46% of Muslim consumers say they have never used Shariah-compliant products, according to a study by Home Purchase Plan provider and Shariah-compliant bank Gatehouse.
This figure rises to 53% among Muslim women.
71% of Muslim consumers questioned believe that Islamic finance is dedicated to the interests of the community, while 61% believe it works hard to better serve its customers. 85% of existing Islamic finance consumers said that their experience exceeded their expectations.
Gatehouse Bank’s 2019 Islamic Finance Consumer Report aims to unpick the barriers and drivers to adoption of Shariah-compliant products by Muslim consumers in Britain. Muslim consumers contribute £31 billion to the UK economy, boasting a spending power of £20.5 billion.
A key recommendation of the report is that the industry better communicates what makes its products Shariah-compliant, after finding that 61% of consumers were sceptical about how Islamic the products really are.
Awareness and perception of Islamic finance among non-users of Islamic products is one of the industry’s biggest obstacles to overcome, with only 53% of non-users knowing anything about it, and only 35% of non-users viewing it favourably, the research found.
Among consumers who said they were not interested in Islamic finance, awareness fell to 36% and positive perception to 3%.
The study also found that, while 71% of people surveyed thought that Islamic finance was trustworthy and ethical, some 60% found it difficult to purchase, and 62% thought it was hard to compare options.
The report said that Islamic finance providers need to work with the community to increase awareness and improve perceptions of their products to boost adoption by the 60% of Muslim consumers who don’t currently use Islamic finance.
This is because friends, family and colleagues are the most common sources of information among those who have never used Islamic finance, with 34% of those yet to use Shariah-compliant products hearing about it through these channels. 28% read about it on the internet, 18% learned about it from social media, while 14% heard about it on Muslim-specific media including TV, radio and podcasts, the report found.
Beyond their community, interested consumers also value the opinions of faith leaders – with 33% relying on Islamic scholars, and 32% seeking the advice of Muslim financial experts.
People aged over 45 years value the opinions of Muslim financial leaders more than any other age group, while consumers aged between 25 and 44 value the opinion of the media more than any other age group.
Charles Haresnape (pictured), CEO of Gatehouse Bank, said: “Our report highlights that providers of Shariah-compliant finance are missing out because of a largely untapped market for their products.
“If nearly half of all Muslim consumers have never used Islamic finance that means hundreds of thousands of potential customers are waiting to be reached.
“A key lesson is that we and the whole industry need to do a better job of reaching out to the Muslim community and explaining the benefits of Shariah-compliant products.
“Most importantly, the research shows we need happy customers and faith leaders to become community advocates for Islamic finance because word-of-mouth is highly valued among Muslim consumers.”