Islamic banking going mainstream
Islamic banking is growing at more than twice the rate of conventional banking in the UAE, and the sector is on track to achieve $263 billion of Sharia-compliant assets by 2019, according to the World Islamic Banking Competitiveness (WIBC) report released by the accounting and auditing firm EY at the weekend. In 2014, Sharia compliant assets in the UAE passed $1 billion while the industry itself was estimated to be worth $127 billion making the nation the third largest Islamic banking market by value after the Saudi Arabian and Malaysian markets.
"Islamic banks in the UAE, also known as participation banks, are eyeing revenue growth through experience-led transformation of their domestic business. Looking at the positive performance of Islamic banks in the UAE, the country is expected to be one of the main markets that drive the future internationalisation of the Islamic banking industry," said Ashar Nazim, Global Islamic Finance Leader at EY.
The study also assessed customer satisfaction with the UAE’s Islamic banks by monitoring social media feeds. Islamic lenders scored positively among their clients for their customer service. But customers showed dissatisfaction with products offered by Sharia-compliant banks in the country. “The call to action for Islamic banks in the UAE is to build rich insights into customers’ delight and pain points, and break operational silos,” said Nazim. “The time is right for analytics; banks need to challenge their channel capabilities and push for more customised products and services.