A report by cloud banking platform Mambu has found more than half of young Muslims would adopt Islamic banking if it was more accessible.
The report – titled Faith and Finance: The changing face of Islamic banking – surveyed 2,000 Millennial and Gen Z consumers worldwide and found 53% of young Muslims would choose Islamic banking if barriers to entry were removed.
According to Mambu, this finding illustrates the growing appeal of Islamic finance services globally and reflects a wider demand for ‘ethical banking services’ in the wake of Covid-19.
The research found that 74% of young Muslims want banks to make investments that align with their religious beliefs and 75% want them to make investments that ‘do good in the world’.
In addition, 62% were against bank lending to tobacco firms and 69% would rather their banks not lend to gambling companies.
The report also found that 76% of young Muslims believe the availability of online banking operations is a ‘dealbreaker’. Up to 70% of respondents said it is important to be able to make an investment without having to see someone in person, 74% believe it’s important they can access their bank’s services through a mobile app and 80% said it is important they can access banking services anywhere and at any time.
Mambu highlighted that the Islamic finance market is growing rapidly, with the total assets in the sector exceeding $2trn in recent years, with the market expected to grow to $3.8trn by 2023. By 2025, the market is expected to have a total valuation of $125bn. However, the lack of digital services is hampering uptake in the sector.
Mambu remarked that the Islamic finance industry is built on a promise that products and services comply with Shariah law, with the market founded on a set of ‘moral and ethical principles’ that promote the public good.
The UK currently has the most Islamic FinTechs – with a total of 27 – following by 19 in Malaysia and 15 in the United Arab Emirates.
Mambu CCO Elliot Limb said, “Younger consumers are demanding financial change, and the Islamic finance market is no exception. Our research illustrates how Islamic banking trends mirror the demand we’re seeing for ethical banking practices more broadly.
“With 1.9 billion Muslims underserved globally, it’s clear that there’s a huge opportunity for both Islamic and conventional banks, alike, to provide compliant solutions for the modern consumer.â€
Mambu MENA general manager Miljan Stamenkovic added, “This is a generation that’s technologically savvy and more globally mobile than the generations before them. They want banking services that align with their lifestyle and values, without compromising on flexibility or ease of use.â€
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