TURKEY'S PARTICIPATION BANKING VISION FOR 2025
Project coordinator Fatma Çınar outlined the strategy update process of the Participation Banking Strategy Document of Turkey with 2025 vision, which was originally prepared in 2015
Originally prepared in 2015, the Participation Banking Strategy Document of Turkey is updated for 2025. What are the goals for the next five years?
We felt the need to prepare a Participation Banking Strategy Update Report (2021-2025) of the Banks Association of Turkey (TKBB) in line with our mission to develop participation banking in a sound and sustainable way in light of all the changes in today's banking conditions, and in organisational and individual customer behaviours due to the novel coronavirus (COVID-19). Under the coordination of TKBB and a private consultancy company, a report study covering the last 12 weeks of 2020 was completed. The strategy report update included the reviewing of the global and local situation of participation banking, identifying the current statuses of the actions completed in 2015, and coming up with new strategies for the 2021-2025 period. And the goal of reaching a 15% market share in 2025 that was determined in 2015 is still relevant in our updated strategy report.
A three-phase methodology was adopted in the project management phase of the Turkish Participation Banking 2015-2025 Strategy Update Report, resulting in Participation Banking Sectoral Research, Turkish Participation Banking Market Size, Future Predictions, and Strategy Update studies, respectively. Both domestic and foreign reports were studied to get to know the ecosystem and identify the shareholders, and meetings were held with the shareholders in the participation banking ecosystem. We met with over 20 shareholders both in the public and the private sector.
Finance Office of the Presidency of Turkey, Ministry of Treasury and Finance, BRSA, CMB, BIST, TÜRİB, Eximbank, TSB, İstanbul Financial Centre, participation insurance companies, Institute of Islamic Economics and Finance of Marmara University, and participation banks are among the institutions that we contacted. Market size projections were made for the goal of reaching a 15% market share in the Turkish banking sector by 2025, which was determined in the Participation Banking Strategy Document of Turkey (2015-2025) and is still relevant in the Participation Banking Strategy Update Report (2021- 2025). The vision, mission, and strategic goals defined in the Participation Banking Strategy Document of Turkey (2015- 2025) were discussed with the ecosystem shareholders, and the current statuses of the actions were reviewed. New strategic goals and actions were determined with a new road map and responsibility matrix. The updated strategic report includes 10 strategies and 23 actions under the six fundamental strategic goals, being Communication, Ecosystem, Product Diversity, Standards and Governance, Digital and Competence Building. 84 actions placed under five fundamental strategic goals (Sectoral Strategy, Product Diversity, Advisory Boards, Education, HR, Certification and Corporate Communication, Perception, Reputation) defined in 2015 in the Participation Banking Strategy Document of Turkey (2015- 2025) were reviewed one by one; of which 49 were reported to be completed, and the remaining will be followed up in the new report.
The main points of focus for the next five years can be summarised as strengthening the relations between participation banks and their customers, increasing awareness of the operation processes, and functioning of the interest-free finance system, improving the cooperation mechanisms with the shareholders of the ecosystem, increasing digital competence, providing product diversity for customer needs, and increasing the interest-free finance illiteracy.
STRATEGIC GOALS FOR THE 2025 PARTICIPATION BANKING VISION OF TURKEY
Participation banking total assets grew by 24% between the 2015-2019 period while this rate was 16% in conventional banks. In the projection study of the Participation Banking Strategy Update Report (2021-2025), it was considered that the current growth trend in the banking sector would continue between 2020-2025 period, the effects of COVID-19 would continue during 2020 and would be limited in 2021, and also the economic fluctuations would be stable in the upcoming period. It was also considered that support to participation banks in terms of public, customers, and products will continue, and economic fluctuations will remain stable in the upcoming period
Actions to be taken for the sound and sustainable development of participation banking in our country are planned under the six fundamental strategic goals. Action cards were created for each strategy with the application of project management methodologies. TKBB started its project management activities as of February 1, 2021 to achieve the fundamental strategic goals.
The Participation Banking Strategy Update Report (2021-2025) is planned to be announced to the public as of March 2021 both in Turkish and English. as the basis through effective communication with all share- holders. TKBB has been increasing its international contacts, especially since the last quarter of 2020, and maintaining the interaction activities with its global network. The ecosystem goal basically focuses on following up the foreign and domestic communications through the ecosystem relation management matrix, and various gains that will add value to the sector, increase the local and international awareness of participation banking, increase product diversity, allow participation banking to reach a wide audience, and strengthen the existing customer loyalty through all possible cooperation activities.
TKBB Uluslararası İlişkiler Yöneticisi Fatma Çınar