Islamic banking products are becoming as popular as conventional products in the UAE, with 60 percent of those surveyed saying they are using an Islamic banking product, compared with 61 percent who said they are using a conventional product.
The new Islamic Banking Index by Emirates Islamic for 2021 also showed that nearly half of those surveyed (48 percent) are more likely to prefer Islamic banking products since the COVID-19 pandemic, up three percent from 2020.
While Islamic banking has grown in popularity, up from 47 percent when Emirates Islamic first started the survey in 2015, conventional banking products have decreased in popularity, falling from 70 percent in 2015.
Wasim Saifi, deputy CEO, consumer banking and wealth management at Emirates Islamic, said the change was testament to the growing relevance of Islamic banking.
“For the first time since we launched the Index in 2015, we see a closing of the gap between the adoption of Islamic and conventional banking products – it is clear that consumers are increasingly choosing Shariah compliant solutions when it comes to financing and saving,” he said.
“This bodes well for Islamic banks as they continue to be considered more financially sound, trustworthy and supportive of their communities than conventional banks, which are all factors that will inspire long-term loyalty in customers and clients.”
The research also found that customers overall are increasingly using digital banking products for all their requirements, up by 70 percent in 2021 from 65 percent in 2020.
However, the Index showed Islamic banks are still behind conventional banks in terms of the public’s perception of their use of technology, such as app-based services, with 45 percent believing conventional banks are technologically advanced compared with 39 percent for Islamic banks.
Farid Al Mulla, deputy head of consumer banking and wealth management at Emirates Islamic, noted that as the shift to digital banking continues to grow, the shift to online and mobile banking is permanent.
“It is clear that this is an area that needs to be strengthened much more if Islamic banking wants to outpace conventional banking’s growth and grow beyond borders.
Customer experience is another area that needs to be prioritised to expand Islamic banking’s base and truly close the adoption gap.”
(Reporting by Imogen Lillywhite; editing by Brinda Darasha)
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© ZAWYA 2021