Dubai: Islamic banks looking to grow by attracting a greater market share of the Muslim population need to build trust amongst their core customer base by clearly communicating and demonstrating their Islamic values.

Rise of the “silver economy”

The forecast demographics of the GCC predict a huge increase in the elder population, or “silver economy” by 2050, and with it, an opportunity for Islamic banks to grow together with their customers. The challenge Islamic Banks must overcome is reversing the current trend amongst the Muslim population of using conventional banking as customers get older.

Banking on older customers

Older Muslims were most aware of Islamic banking, however, this does not necessarily translate into usage — the proportion of Muslims using a non-Islamic, or “conventional” bank rises with age. The report finds that 23 per cent of Muslims between the ages of 18-24 years old use non-Islamic products, but the use of non-Islamic products grows to a 58 per cent for Muslims between 45-64 years old.

Bricks versus clicks

Customers are spending less time in branches and are increasingly using the internet and mobile banking platforms. Internet banking is the preferred channel for both men and women, and 51 per cent of respondents said internet banking was an important factor in determining who to bank with.

What women want?

Muslim women continue to like/prefer having women only branches available, but in reality they are rarely using them, they also express a preference for online banking and they cited online and mobile banking as very important when selecting a bank. This suggests that a compelling digital offering could be a far more significant factor in attracting new female customers.

Service levels need improvement

The study finds that retail banking customers are willing to switch to Islamic banks, but will only do so if they feel that service levels match what they get from conventional banks — a fifth of non-Islamic finance customers would consider switching to Islamic banks if service levels matched those of conventional banks.