Dubai
There has been an increasing public acceptance, awareness and demand for Islamic banking in the UAE, according to the findings of Emirates Islamic’s second Islamic Banking Index.
“This year’s survey brings much good news to the industry, providing clear evidence that the strength and scope of Islamic Banking in the UAE is on the rise. 51% of banking consumers have at least one Islamic product, demonstrating that the efforts by Islamic banks to improve their customer outreach are paying off,” Jamal Bin Ghalaita, chief executive officer of Emirates Islamic said in a statement.
The index provides an annual benchmark of shifts in the ‘penetration’, ‘perception’, ‘knowledge’ and ‘intention’ of UAE consumers when it comes to Sharia compliant banking,
The survey found out that 51 per cent of the UAE banking consumers have at least one Islamic banking product, marking a 4 percentage points increase over last year’s score. While 36 per cent of the banking consumers have an Islamic product from an Islamic bank, up from 34 per cent in 2015.
About 62 per cent of banking consumers in the emirates are aware of at least one Sharia-compliant banking product, a rise on the previous year’s findings. The study also revealed that for a second year, the best-known products remain Takaful and Murabahah, with 40 per cent and 31 per cent of respondents familiar with their use.
As far as perception issue is concerned, Islamic banks’ trustworthiness rose 42 per cent among Muslim consumers compared to 37 per cent in 2015. The perception of conventional banks as being technologically advanced rose among Muslims to 41 per cent in 2016 compared to 33 per cent in 2015. Among the non-Muslim population, there was a sizable increase in the number of non-Muslim consumers willing to consider subscribing to an Islamic banking product.
“The survey results are extremely encouraging, as Islamic banking’s appeal is growing among both Muslim and non-Muslim consumers, demonstrating the potential opportunity that will drive the industry’s future growth in the country. Another key finding is that more than half of the consumers will consider Islamic banks, only if the benefits are comparable to or better than conventional banks,” Bin Ghalaita added.
“The survey also highlights the key challenges for Islamic banks. For a second consecutive year, Islamic banks lag behind conventional banks in technology, innovation and customer service,” he added.
Meanwhile, Emirates Islamic has already made strides in catering to the millennial mindset by offering banking services via Twitter, a first among Islamic banks in the UAE.
