to in- TO ACHIEVE THIS, enable the industry to have good,
lims) are individual people with spe- crease the individual consumer prof- SOME STEPS ARE REQUIRED: forward thinking, solution-oriented
cific, individual needs and lifestyles. itability. 1. Identify what are the key interests customers for whom to deliver prod-
These needs change as the con- of the primary target group—the ucts based on consumer needs.
sumer proceeds through his/her 3. PORTFOLIO EXPANSION youth as they provide the opportu- B. Thereafter, the games and sim-
various milestones in life (first job, An additional advantage, of doing in- nity to develop long term customers. ulations will allow for non-industry
getting married, having the first kid, depth consumer segmentation and 2. Identify certain common, inter- based consumers to also look at the
buying a house, etc.) At each of mapping their lifestyles and key mile- ests, such as online games. Take for industry and its overall message.
these milestones in the consumers’ stones in life, would be the ability to instance Sudoku which is not exact- Through such planned activity, re-
life they have a pressing need for foresee potential products that would ly a social game but a logic-based tail Islamic Finance products would
banking products and services that have a ready market. This would aid puzzle. Sudoku has an enormous start being evaluated on their ratio-
‘benefit’ them and are not a general in bringing about products that would online following and has spread like nal (product oriented) benefits and
“one-size-fits-all” types. be viewed as innovative and paral- wildfire in countries such as Japan thereby appeal to the non-Muslim
Consumer marketing dives deep lel to existing conventional products, and the UK. community and be a part of main-
into consumer segmentation in or- thus creating a product differentiator. 3. Identify industry trends that youth stream finance. Introducing such
der to target specific groups to ful- Simultaneously, the lifestyle analysis could follow or latch on to such Ap- options would enable the industry
fil a need that they have and create of a consumer would enable the re- ple products, some of which have to communicate with the youth in
a competitive advantage as well as tail marketing team to look at provid- become fashion statements in their own language and interest ar-
establish a brand differentiator. Re- ing solutions through a suite of prod- terms of trendiness and that, in turn, eas thus drawing them to view (the
tail Islamic finance has yet to make ucts taken together by the consumer spawns tremendous word of mouth information), participate (by playing
effective use of such in-depth con- i.e. “package two or more products online brand through discussion fo- the games or commenting on the
sumer segmentation (which can be and cross-sell” at a single charge to rums and blogs. trends for e.g.) and start to have a
based on various socio-economic the consumer. Such service inno- better understanding of what the Is-
and how retail actually makes log- • It’s less expensive to increase us- and cultural parameters) and anal- vations would help tremendously in SO HOW CAN SOCIAL lamic Finance industry is all about.
ical and profitable business sense: age from an existing customer than ysis on product sales and consum- expanding the retail product portfo- MEDIA BENEFIT RETAIL Such consumer fulfilment would
it is to acquire, educate and create er buying behavior. In practice, re- lio while providing profitability. ISLAMIC FINANCE? lead to engagement between the in-
1. ORGANIC GROWTH: usage from a new one. tail Islamic finance broadly has two 1. Stock-trading games: A Shari’ah- dustry and end users. This engage-
As a profit making business enti- Thus, by interacting with the exist- segments: The key to all this are the consum- compliant stock-picking competition ment would lead to, most important-
ty (and every Islamic retail banking ing customers, and listening to them a) Premium services for the HNW ers. Today, many consumers are us- that can ignite interest at the col- ly, a better knowledge of Islamic Fi-
entity is a profit making enterprise), to understand their needs, the exist- (High Net Worth individual) and ing social media through which their lege/university level – once again nance leading to a demand genera-
generating organic growth is a key ing products can be cross-sold (at b) The rest of the target consumer purchasing and brand relationship a key target –ensuring the applica- tion which in turn would lead to the
strategic area to focus upon. How a lower cost) and additional prod- population. behaviour are influenced. tion contains Islamic finance com- development of products that the
do we achieve organic growth? ucts that have a captive market can By researching and segmenting the Today social media acts as the glue ponents (i.e. cash is held/routed market needs and thus provide a
be introduced. Cross-selling is a fre- consumer groups strategically (i.e. holding like-minded individuals and in- through no-interest accounts, no sustainable and profitable business
Best practices from consumer mar- quently and commonly used tech- marketing objective to be in sync terests together across the globe. It’s comingling of funds, etc.). operation for the IFI.
keting show this can be done: nique in consumer marketing in or- with the business objective and thus this individual interest area that can 2. Trends: Highlight how Islamic A strategic brand marketing profession-
• by offering a number of products der to maximise the brand’s share of identify the types of consumers that be used to spread effective under- banking is growing and occurring in al with expertise in business and brand
that are needed and useful to the consumers’ wallet and to keep brand would be most profitable and sus- standing of what is Islamic Finance. different parts of the world. Put out planning, Joy’s competency is in creat-
consumers AND loyalty while ensuring growth in mar- tainable) and analysing the con- Social media can be a mixed bag information on specific (and prob- ing synergies in the business plan objec-
• that facilitate their lifestyles AS ket share and revenue contribution. sumers’ lifestyle (to identify poten- of tricks. Utilising it, effectively, re- ably common) products such as tives and assisting the brand to deliver
WEll AS The opportunity in retail Islamic fi- tial product requirements), behavior quires having strong consumer in- housing loans, educational loans— growth and profitability. Such synthesis
• by cross-selling the products nance is to improve service stan- and preferences (of types of bank- sights, based on the multi-cultural how the contracts are structured; of strategic planning enables Joy to aid
dards and deliverables in terms of ing services), the retail marketing aspects of the online communities why is there Takaful built-in into the brands in having a strong engagement
Customers have evolved in their communicating the ‘value proposi- team can identify potential product that are the foundation for an effi- product; highlight the benefit of the with brand stakeholders. He has writ-
need for financial services and in tion’ of the brand better while simulta- requirements and forecast consum- cient social media strategy. product vis-à-vis conventional prod- ten many articles on the importance of
the current, post recessionary eco- neously reducing all operating costs. er profitability (for the organization). ucts, and more. ethical brand marketing encompassing
nomic scenario, they are looking But current consumer offers (in re- This kind and amount of in-depth Given the current debates on stan- brand reputation management, brand
for financial products and services tail Islamic banking) have often just analysis would clearly bring forth an dards, retail product acceptance SUCH APPLICATIONS risk, employee-brand relationship and
which are inexpensive and yet pro- been a clone of what the convention- “opportunity cost evaluation” i.e. the across all borders, the need to focus WOULD FULFIL TWO CSR. Articles, by the author, on Islamic
vide them with a higher return on al banks offer i.e. with limited training analysis will aid the retail marketing on liquidity management, and etc., CRITICAL REQUIREMENTS: Business can be viewed at http://rewir-
their investments. The key here is to on how to “fit” a product based on the team to clearly quantify and identify the issue is can social media be an A. Initially, they will build greater in- ingbusiness.com/rewb-islamic-busi-
remember: potential consumers’ need. which types of products or services effective way to spread the ideas/ terest in the Islamic Finance indus- ness-centre/rb-islamic-business-blog/.
• An existing retail customer is some- not to pursue. This aids in conserv- logic of Islamic Finance to widen try from amongst the College/Uni- Joy Abdullah is a Senior Consultant at
one who is already favourable and pre- 2. CONSUMER SEGMENTATION ing resources which can be chan- the industry’s appeal and generate versity students. This brings in a tal- Daily Baraka Ltd and can be reached at
disposed towards the retail brand AND It’s critical to take into account that nelled back into other consumer en- mass acceptance? ent pool considering a career and joyabdullah@gmail.com.
52 www.islamica-me.com www.islamica-me.com 53