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Wed 6 Nov 2019 02:35 PM

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Islamic banking penetration in the UAE hits new high

Islamic Banking Index by Emirates Islamic, which was first launched in 2014, shows penetration levels this year are at their highest level since its inception

Islamic banking penetration in the UAE hits new high

The Islamic Banking Index by Emirates Islamic was first launched in 2014.

Islamic banking penetration in the UAE has reached its highest level for five years, according to new research.

The Islamic Banking Index by Emirates Islamic, which was first launched in 2014, said penetration levels this year were at their highest level since its inception. 

The survey showed that three out of five respondents now have at least one Shari’a compliant product - 60 percent - up from 55 percent in 2018.

Respondents’ use of conventional banking products has rallied by two percent since 2019, but has fallen overall by five percent since 2015, it added.

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The index also showed that usage of Islamic products have grown by 13 percent in the last 5 years.

The overall perception of Islamic banks continues to improve, with the percentage of customers agreeing that Islamic banks have a range of positive attributes rising from 35 percent in 2018 to 38 percent in 2019.

According to the survey, perception of Islamic banks has improved steadily from 26 percent in 2015, with significant improvements in key areas relating to technology and customer service.

However, knowledge or awareness of Islamic banking terminology has not seen clear improvement since 2015, it added, although awareness of Islamic banking terms has risen for some products, such as Takaful.

The number of customers who say they would subscribe to an Islamic banking product in the next six months has remained consistent since 2018 – four out of five, or 80 percent.

There has, however, been a large increase in intention among non-Muslims over the last five years, from 59 percent to 76 percent.

The survey reveals the progress, penetration and perception of the Shari’a-compliant banking sector in the UAE, as well as the future intentions of the nation’s banking customers.

Top-line findings of this year’s edition indicate that the sector continues to widen its appeal to an increasing number of both Muslim and non-Muslim customers.

“The positive findings of the index against the backdrop of Expo 2020 Dubai next year – the first time the event is being held in an Islamic country – present a unique opportunity to continue the growth of Islamic finance," said Wasim Saifi, deputy CEO, consumer banking and wealth management at Emirates Islamic.

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