Abstract:

Innovation, defined as profitable innovation, produces different products than its competitors, increases the competitiveness of and provides significant advantages in the competitive process. Innovation in the manufacturing sector has seen a rapid increase in importance in the service sector in recent years. The increased share of the banking sector in the service sector is effective in banking increases in the service sector. Therefore, the importance of innovation in banking is quite high in diversifying financial instruments and increasing efficiency. In the banking sector, the level of financial success has increased with the beginning of the innovation process. In the studies on banking activities, it is stated that the share of participating banking in the world banking sector increases every day. Participation banking, also expressed as Islamic finance, develops new financial instruments in the world banking sector, in accordance with Islamic rules, to be able to compete. The participating banks that offer interest-free banking services to their customers are shown to develop innovative products and provide services to their customers in order to provide better quality services. From this point to this point, the first part of the work explains the historic development from the moment when participating banks were established to the present day. Participation banking, the place and importance of the banking sector is examined by the financial dimension. Innovation processes in participating banks are revealed. By studying the impact of banks’ innovation transactions on banks’ financial revenues and expenses, it is believed that banks’ revenue increases and that innovative transactions can be effective on the profitability of the bank. It is recommended to develop new models for the implementation of innovative transactions that increase profitability.

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