Digital Transformation in Participation Banking

Participation banking was established as an alternative to the traditional banking system. Funds collected from savers in participation banks are offered to people who request funds through various methods such as partnership and trade with the principle of interest-free. The banking sector is one of the dynamic and rapidly adapting sectors. With the effect of digitalization in the banking sector, which adapts effectively to the developing and changing technology, customers can receive service with internet support without interruption and without going to the branches. The digitalization of participation banking products and services and the use of new-generation technologies in banking products and services help improve customer experiences and provide customers with more accessible services. Participation banks in the banking sector need to ensure sustainable development by adapting to digital transformation in banking transactions to gain an advantage in the competitive environment and increase their market share in the sector. This study aims to reveal the digital view of traditional banking and participation banking in Turkey and to examine the development of the digitalization process over the years. Digital banking data were analyzed by content analysis. According to the results of the research, an increase has been observed in the number of active customers, total transaction volume, and remote customer acquisition over the years. Over the years, it has been observed that participation bank customers have turned to digital channels more in their service transitions, the participation bank sector has continuously improved their customer experience, and they have a more accessible service approach through various channels. The use of technological innovations and digitalization in financial products and services is important for the participation banking sector. In a world where digitalization is increasing day by day, it is considered that the effective use of digital elements in the products and services provided by the participation banking sector, which aims to have a market share of 15% in the banking market in 2025, will make significant contributions to the sectoral growth. In addition, it is considered that the provision of digital-based services and products for the expectations of today's young individuals, who will be directly involved in the economy in the next ten years, will have a positive impact on the market share of participation banks.