Today, it’s almost impossible to imagine a bank that works without technology.
But we can all openly admit that it’s only over the past year that we’ve all truly felt and understood the importance of meaningful adoption of financial technology and digital adoption.
And this recognition is particularly significant for the Islamic banking sector as COVID-19 has brought with it increasing appreciation and interest in the economic and social merit of our industry’s strong moral and ethical foundations.
In fact, even as the crisis affected both conventional and Islamic finance markets, Islamic banking surpassed conventional banking perception in the UAE in 2020, according to the 2020 edition of the Islamic Banking Index by Emirates Islamic. Islamic banking continued to outperform conventional banks on being trustworthy, supporting the community, having lower fees and offering better finance and profit rates on savings.
Despite Islamic banking being a fast-growing sector, conventional banking was ranked on perception related to innovation, technology, and mobile and online banking – and this is where tremendous progress can take root.
We have a unique opportunity to accelerate the transformation the world’s oldest and most relevant banking system.
Technology adoption
Given the rapid changes in consumer behaviour triggered by the pandemic, in which Islamic banking digital services have seen growth, the sector now has a chance to further differentiate themselves not just in terms of the incredible potential of Sharia-compliant offerings but also through the development of Islamic fintech innovations.
Our industry’s ethical values, based on responsibility, accountability, equity, good faith and sustainable development, can find far greater reach and adoption in digital ways that we have not yet fully explored.
Signalling the potential of the decisive shift, at Emirates Islamic, we’ve already seen a marked increase in the usage of our digital banking channels last year with over 70% of customers now banking through online and mobile banking channels as we rolled out several new services to support the community during the pandemic.
As Islamic financial institutions with a legacy of being community-minded, now more than ever, we have a duty to innovate and find ways to offer solutions that can help strengthen financial wellbeing, stability and security, especially for the financially vulnerable whose lives have been impacted by the outbreak.
In addition to offering seamless, instant access, digital technology has played a larger role in helping reassure consumers on the safety of their finances.
Going forward, banks that recognise and cater to these fundamental needs will not only be able to retain consumer trust, but also potentially shape the trends of tomorrow. The real test for banks going forward, including Emirates Islamic, is to listen, learn and create deeper trust among consumers as they digitally transform – whether proactively or reactively.
