Innovation in service… The Competitive Advantage

For businesses today, having a competitive advantage, in terms of a brand offer is critical.

More and more brands have moved into having a ‘service based’ advantage in order to differentiate its’ ‘brand offer’. Across many categories, this is at times, tough to put in place. Tough, as it’s hard to identify or pin down the significant service offering or delivery which is unique to that brand itself and is sustainable enough for it not to be copied.

Studying a few product categories that the Ummah use, one industry that emerges with a very strong opportunity of developing a truly sustainable competitive advantage is the Retail Islamic Finance Industry.

From the little I’ve been able to study the industry (retail), it seems the operating principles have, primarily, been to re-package conventional financial products and make them ‘sharia compliant’. There could be many reasons for this, but that’s not the purpose of this post. Across markets, the products IFI’s offer also do not have much variation and all are tied up in a labyrinth of sharia compliance, conformity and confounding jargon.

But with a growing global ummah, that has strong disposable income and a penchant for utilising their money for ‘value for money’ products across markets, the lack of simplicity and clarity of brand identity of Islamic finance based retail products seems to be lacking. Having simplicity and ensuring comprehension can, actually, provide the industry (as a whole) huge growth possibilities. Perhaps, this could be due to the fact that finance (as an industry) was primarily a B2B (business to business) function and from the realm of this sector emerged Islamic Finance as an alternative channel of finance and it did not actually develop as a retail product for the financial institutions.

Now, however, with the emergence of Islamic Finance into mainstream finance, the renewed interest in Islamic Finance globally and the resurgence of the ummah, it seems to present both the Islamic Finance Industry as well as the corporates (in this sector) a unique scenario of developing a strong competitive advantage.

But in order to develop this advantage, a re-look at just the product make up or marketing communications would not do. In order to create and deliver such a competitive advantage the entire process of strategic business planning would need to be reviewed. This review is necessary so as to ensure that the end result in terms of the product and brand delivery match up to what the market needs, wants and can bear.

And this becomes the starting point, in order to build such a competitive advantage.


By understanding what are the perceptions, awareness and comprehension levels of consumers for Islamic Finance products and services are, either the industry (as a body) or the businesses (that make up the industry)can develop products that are truly what the ummah need.

Having this vital amount of information would allow the business to:

A. Implement marketing programs which would increase the understanding of the benefits of Islamic Finance products amongst the consumers and thereby increase acceptance

B. Assist in new product development as the development would be based on consumer needs. Thereby acceptance, of the new product, would be there thus guaranteeing revenue returns to the business.

C. Re-design OR bring in innovation (through benchmarking using cross-industry practice) in its service parameters so as to fulfil the ‘expectations of the target consumer’.

If the retail Islamic Finance businesses undertake this paradigm shift, a fundamental “rule of the game’ would change:

–> Instead of operating their businesses on the current “profit making from disguised interest” platform they would move on to the platform of “profit making through service that provides key benefits to society” and (the surprising part is), many of the IFI’s, if they are transparent and up-front and communicate this business objective to the consumer, they will have consumer acceptance and through that generate profits.

The question now is whose going to take that first big step and step out of the “standard-operating-process” and invest in research that goes beyond the usual “product tests” and moves to identify lifestyle cues to aid in product development?


One thought on “Innovation in service… The Competitive Advantage

Comments are closed.