Tehran (IQNA)- Islamic financial service providers are increasingly trying to target markets in non-Muslim majority countries, and compete directly with conventional banking services in these countries, by strengthening and diversifying their financial services.
A recent survey by ‘Maybank Islamic Berhad’ in Malaysia, revealed that Islamic finance experts believe that the current growth rate of 10-15% could increase alongside an increasing focus on ESG (Environmental, Social and governance), and sustainability. Indeed, 58% of respondents believe that the annual growth rate of Islamic finance, over the next five years, could be more than 15%.
UK-based bankers said the industry has taken the growth of markets in non-Islamic countries very seriously.
Andrew Ball, CEO of Bank of London and Middle East (BLME), explained: “We have two categories of clients, investors from Persian Gulf countries who see the UK as a safe haven, and at the same time time, have religious considerations, and others in the UK and Europe, who want transparent deposit accounts with no hidden fees. ESG is very broad in its regulatory agenda, and we are only at the beginning of the journey. Clients and organizers are trying to make more informed decisions. Islamic financing is a little more complex than conventional banking. BLME has an in-house Shariah board that oversees transactions.”
In Dubai, Munir Khan, head of the Middle East division of British law firm Simmons & Simmons, said: “It is not surprising that Britain has a more developed Islamic financial industry than France and Germany, although both countries have large Muslim populations. The UK is home to an independent BLME-compliant bank. British banks, HSBC Amana, Lloyds Bank and Standard Chartered Bank also have Islamic branches. Britain has the most advanced Islamic financial market in the West, and this is partly due to its advanced tax system, which provides the basis for products and services that comply with Islamic law. Bank of Abu Dhabi in the United Arab Emirates (UAE), and Bank of Malaysia are leading banks in the field of Islamic finance. In the Middle East and Southeast Asia, banks offer a wider range of products and services (including online services), compete with conventional banking systems and even hold market share”.
The development of FinTech, including in the Chinese bloc, has widened the reach of the Islamic finance system. In February, the Australian-based halal financial platform “MRHB DeFi”, launched the “Sahal Wallet” which is the world’s first ethical and halal cryptocurrency wallet. However Naqib Mohammad, CEO of ‘MRHB DeFi’ said, “Crypto projects are not able to cover religious communities in Northern Europe and Russian Federation countries where 7,000 of our users. By obtaining the Halal label, the MRHB will allow an entry of 3 trillion dollars of Islamic financial liquidity”.
Rakaan Kayali, CEO of Practical Islamic Finance, a US-based company, said Islamic finance provides a distinctive tool and is not just a moral issue. His company advises, among others, the American car manufacturer Tesla and the German chemical manufacturer BASF, on investments according to Islamic law, and makes recommendations to its clients who, if they are not Muslims, realize the difference.