UAE consumer uptake and perception of Islamic banking products and services has risen for the third consecutive year, according to the 2017 Islamic Banking Index by Emirates Islamic.
The results of the 2017 survey show that over half (52 per cent) the population of the UAE currently have an Islamic banking product, an increase of five percentage points on the inaugural 2015 survey.
Significantly, there has been a seven point increase in the adoption of Islamic products by non-Muslim bank customers, demonstrating Islamic banking’s broad appeal and value proposition.
The research has also shown a steady increase in the average UAE consumer perception of Islamic banking products and services, also rising by five points from 2015. The research revealed a distinct closing of the gap in how Islamic Banks are perceived in relation to conventional banks – particularly when it comes to being technologically advanced and innovative, and offering superior customer service.
Jamal Bin Ghalaita, CEO of Emirates Islamic, said: “The results of this year’s Islamic Banking Index clearly show that more people in the UAE are recognising the positive attributes of Islamic banking, leading to a wider adoption of Shari’a-compliant products and services.
“This is a welcome trend that bodes well for the future of the Islamic banking sector and supports the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai to make Dubai the global capital of Islamic economy.”
Launched in 2015, The Islamic Banking Index by Emirates Islamic is a first-of-its-kind consumer survey that measures the progress of the Islamic banking sector in the UAE by tracking consumer behaviour and sentiment towards Shari’a-compliant banking products and services.
The Index benchmarks against four indicators: ‘penetration – customers who have an Islamic banking product; perception – the average rating of Islamic banks on a range of attributes; knowledge – consumers’ understanding of Islamic banking terms; and intention – how likely consumers are to subscribe to an Islamic banking product.
• More than half of UAE consumers - 52 per cent - have at least one Islamic banking product –5percentage points higher since the first survey in 2015
• Non-Muslims are increasingly using Sharia-compliant cards with an increase of 7 points from 2015
• The perception of Islamic banks versus conventional banks has begun to shift, with Islamic banks closing the gap on conventional banks on key areas including innovation, speed of service and ease of using procedures
• Islamic banks are consistently (over three years) perceived to be more trustworthy, more community minded and more financially sound than conventional banks
• 29 per cent of non-Muslim consumers believe Islamic banks offer the best profit rates on deposits, while 24 per cent believe that to be true of conventional banks
• Knowledge of Islamic banking continues to grow with 65 per cent of consumers familiar with at least one Islamic banking product – an increase of 6 points on 2015
• Knowledge of Shari’a-compliant products is increasing faster among non-Muslims - up 13 percentage points on 2015
• Consumers are equally as likely to apply for an Islamic finance product in the next six months as they are a conventional product with overall intention up for both categories
Wasim Saifi, deputy CEO-Consumer Banking and Wealth Management at Emirates Islamic said: “This year’s Islamic banking Index has highlighted the opportunity for continued growth and increased share of the market for Islamic banking in the UAE.”
“This is particularly encouraging when looking at the increase in uptake of Islamic banking products and services by non-Muslim customers. There is also untapped potential when it comes to Muslim customers who have traditionally perceived conventional banks to be more innovative and technologically advanced.
“The gap is closing here too. Digital innovation is an area that Emirates Islamic will continue to focus on, in order to provide best-in-class banking products and services and a truly superior customer experience. Moving forward, we will continue to play our pioneering role in the Islamic banking sector, helping further increase the adoption of Islamic banking products in the UAE,” he concluded.