Challenges of Islamic Banking in Indonesia in Developing Products

The purpose of this research is to explain what are the challenges that have been faced and will be faced by Islamic banking in Indonesia to produce Islamic banking products to compete with conventional banking. Islamic banking product innovation that must be carried out by the Islamic banking industry is following the policy directions that have taken determined by Bank Indonesia. In conducting product innovation, the Islamic banking industry must be smart to take advantage of opportunities technological development by providing ICT-based products, so that more people are interested. Product innovations took out Islamic banking should pay regard to the economic and social dimensions from the financial aspect, banking product innovation Sharia which carried out for product development must be in an industry with the requirements of the customers, only by still complying with sharia rules (shariah compliance). Thus, product innovation can give birth to a variety of bank products. As the Islamic banking industry based on Islamic values, Islamic banking has a strategic role from the social aspect, namely by conducting education to the public, through product innovations that can characterize people's behaviour. From the results of research accompanied by researchers, several challenges can prevent the development of Islamic banking products in Indonesia, such as limited funds from Islamic banks and the lack of full support from the Indonesian government.