Majority of non-Muslim UK consumers believe that Islamic finance is relevant to all faiths

As celebrations for its 10 year anniversary begin, Islamic Bank of Britain plc, the UK’s only wholly Sharia compliant retail bank, has revealed findings from the first national survey to look into British consumers’ understanding of, and attitudes towards, Islamic finance.  The research provides insight into how British consumers, both Muslim and non-Muslim, are using Islamic finance products currently, and their inclination to use them in the future.

The survey was conducted by independent research company, 2Europe, on behalf of Islamic Bank of Britain, in August 2013 through telephone interviews. 300 British Muslim and non-Muslim consumers across the UK were questioned:  a third of all respondents (i.e. 100) were non-Muslim and a third of all respondents were a combination of Muslim and non-Muslim customers of IBB.

The findings are revealed as IBB also celebrates offering market-leading savings profit rates to UK consumers for over a year.  Since December 2012, at least one of IBB’s savings accounts has been consistently amongst the top three in the UK, often top of the table. The Bank estimates that for the period 1st December 2012 – 1st December 2013, 87% of applications for its Fixed Term Deposit Accounts were from non-Muslim customers. 

This high level of support for Islamic finance amongst both Muslim and non-Muslim consumers is reflected in the survey findings, which reveal that:

• 66% of those surveyed felt that Sharia finance is appropriate in a modern western society, such as the UK
• 65% understood that the way Islamic banking works is different to the way conventional banking works
• 60% agreed that Sharia finance is relevant to all faiths (N.B. within this figure there was no significant difference in attitudes by individuals of different faiths with the majority of non-Muslims surveyed – 57% – agreeing that Islamic finance is relevant to UK consumers of all faiths)
• 57% knew that Sharia finance is a system in which the Islamic banks pay profits rather than interest on savings products, and charges rent not interest on their home finance products
• 58% considered Islamic finance to be an ethical system of finance and one which considers the impact of its activities on society
• 53% understood that Sharia finance is based on ethical principles that are derived from trade, entrepreneurship and risk-sharing
• 81% of IBB’s customers are likely to use Sharia compliant finance again; the results being the same for Muslim and non-Muslim customers
• A specific focus on the 200 Muslim customers and prospective customers surveyed showed that:
• 36% of Muslims currently use Sharia compliant finance, of which 9% use it exclusively
• A further 45% of Muslims, who don’t currently use Sharia compliant finance, are very likely to consider doing so in the future

The survey shows that there is strong potential for further growth of Islamic finance within the Muslim market and IBB estimates that there are about a million UK Muslims adults with a need for its savings and home finance products, who are also inclined towards Sharia compliant finance. With approximately 50,000 current customers, the Bank feels there is plenty of capacity for growth amongst this core segment.

Non-Muslims are equally as loyal to IBB and Sharia finance once they have become customers and this suggests even broader growth potential for the bank across the general UK banking market.

Commenting on the findings, Sultan Choudhury, managing director of Islamic Bank of Britain says, “IBB has long been considered the pioneer of Sharia compliant retail banking.  It’s therefore fitting for the Bank to mark its 10 year anniversary by revealing findings from the UK’s first survey into British consumers’ attitudes of Islamic finance.  The Bank has broken new ground by conducting this research, which will shape how the retail market for Islamic finance evolves.  The insights also come at a time when the UK Islamic finance sector as a whole is set to embark on several important developments, including the launch of a Sovereign Sukuk, due later this year.”

IBB’s research findings are revealed as the British government begins to implement plans for the UK Islamic finance industry.  Announced by David Cameron, Prime Minister, at the World Islamic Economic Forum (WIEF) on 29 October 2013, these include a Sovereign Sukuk, Islamic Indices on the stock market and support for Muslim students and entrepreneurs in the UK. 

Islamic finance offers consumers a different approach to banking, which IBB has dubbed ‘Banking you can believe in’. It operates entirely without the main instruments of the conventional finance sector, including interest and speculative products. The whole premise of Islamic finance is to provide a way for society to conduct its finances in a fair, ethical and socially responsible manner.

IBB was formed in 2004 based on this approach and to date has attracted over 50,000 customers.  IBB has been recognised as an ethical alternative to conventional banks by the Move Your Money campaign and Ethical Consumer magazine, which has rated it amongst the top ten providers of ethical current accounts http://www.ethicalconsumer.org/buyersguides/money/bankingcurrentaccount…