This study aims at product development in Syariah banking, using the theory of Pyramid of Maslahah. Product development are important aspects of Islamic banking to realize Maqasid Al Shariah and to better serve the real economy.
To understand the needs of the customers, this study uses qualitative approaches and collects primary data from semi-structured interviews of 25 banking customers in Indonesia.
The study found that the group of respondents who have similar characteristics in age, marital status and number of kids tend to have similar financial needs. Some of the needs that have not been fulfilled by Sharia banking are the needs for investment in banking products, the needs for pension plan products and the needs for travelling-related financial products.
This study proposed that Islamic banking should provide financial products that cater to three needs of the society, including the needs for necessities/essentials (daruriyat), the needs of complementary requirements (hajiyyat) and the needs for beautifications or embellishments (tahsiniyat), to be able to better serve the real economy.
Financial needs and the life cycle approach can be used for product development in banking industry. However, this approach has not been widely used for consideration in the development of Sharia banking products in Indonesia. This study provides some novelty in Islamic banking customer behavior, especially in understanding financial needs based on the theory of Pyramid of Maslahah.
