Promotion of Islamic Financial Products by Digital Media in Kingdom of Bahrain

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Introduction

Islamic financial products have become common all over the world. The media has been significantly influential in promoting these Islamic financial products. Some of these products include Musharakah which refers to a joint venture, Mudharabah which is profit sharing, Ijar (leasing), and Hawala, which is an international fund transfer system (El-tahir 2015; Pielichata 2015). This research proposal suggests a study to understand how digital media has promoted Islamic financial products in the Kingdom of Bahrain.

Research Questions

The following research questions will guide the suggested study.

Is the promotion of Islamic financial products by digital media a negative interpretation of Islamic finance and banking as defined by Islamic teachings and Sharia Law in the Kingdom of Bahrain?
Has e-marketing negatively affected the use of Islamic banking and finance in the Kingdom of Bahrain?

Aims and Objectives

The main aim of the study is to determine whether Muslim faithful in the Kingdom of Bahrain believes that the promotion of Islamic products through e-marketing suggests a negative interpretation of the concept of finance according to Islamic teachings and Sharia Law.

The objective of the research proposal is to investigate the opinions of Muslims in the Kingdom of Bahrain whether e-marketing of Islamic financial products and services goes against Islamic teachings, and whether this affects their use of the same products and services.

Significance of the Research

The research study proposed is significant for various reasons. One such reason is the fact that e-marketing has been very influential in the understanding of Islamic finance banking systems. More states that use Sharia Law are opening up to the use of digital media in attracting businesses to their banking system. However, there has been criticism on the impact of digital marketing and its interpretation through both the Islamic teachings and Sharia Law. The arguments are based on whether the religion allows for the marketing of these said products, and how this then translates to the uptake of the services among the Muslims.

Literature Review

The Kingdom of Bahrain is guided by Sharia Law. The majority of the population is Muslim and adheres to Islamic teachings and the said Sharia Law. Indeed, finance is a big part of Islams teachings. In fact, Naim et al. (2016) explain that the concepts found in Islamic finance have allowed it to grow even during world financial crises. There are many critics that believe that the Islamic finance model is actually better than the conventional one (Hasan 2018; Uddin 2018; Lai, Rethel & Steiner 2017; Rudnyckyj 2017). Indeed, there are many differences between Islamic and conventional finance. For example, Islamic banking does not charge interest as compared to conventional banking (Modan & Hassan 2018; Gundogdu 2018; Varol 2018; Shaikh 2017; Ayachi, Saidane & Mansouri 2017; Aidrus 2014). Despite this, it is common to find conventional banks in Islamic states (Bambore & Singla 2017; Bansal, Smith & Vaara 2018). This has mainly been due to the presence of non-Muslims in such areas.

Additionally, in this day and age, it has also become common to find non-Muslims seeking alternatives offered through Islamic banking (Simmonds 2014; Shahzad et al. 2014; Digital Islamic economy 2015). In an attempt to attract as many clients as possible, companies and banks that offer Islamic banking services have taken up digital marketing. Many digital marketing strategies have been employed in the promotion of Islamic finance products in the Kingdom of Bahrain (Holland 2017; StanChart offers Islamic trade finance in Bahrain 2014; Bahrain: CBB outlines Islamic finance strategy 2013; Kotilaine 2016; Bank ABC Islamic performs in tough conditions 2016; Bahrain is back 2013; Bankers congregate in Bahrain 2015). There are some scholars that have argued that direct advertising normally involves over-exaggeration of the benefits of a product (Tahir 2015; SBP to launch media campaign 2013; Yousaf 2016; Parrag 2012). On the same note, like Kumar, Trehan, and Joorel (2018) note, the same advertisements and promotions also downplay the shortcomings of the same products. In Islamic teachings, this can be considered haram.

Methodology

Research Philosophy

The research philosophy revolves around how the researcher gathered and analyzed information. The researcher will adopt the positivism research philosophy. Bambore and Singla (2017) explain that positivism entails the use of existing theories and premises to test the hypotheses and aims of a research study.

Research Design

The researcher will employ a qualitative and exploratory research design. The main reason for this is the fact that the study seeks to determine the beliefs and opinions of the target population on the stated topic. Bansal, Smith, and Vaara (2018) confirm that a qualitative research design is best suited for studies that gather and analyze current opinions and beliefs.

Target Population

The target population is very large as it includes all the people that use Islamic banking services. The target population is assumed to have interacted with advertisements on any digital platform of Islamic financial products.

Sample Design

The researcher will use a stratified random sampling design to identify the right sample. This type of sampling design allows the researcher to divide the target population into several groups that represent the different categories of people in the target population (Kumar, Trehan & Joorel 2018).

Data Collection Techniques

The study will employ the use of both primary and secondary data collection techniques. A questionnaire will be developed to collect the primary data.

Data Analysis Methods

The study will use both quantitative and qualitative data analysis methods.

Reference List

Aidrus, IA 2014, Islamic finance development: a role of the Kingdom of Bahrain, Finance & Credit, no. 47, pp. 3947.

Ayachi, RA, Saidane, D & Mansouri, F 2017, Potential of Islamic finance: a survey of Tunisian Northwest companies, Journal of Emerging Economies & Islamic Research, vol. 5, no. 2, pp. 2842.

Bahrain: CBB outlines Islamic finance strategy 2013, MiddleEast Insurance Review, p. 23.

Bahrain is back 2013, Islamic Business & Finance, no. 77, pp. 1216.

Bambore, PL & Singla, V 2017, Factors affecting e-banking adoption and its impact on customer satisfaction: a case study of Ethiopian Banks, International Journal of Marketing & Business Communication, vol. 6, no. 1, pp. 1628.

Bank ABC Islamic performs in tough conditions 2016, Islamic Business & Finance, no. 95, pp. 2426.

Bankers congregate in Bahrain 2015, Islamic Business & Finance, no. 89, p. 19.

Bansal, P (Tima), Smith, WK & Vaara, E 2018, New ways of seeing through qualitative research, Academy of Management Journal, vol. 61, no. 4, pp. 11891195.

Digital Islamic economy growing significantly: report 2015, CFO Innovation Asia, p. 2.

El-Tahir, H 2015, Bahrain: Leading takaful, MiddleEast Insurance Review, pp. 5659.

Gundogdu, AS 2018, The rise of Islamic finance: 2-step Murabaha, Asia-Pacific Management Accounting Journal, vol. 13, no. 1, pp. 120.

Hasan, Z 2018, Academic sociology: the alarming rise in predatory publishing and its consequences for Islamic economics and finance, Journal of Islamic Banking & Finance, vol. 35, no. 3, pp. 1125.

Holland, G 2017, Bahrain to host inaugural Islamic Finance Innovation Day next month, Reseller Middle East, p. 1.

Kotilaine, J 2016, Bahrains evolution as a financial centre, Banker Middle East, no. 184, pp. 2832.

Kumar, S, Trehan, M & Joorel, JPS 2018, A simulation study: estimation of population mean using two auxiliary variables in stratified random sampling, Journal of Statistical Computation & Simulation, vol. 88, no. 18, pp. 36943707.

Lai, J, Rethel, L & Steiner, K 2017, Conceptualizing dynamic challenges to global financial diffusion: Islamic finance and the grafting of sukuk, Review of International Political Economy, vol. 24, no. 6, pp. 958979.

Modan, C & Hassan, R 2018, The possible inclusion of legal provisions in Islamic banking and finance, International Journal of Law & Management, vol. 60, no. 2, pp. 662680.

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Parrag, DAR 2012, The role of Shariah in shaping Egyptian consumers behavior towards sales promotion tools, African Journal of Business & Economic Research, vol. 7, no. 1, pp. 6484.

Pielichata, P 2015, Bahrain could provide access to Saudi Arabia, Global Investor, p. 24.

Rudnyckyj, D 2017, Subjects of debt: financial subjectification and collaborative risk in Malaysian Islamic finance, American Anthropologist, vol. 119, no. 2, pp. 269283.

SBP to launch media campaign for promotion of Islamic banking 2013, Journal of Islamic Banking & Finance, vol. 30, no. 2, p. 110.

Shaikh, SA 2017, Analysis of minor proposals outside the mainstream Islamic finance in Pakistan, Journal of Islamic Banking & Finance, vol. 34, no. 3, pp. 1121.

Shahzad, F, Zia, A, Ahmed, N, Fareed, Z & Zulfiqar, B 2014, Growth of Islamic banking in Middle East and South Asian countries, International Journal of Management, Accounting & Economics, vol. 1, no. 3, pp. 215228.

Simmonds, R 2014, A move towards the digital age for Islamic banking, Islamic Finance News Supplements, pp. 1012.

StanChart offers Islamic trade finance in Bahrain 2014, Trade Finance, vol. 17, no. 1, p. 67.

Tahir, DHE 2015, Fresh evidence of growth and optimistic outlook despite market challenges, Islamic Finance News Supplements, pp. 6768.

Uddin, MA 2018, Can Shariah governance framework be the way forward for Islamic finance?, Journal of Islamic Banking & Finance, vol. 35, no. 3, pp. 5563.

Varol, F 2018, From developmentalism to neoliberalism the changing role of the state and the development of Islamic business and finance in Turkey, Turkish Journal of Islamic Economics, vol. 5, no. 1, pp. 118.

Yousaf, S 2016, Promotion mix management: a consumer focused Islamic perspective, Journal of Marketing Communications, vol. 22, no. 2, pp. 215231.

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