Islamic banking is becoming increasingly popular. At Al Rayan Bank is the UK’s largest Islamic bank. They are currently estimating that, more than a third of their customers are not Muslim. One of the main reasons for this is linked to consumers’ desires to live more ethical lifestyles. Research shows that three quarters of all British adults believe that living a more ethical lifestyle than they currently do is important.
The focus on ESG (Sustainability and Environmental, Social and Governance) has grown in prominence and importance for almost all large-scale companies in the UK. This pandemic has also had a part to play by increasing awareness of climate issues and risks amongst consumers. Banking is no exception to this scrutiny. 66% of British adults says that it is important for companies, to provide them with financial services. Hence, many are demanding greater transparency from their banks.
Islamic banks hold Sharia compliant values at their core. The transparent nature of Islamic finance also means customers trust the bank to invest their money and share the profits that are generated. Islamic banking becomes more mainstream. It has adapted to meet the needs of its customers. Their Digital Banking app was launched in 2019. Now it has over 30,000 users. Islamic finance has also garnered support from the Bank of England. Al Rayan Bank has worked closely with the Bank of England over many years. The introduction of a new Sharia compliant non-interest-based deposit facility, by BoE, in which deposits from Islamic banks will be backed by a return-generating fund of high quality Shariah compliant assets. Through adapting digitally and demonstrating a clear, transparent product offering, Islamic banks have a very real opportunity to reach Muslim and non-Muslim audiences alike.