Scope: Converting a conventional financial institution (CFI) to an Islamic financial institution (IFI) entails restructuring products, operations, and often corporate governance.

Process: The process usually begins with a thorough audit of the institution's current practices. Next, each product is restructured to remove any interest-based (riba) components. Training is conducted for employees to familiarize them with Islamic finance principles and customer interactions.

Challenges: Regulatory barriers, cost of restructuring, and customer adaptation can be challenging. Some products, like traditional mortgages, have to be replaced with structures such as Ijara (leasing) or diminishing Musharakah (partnership).

Examples: Banks in countries like Malaysia, Pakistan, and the UAE have successfully transitioned to Shariah-compliant models by introducing Islamic savings accounts, profit-sharing investment products, and ethical lending solutions.