Dubai’s Emirates Islamic Bank survey revealed that Islamic banking’s penetration levels have risen in 2019 with the progress of Shariah-compliant banking system.
“Today, when we look to the local market, you really see the Islamic banks have integrated so well,” Wasim Saifi, Deputy CEO-Consumer Banking and Wealth Management at Emirates Islamic Bank told the media.
The 2019 edition of the Islamic Banking Index showed that penetration score of the sector rose to 60 percent in 2019, from 55 percent in 2018. The penetration score is the percentage of consumers who have one or more Islamic products from a financial provider.
The penetration score for Islamic banking products amongst Muslims rose to 70 percent in 2019, from 65 percent in 2018. For non-Muslims, the score rose to 45 percent in 2019, up from 40 percent in 2018.
Other than the penetration score, three more indicators are used in the survey – perception score, knowledge score and intention score.
The perception score gained 3 percentage points in 2019, increasing to 38 percent. This indicator measures the average rating of Islamic banks on a range of attributes.
Muslims perceive Islamic banks to be much stronger in several attributes compared to conventional banks, Saifi said. “Even when it comes to technology and innovation, Muslims still rank Islamic banks similar to conventional banks,” he added.
The knowledge score, or the awareness of the Islamic banking terminology (Murabahah, Mudarabah, Takaful…), dropped to 37 percent in 2019, down from 39 percent in 2018.
Amongst Muslims, the knowledge score dropped to 39 percent in 2019, from 45 percent in 2018. Amongst non-Muslims, the score rose to 30 percent in 2019, from 24 percent in 2018.
The final indicator – intention score – steadied at 80 percent in 2019 over 2018. It reflects the percentage of respondents who indicated they would subscribe to an Islamic banking product within six months.
Amongst the factors influencing a shift to Islamic banking was “Better Rates and Pricing”. It grabbed 33 percent of the respondents’ votes. Emirates Islamic is the official Islamic banking partner of Expo 2020 Dubai.
Responses to the survey were gathered during the second quarter of 2019 from more than 900 participants.—Zawya//Reuters