Surayyo Shaamirova and Mehmet SARAÇ
This study aims to analyze Islamic financial institutions’ (IFIs) current financial engineering and product development procedures.
Abstract
Purpose
This study aims to analyze Islamic financial institutions’ (IFIs) current financial engineering and product development procedures.
Design/methodology/approach
The paper is quantitative in nature and the survey questionnaire were collected from managers and IF experts working for Islamic Banks, Takaful and other IFIs in Turkey, Malaysia and UAE. Two-stage structural equation modeling was used to test the hypothesis.
Findings
The findings highlighted that the Shari’ah Supervisory Board, Strategy and Planning of IFIs, Legal and Regulatory framework, pricing of a new product and financial performance positively impact the new product development (NPD) process. At the same time, Islamic values have no significant positive impact.
Research limitations/implications
When generalizing the research results, data collection from the right departments was the main limitation of the current study. Future research may opt to collect data only from Product Development Departments.
Practical implications
The findings of this study will allow IFIs to reflect on their present methods, procedures and Shari’ah compliance framework for the NPD process.
Originality/value
Factors affecting the product development and financial engineering process are discussed in the literature. The findings of this study can be regarded as building blocks for future academic research on product development and financial engineering in Islamic finance.