ISLAMIC

BANKING
INDEX
BY EMIRATES
ISLAMIC™
2019

Page 1
Introduction

Welcome to the fifth edition of the ISLAMIC BANKING INDEX by

EMIRATES ISLAMIC™ - a chance to look back on the remarkable
growth of the sector over the past five years. In 2019, the sector
continues to widen its appeal to an increasing number of both
Muslim and non-Muslim customers. As the countdown begins
for Expo 2020 Dubai, Emirates Islamic has an opportunity, as the
official Islamic banking partner of the event, to truly showcase
the benefits of the Islamic banking sector to the world.

In this milestone edition of our Index, which is becoming an ever

more important resource charting the growth of Islamic banking
in the UAE, we see consistent growth across the sector. Islamic
banking products are now reaching three out of five consumers
for the first time, denoting a strong vote of confidence by UAE
banking consumers.

The perception of Islamic banking as a concept also continues

to improve, as well as the potential market. The percentage of
consumers who plan to subscribe to a Shari’a-compliant financial
product within the next six months is consistently high.

We are also in a dynamic period for the finance sector, with

technology such as blockchain and artificial intelligence changing
the ways in which we transact. Both Islamic and conventional
banks have made huge strides forward in this regard, and at
Emirates Islamic, our investment in technology and infrastructure,
with ongoing product innovations, have contributed to
strengthening customer perception of
Emirates Islamic as a truly innovative Islamic bank. This was
reinforced when we were recognised by Islamic Finance News as
the “Most Innovative Islamic Bank” in the UAE. As well as being
the first Islamic bank in the UAE to offer all 3 major digital wallets
- Apple Pay, Google Pay and Samsung Pay - we became the first
Islamic bank in the world to launch WhatsApp chat banking to
our customers, and, our award-winning mobile app continues to
be at the forefront of innovation, remaining one of the highest
rated by consumers.

In the run up to Expo 2020 Dubai, Emirates Islamic will aim to

expand the footprint of Islamic banking in the UAE and provide
innovative solutions that will support the growing needs of
Salah Mohammed Amin individuals, corporates and SMEs. This will also serve to showcase
CEO, Emirates Islamic the benefits of Shari’a-compliant finance to millions of visitors,
and cement Dubai’s position as the capital of the Islamic
economy, as per the vision of His Highness Sheikh Mohammed
bin Rashid Al Maktoum, Vice President and Prime Minister of the
UAE and Ruler of Dubai. The time for Islamic banking to come to
the forefront of the finance sector is now.

Page 3
Methodology
The ISLAMIC BANKING INDEX by
EMIRATES ISLAMIC™ is a benchmark
survey revealing the progress,
penetration and perception of the
Shari’a-compliant banking sector in the
UAE, as well as the future intentions of
the nation’s banking customers.
Page 4
The 2019 ISLAMIC BANKING INDEX by EMIRATES ISLAMIC™
survey was conducted in the UAE to determine the penetration
of Islamic banking in the emirates; as well as current
knowledge, perceptions and future intentions of consumers on
Islamic banking. Our methodology, questionnaire and sample
size has remained consistent with the first Index which was
carried out in 2015, to provide accurate information on this
fast-growing sector.
Using the YouGov Public Opinion Research Panel, responses
were gathered online in August 2019 from more than 900
panellists aged 18+ who have a bank account in the UAE with
a minimum income of AED 5,000/- per month. The sample is
representative of banking consumers in the UAE who are above
18 years; in terms of gender and nationality and covers all
seven emirates.
The findings of the survey show the uptake, perception,
attitude and receptiveness of UAE consumers towards Shari’a-
compliant banking, as well as industry progress, and areas of
untapped potential. As the survey is based on the consumers’
personal reporting and opinions, the findings may not equate
with publicly reported figures.
Top Findings

Four indicators of Islamic banking in the UAE

2019 2018 2017 2016 2015

PENETRATION
SCORE
60% 55% 52% 51% 47%

PERCEPTION
SCORE
38% 35% 31% 29% 26%

KNOWLEDGE
SCORE
37% 39% 36% 37% 36%

INTENTION
SCORE
80% 80% 74% 79% 75%

Notes:
• Penetration score is the percentage of consumers who have any Islamic product from any financial provider
• Perception score is the average rating of Islamic banks on a range of attributes
• Knowledge score is the percentage of respondents able to correctly define Murabahah. This score is calculated by
multiplying the percentage of those aware of any Islamic concept by the percentage of those selecting the correct definition
of the concept
• Intention score reflects the percentage of respondents who indicated they would subscribe to an Islamic banking product
within six months

Page 5
In-depth Insights

Penetration

% Penetration score amongst consumers

Conventional Islamic Don’t know Conventional Islamic Don’t know

2019 2018

65 60 63 55
ALL BANKING PRODUCTS 100 3 100 8

Current account with 52 41 56 37

55 6 50 7
salary transfer
63 64
Credit card 53 33 4 54 28 9

54 42 59 36
Current account 54 4 49 5

47 48 5 51 44 5
Savings account 43 44

Personal finance 18 46 50 4 20 45 49 6

39 59 38 59
Auto finance 15 2 12 3

Base: Total respondents

Islamic banking is on the rise in the UAE - three out of five respondents now have at least one
Shari’a-compliant product - 60% - up from 55% in 2018. Respondents’ use of conventional
banking products has rallied by two percentage points since 2018, but has fallen overall
by five percentage points since 2015, while Islamic products have grown by 13 percentage
points during the same period

The outlook continues to be positive for Islamic banking. There was a general increase in specific Islamic products being
When it comes to specific Islamic products, most have used by Muslims, while the opposite was true for conventional
experienced growth in the last year, with Islamic credit cards products. More Muslims are using Islamic current accounts,
and current accounts experiencing the highest increases at credit cards and savings accounts while Islamic personal and
five percentage points and six percentage points respectively. auto finance have seen a small decrease. The largest increase
has been seen in current accounts, growing from 31% to 40%
Use of Islamic products grew by five percentage points among
from 2015 to 2019.
both Muslim and non-Muslim respondents over the last
year, to 70% and 45% respectively. Use of Shari’a-compliant
products has increased faster since 2015 for non-Muslims
than Muslims, from 31% to 45%.

Page 6
% Penetration score amongst Muslims
Don’t
Conventional Islamic Conventional Islamic Don’t
know
know
2019 2018
60 70 58 65
ALL BANKING PRODUCTS 3 5

Current account with 49 48 50 46

3 4
salary transfer
59 39 59 36
Credit card 2 6

49 50 50 46
Current account 1 4

37 62 39 58
Savings account 1 3

42 54 38 58
Personal finance 3 4

68 70
Auto finance 31 1 29 1

Base: Muslim respondents

Interest by non-Muslim customers surveyed, in Islamic products fell by 10 percentage points. There was also a six
products, has seen a significant increase in all areas since percentage points increase in Islamic savings accounts for
2018, including a nine percentage points increase in Islamic this customer group, while conventional products fell by six
current accounts, while conventional current account percentage points.

% Penetration score amongst non-Muslims

Conventional Islamic Don’t Conventional Islamic Don’t
know know
2019 2018
72 71
ALL BANKING PRODUCTS 45 7 40 11

Current account with 59 61

30 11 27 11
salary transfer
69 69
Credit card 24 6 19 12

65 75
Current account 26 10 17 8

62 68
Savings account 28 10 22 9

Personal finance 51 43 6 52 40 8

53 42 56 38
Auto finance 4 5

Base: Non-Muslim respondents

Page 7
In-depth Insights

Perception

% Strongly agree amongst consumers

2019 Islamic banks Conventional banks 2018

Have outstanding apps Have outstanding apps

for mobile/internet for mobile/internet
banking banking
Support the community in 48
Are technologically Support the community in Are technologically advanced
meaningful ways 40 45 advanced meaningful ways
43
41
32
Have low transaction fees 37 Are innovative Are innovative
35 Have low transaction fees
34
31

41 Provide fast service Provide fast service

Are trustworthy 45 Are trustworthy
39 37

31 36 38 Have easy procedures

Offer the best rates for 34 Offer the best rates for Have easy procedures
borrowing / financing borrowing / financing
32 35
34 36 36 Provide solutions Provide solutions
Offer the best profit/ 44 according to my needs Offer the best profit/ according to my needs
interest rates on 38 interest rates on
deposits 48 Offer superior deposits Offer superior
Are financially sound customer service Are financially sound customer service

Base: Total respondents

The overall perception of Islamic banks continues to improve, with the percentage of
customers agreeing that Islamic banks have a range of positive attributes rising from 35% in
2018 to 38% in 2019. Perception of Islamic banks has improved steadily from 26% in 2015,
with significant improvements in key areas relating to technology and customer service
The perception of Islamic banks continues to be on par with are particularly far ahead when it comes to supporting
conventional banks, with both scoring 38% in the perception the community in meaningful ways and being considered
category in 2019. Islamic banks are better perceived than trustworthy - eight percentage points and six percentage
their conventional equivalents in several key areas, and points respectively.

% Strongly agree amongst Muslims

2019 Islamic banks Conventional banks 2018

Have outstanding apps Have outstanding apps

for mobile/internet for mobile/internet
banking banking

Support the community in 48 Are technologically Support the community in Are technologically
meaningful ways 43
45 advanced meaningful ways advanced
46
45
31 Have low transaction
Have low transaction fees fees Are innovative
35 Are innovative
35 35
31

Are trustworthy 40 Provide fast service Are trustworthy Provide fast service
47 37 37

30 36
Offer the best rates for 33 37 Have easy procedures Offer the best rates for Have easy procedures
borrowing / financing
borrowing / financing
30 33
Provide solutions
34 37 37 Provide solutions according to my needs
Offer the best profit/ Offer the best profit/
45 according to my needs
interest rates on interest rates on
38
deposits deposits Offer superior
51 Offer superior
customer service customer service
Are financially sound Are financially sound

Base: Muslim respondents

Page 8
% Strongly agree amongst non-Muslims
2019 Islamic banks Conventional banks 2018

Have outstanding apps Have outstanding apps

for mobile/internet for mobile/internet
banking banking
Support the community in 47 Are technologically Support the community in Are technologically
meaningful ways advanced meaningful ways advanced
35 47
38
34 36 Are innovative
Have low transaction fees 41
37 Have low transaction fees Are innovative
32
33

43 Provide fast service Are trustworthy

Are trustworthy 42 41 37 Provide fast service

33 35
34 Offer the best rates for Have easy procedures
Offer the best rates for 40 Have easy procedures
borrowing / financing borrowing / financing
34 33
36
34
38 Provide solutions Offer the best profit/ Provide solutions
42
Offer the best profit/ 36 according to my needs interest rates on according to my needs
interest rates on 44 deposits
deposits Offer superior Offer superior
Are financially sound customer service Are financially sound customer service

Base: Non-Muslim respondents

Continued investment in service delivery in both Islamic and Particularly positive is the continued improvement in
conventional banks has contributed to the improvement in perception of Islamic banks for Muslim respondents, the
perception for both, and is likely to have a positive impact key customer base for Islamic products. More than half of
across the banking sector in general. Muslim respondents, 51%, agreed with the statement that
Islamic banks are ‘financially sound’. Islamic banks performed
As well as experiencing an overall improvement in perception, better than or on par with conventional banks in all but three
Islamic banks are perceived to have improved in all areas categories amongst Muslim respondents.
surveyed, most significantly those relating to customer
convenience, with the number of respondents agreeing with However, if we look at non-Muslim respondents, there
the statements that Islamic banks ‘have easy procedures’ and remains a sizeable gap in perception between conventional
‘provide solutions according to my needs’ both increasing by and Islamic banks when it comes to areas such as
six percentage points. ‘technological advancement’, ‘innovation’, ‘having outstanding
apps for mobile/internet banking’, ‘having easy procedures’
The perception of Islamic banks also continues to improve and ‘providing solutions according to my needs’. While Islamic
in matters relating to technology, for example, 41% of banks have shown clear improvement over last year’s rankings
respondents agreed with the statement that Islamic banks across several of these metrics, there remains a need to
are technologically advanced, and 43% that they have address these deltas in perception in order to truly challenge
outstanding apps for mobile/internet banking. There was also conventional banks’ standing and market share among non-
a leap forward by four percentage points in the perception Muslim banking consumers.
that Islamic banks have the best profit rates on deposits, as
well as in the category ‘are innovative’.

Page 9
In-depth Insights

Knowledge

% Knowledge score

Total Muslims Non-Muslims

45
39 39
37
30
24

2019 2018

Base: Total respondents

Knowledge or awareness of Islamic banking terminology is the only category that has not
seen clear improvement since the ISLAMIC BANKING INDEX by EMIRATES ISLAMIC™ was
first launched in 2015, starting at 36% five years ago, before rising to 39% in 2018 and
falling back to 37% in 2019

Page 10
% Islamic banking product

50
Takaful
45

32
Murabahah
29

Mudarabah
20
16

17
Ijarah
12

17
Musharaka
18

12
Bina’
10

26
None
31

Base: Total respondents 2019 2018

As there has been no great improvement in the knowledge and in the Islamic banking sector in making Takaful a mainstream
awareness of Islamic banking terminology in the UAE, we aim proposition, with clear regulatory frameworks and guidelines
to take the lead in taking these concepts to the people to help being put in place, and the increase in take up shows that
create a better understanding of Shari’a-compliant finance. this has paid dividends.

While the overall knowledge score has remained consistent,
there has been a rise in the awareness of some individual
Islamic banking products. For example, 50% of respondents
had heard of Takaful, an increase of 11 percentage points
since 2015. The number of respondents who had not heard
of any Islamic banking products has steadily reduced since
2015, from 41% to 26%.
The increase in awareness of Takaful is to be expected, as it
is now a $46 billion industry. Understanding and familiarity
with the product in the financial sector in particular is, as a
result, widespread. Much time and effort has been invested
The data shows that awareness has risen of products, such as
Takaful, that have become successful in the financial sector.
It naturally follows that as other Islamic products continue to
reach larger markets, understanding and awareness of them
will organically follow suit, as the product names become
more widely used.
Unsurprisingly, understanding and awareness of specific
Islamic products is higher among Muslims than
non-Muslims, at 39% and 30%. But, overall awareness has
increased among non-Muslims by six percentage points
since 2018.

Page 11
In-depth Insights

Intention

% Islamic potential score

Total Muslims Non-Muslims

80 80 82 82
76 76

Base: Total respondents 2019 2018

The number of respondents who say they would subscribe to an Islamic banking product in the
next six months has remained consistent since 2018 - four out of five, or 80%

% Very likely to subscribe

Islamic banking products Conventional banking products

38 40
ANY ISLAMIC PRODUCT ANY CONVENTIONAL PRODUCT
34 34

19 15
Current account with salary transfer Current account with salary transfer
16 15

14 15
Credit card Credit card
14 12

18 12
Current account Current account
13 15

17 15
Savings account Savings account
15 15

12 9
Personal finance Personal finance
10 9

10 7
Auto finance Auto finance
8 7

Base: Total respondents 2019 2018

Page 12
The high interest by non-Muslim respondents in Islamic
banking products shows the broad appeal of Shari’a-
compliant finance in the UAE. It suggests that while
non-Muslims may not have the awareness or knowledge
of the sector, they can be convinced of the benefits.
While overall, respondents said they were more likely to
subscribe to a conventional banking product in the next six
months than an Islamic product – 40% versus 38%, when
it comes to individual products, people were more likely to
choose an Islamic product. The potential for respondents to
subscribe to individual Islamic banking products has gradually
increased since 2015, with current accounts seeing the
largest increase at 8%. The increase in potential to subscribe
to individual Islamic products was larger than for conventional
products. For example, the increase for conventional current
accounts with salary transfer has been from 14% to 15% since
2015, while the increase for the Islamic equivalent has been
from 11% to 19%.
As customers’ perception of Islamic banking continues
to improve, there is clear evidence from the Islamic
Banking Index of what Islamic banks must do to encourage
consumers to shift from conventional banks. 40% of
non-Muslims said better rates and pricing would encourage
them to shift to Islamic banking, while 15% said better
customer service was the priority. For Muslims, 28% said
better rates and pricing would encourage them to shift,
while 20% said better customer service was most important.

Factors influencing shift to Islamic Banking % Very important

33
28
18
13

Better Customer Better Digital Better Rates and Better Product All of the Factors
Service Technology Pricing Range

Base: Total respondents

28 28
20
14
10

Better Customer Better Digital Better Rates and Better Product All of the Factors
Service Technology Pricing Range

Base: Muslim respondents

40

28
15
11
6

Better Customer Better Digital Better Rates and Better Product All of the Factors
Service Technology Pricing Range

Base: Non-Muslim respondents

Page 13
Conclusion
The 2019 ISLAMIC BANKING INDEX by EMIRATES ISLAMIC™
shows the progress already made and the potential of
Islamic banking in the UAE. Islamic banking products now
reach three out of five respondents or 60%, but there is
still some way to go before awareness of Shari’a-compliant
finance reaches the same level as that of conventional
products. This is something that Emirates Islamic, as a
leading Islamic bank in the UAE, will seek to address in the
coming years.
While responses from non-Muslim consumers suggests
that there are categories under which conventional banks
are preferred, for example, in terms of having efficient
and convenient online banking and services according
to customers’ needs, they consider Islamic banks to have
low transaction fees, offer the best rates for borrowing/
financing and be trustworthy, which illustrates the market
potential of Islamic banking to all types of customers.
Page 14
Consumers have the opportunity to choose from any
number of financial resources at the click of a mouse button
or the tap of a smartphone, and our Index shows that
customers’ interests lie ultimately in the bottom line, with
better rates and pricing being the most cited reason that
would tempt them to shift their finances from conventional
to Islamic banks. But, as the eyes of the world focus on the
UAE for Expo 2020 Dubai, we have a unique opportunity to
reach an audience of millions. We have shown consistent
growth of the Islamic banking sector over the past five years,
and it is now time to look forward, to a bright future at the
heart of global finance.
A white paper on the Findings of the
“ISLAMIC BANKING INDEX by EMIRATES ISLAMIC™“ 2019
Published in 2019 by Emirates Islamic
Copyright © 2019 Emirates Islamic www.emiratesislamic.ae
All Rights Reserved
Content from this document may be re-published,
provided clear citing of ISLAMIC BANKING INDEX
by EMIRATES ISLAMIC™ as source.

Page 16