Product Development Innovation Process for Islamic Financial Institutions in Malaysia: A Conceptual Framework with Ethical Values for Community Benefits

Abstract

Islamic Financial Institutions (IFIs) are developed based on the system manifested from Islamic teachings and Shariah. At the same time, since its emergence in 1983 (which refers to the Islamic banking system), IFIs’ governance, products, services, policy, and internal processes are continuously facing various challenges. These two (2) dimensions move in parallel and would trigger some ethical issues which may disrepute the reputation of IFIs. This paper analyses all the key elements related to IFI’s principles and operational matter that differentiates it from conventional financial institutions. As a recommendation, this paper comes out with the conceptual framework based on ethical values for IFI’s possible adoption in financial product development’s innovation and its further effect towards community benefits.