Business Process Improvement of Funding: A Proposition to Increase the Performance of Indonesian Islamic Banking

Authors

  • Aslam Mei Nur Widigdo Bogor Agricultural University
  • Marimin - Bogor Agricultural University
  • Idqan Fahmi Bogor Agricultural University
  • Irfan Syauqi Beik Bogor Agricultural University

Abstract

The aims of this research paper are to analyze the problems related to some aspects of the Indonesia Islamic Banking such as the implementation of Shari’ah principles and its value chain on the Funding of Islamic Banking, and to formulate an improvement proposal to improve the business process of third party mobilization in order to increase the performance of Islamic Banking in Indonesia. This is a combined qualitative and quantitative research. Value Stream Mapping, Business Process Re-engineering (BPR) and Analytic Network Process were used in a qualitative approach. Likert scale questionnaire was used in a quantitative approach. The results of this research involve a proposition to change the business process of funding, which was actually an outcome of business process reengineering with enablers of information technology development and adjustment of policies related with the enhancement of Islamic principles implementation and business strategy formulation. Design of BPR was able to reduce the waiting time (queue) as a waste or non value added sub process (NVA) and re-layout several necessary but non value-added sub process (NNVA). The business process changes will be effective with the two groups of enabler. The first enabler is information technology development, such as online regristation, and instalation of self service banking machine (SSBM) and/or Cash Deposit Machine (CDM). The second enabler is the policies adjustment that included the recommendations to increase Shari’ah values implementation, as well as the adjustment of strategies combined with a sequential priority of resources empowerment, product development, institutional strengthening, and increase in marketing.

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Author Biographies

Marimin -, Bogor Agricultural University

Professor of Industrial System Engineering, Faculty of Agricultural Technology

Idqan Fahmi, Bogor Agricultural University

Senior Lecturer of Economic and Management Faculty

Deputy Director for Resources, Business School of Bogor Agricultural University

Irfan Syauqi Beik, Bogor Agricultural University

Senior Lecturer of Economic and Management Faculty

Director - Center of Islamic Business and Economic Studies (CIBEST), Bogor Agricultural University

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Published

2016-11-07

How to Cite

Widigdo, A. M. N., -, M., Fahmi, I., & Beik, I. S. (2016). Business Process Improvement of Funding: A Proposition to Increase the Performance of Indonesian Islamic Banking. Journal of Islamic Finance, 5(2), 066–079. Retrieved from https://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/130

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