The growth of Islamic finance in the emerging global economy depends on the industry’s ability to innovate new financial instruments. Bank senior executives often equate innovation with technology, yet technology only plays a small part in what is truly innovative.
Banks worldwide – Islamic banks being no exception – frequently assume that implementing a new technology is the sole basis of innovation. Technology belongs in the realm of inventions, not innovation. Innovation is the application of technology to a specific problem, opportunity or circumstance. Numerous failed information technology (IT) projects stand as testament to banks’ failures to understand this fundamental difference.