Product and Service Diversity of Participation Banks

There are 6 participation banks operating in Türkiye, 3 being private participation and 3 being public participation banks. We cannot tell that there is no deficiency in the participation finance system with regard to the traditional banking services offered to the citizens in terms of product diversity. Based on financing and investment products, we can easily state that the real sector is supported and that the participation banks compete with conventional banks in terms of product diversity.

What About Digitalization?

Digitalization has caused all banks to also invest and gain significant insight in this area. It is a given that participation banks have developed in recent years in terms of technological product diversity, yet still, certain deficiencies can be observed in terms of competition. Having started to be also offered by fintech companies, these types of services such as remote customer acquisition, virtual POS solutions, card campaigns, wallet applications, financing alternatives, interest-free financing (e.g., mutuum, etc.) instruments, BAAS (Banking as a service) solutions, loyalty services can become widespread and develop.

Critical Products and Services for the Participation Finance System

Becoming aware that products and services such as sukuk, mutuum, musharakah, and mudarabah, which will make the participation finance system attractive, are also being offered in certain projects, will lead the sector to get a higher share of the total banking market. As Islamic methods increase, these alternatives that benefit people will become an opportunity and it will possible for people sensitive to interest to get integrated into the participation finance system where they can use completely interest-free instruments instead of interest-based banks and receive integrated services. In this direction, Islamic finance courses and new financing models are taught in some universities on the development of Islamic methods. With this awareness, new graduates can be provided with the opportunity to gain insights into developing Islamic methods.

Expectation and Approach

Witnessing developments such as capital investments and digital transformation, it is expected that the participation finance system will make people talk about itself in the upcoming years. I believe that it should be a duty for us to follow the developments closely and to ensure that they are encouraged when necessary. The fact that all stakeholders in the participation finance system act with this sensitivity will lead to faster results in the short term and support a positive increase in the market share in the sector.

Salih ERBAŞ