Mambu: 85% of Gen Z Muslims Want to Try Islamic Banking
Leading SaaS cloud banking platform Mambu has released new research suggesting that 85% of Gen Z Muslims actively want to try Islamic banking.
The insight comes after Mambu conducted a follow-up survey to one conducted in 2021, with participants between 16-40 across the UK, South Africa, UAE, Indonesia, Malaysia and Saudi Arabia.
Its 2024 report reveals more Gen Z Muslims are keen on banking with a financial institution that offers Shariah-compliant products than ever before.
One-fifth of those surveyed have even said they want to try Islamic Banking regardless of how difficult it is to access.
Mambu: Islamic Banking shortcomings
Mambu’s report, titled Beliefs & Business: The Shape of Islamic Finance in 2024, could point to a new future where Shariah-compliant products start proliferating the market to meet growing demand.
However, at present, a significant 39% of Muslims don’t yet know that Islamic banking is a possibility. This comes as 28% of Muslims struggle to find easy access to a bank that adheres to Islamic principles.
Indeed, 25% of Muslims who have found a bank say they need more from their bank to deliver fully Shariah-compliant services, while 18% don’t trust their bank to fulfil promises of compliance.
Omar Paul, SVP of Product and Engineering at Mambu says: “What we think about the world determines the choices we make with our money. We are seeing a growing opportunity for financial institutions to offer Shariah-compliant financial products to meet the changing needs of consumers.
“It’s no surprise that our new research echoes this, highlighting that 83% of respondents want the investments their bank makes using their money to align with their religious beliefs – an increase from 74% in 2021.
“Banks need to examine their portfolio and increase awareness around financial options available, to ensure they meet the rise in demand for Islamic banking, as well as ethical banking.”
Availability of Shariah-compliant products to grow?
Mambu’s research suggests that despite the need for Shariah-compliant banking products, Muslims continue to be underserved.
However, with record numbers of Gen Z Muslims seeking Islamic Banking, there is hope banks may tap into this market with Shariah-compliant products.
Mambu's research finds that in the UK, 31% of millennial and Gen Z Muslims use traditional/investment banking, but would switch to an Islamic Banking option should one be more widely available.
Of course, for banks to adopt Islamic Banking they first need to educate and inform Muslims that Islamic Banking is a viable option. Some 44% of those surveyed by Mambu in the UK and Saudi Arabia, respectively, say the reason they don’t use Islamic banking is because they didn’t know it was a possibility.
Some banks have bucked the trend in recent years, however. Boubyan Bank introduced Nomo, an Islamic digital bank brand, to the UK market in 2021 to meet the growing need for Shariah-compliant products.
While some banks may be under the impression there isn’t enough demand for Islamic Banking options, ethical and faith values remain important to millennial and Gen Z Muslims.
Mambu’s report finds that 82% of Muslims in these generations say it is important the investments banks make using their money do good in the world.
In December 2023, we looked at the rise of Shariah-compliant apps, and how they are opening up the investment landscape to a new demographic.
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