A global survey of 2,000 Muslim youths revealed that technology is a major deciding factor for most of them when choosing whom to bank with. This is against the backdrop of greater appetite for ethical and Shariah compliant financial services, signaling a lucrative opportunity for Islamic fintech and digital services.
Engaging millennial and Gen Z Muslim consumers in this study, cloud banking platform Mambu found that 70% of its respondents valued the importance of being able to make an investment without seeing someone in person, 74% emphasized the importance of a mobile banking app, while 80% insisted on the importance of being able to access banking services anywhere, at any time. More telling is the fact that 78% confirmed the availability of online banking options is critical, with 76% stating that it is a dealbreaker if online avenues are not available.
“This illustrates the growing demand among younger generations for efficient mobile banking solutions that can keep pace with their busy lives,” Mambu noted in its research. “Simply put, to remain competitive, banks must embrace innovative technology solutions in order to attract younger users who are the future of Islamic banking.”
This trend for digital convenience among the digital-savvy cohort is taking place simultaneously with a growing demand for ethical and religious-driven financial services. Mambu’s study found that 74% of its respondents want banks to invest in line with their religious beliefs, while 75% want them to make investments that ‘do good in the world’. Almost two-thirds were against their banks lending to tobacco companies while 69% would rather their banks not lend to gambling institutions.
“Younger consumers are demanding financial change, and the Islamic finance market is no exception. Our research illustrates how Islamic banking trends mirror the demand we are seeing for ethical banking practices more broadly,” said Elliott Limb, the chief customer officer at Mambu. “With 1.9 billion Muslims underserved globally, it’s clear that there’s a huge opportunity for both Islamic and conventional banks alike to provide compliant solutions for the modern consumer.”
The firm highlighted that the findings have particular relevance for Southeast Asia, home to a young and digitally-savvy population. “Islamic banking is ripe for disruption and long overdue for a digital overhaul in the region — results of this survey identify that meeting the needs and expectations of young millennial and Gen Z consumers will ultimately drive change in the Islamic finance industry across Asia Pacific,” Myles Bertrand, Mambu’s managing director for APAC, shared.