A slight decline in Islamic and conventional banking products during 2020
The results of the Islamic banking index issued by the Emirates Islamic Bank yesterday revealed that the spread of Islamic and traditional banking products decreased slightly during 2020, as the use of Islamic banking products decreased from 60% to 58%, and conventional banking products from 65% to 64%, compared to With the year 2019. The index data confirmed that in the long term, the penetration rate of Islamic banking products gradually increased from 47% to 58% since 2015, while conventional banking products witnessed a decline over the years from 70% to 64%. Islamic banking products among the Muslims participating in the survey are the same, reaching 70% in 2019, and becoming 69% in 2020.
The index revealed an increase in demand for Islamic credit cards among non-Muslim customers from 24% to 28%, and for Islamic savings accounts from 28% to 32%.
This came during the Emirates Islamic announcement, during a remote media briefing, on the results of the latest version of the Islamic banking index from Emirates Islamic, which is a standard survey that reveals the progress and spread of the banking services sector in compliance with Islamic law in the UAE, in addition to future intentions For banking services customers in the country.
The "Emirates Islamic Banking Index" in 2015 was the first consumer survey of its kind to measure the progress made by the Islamic banking sector in the United Arab Emirates by tracking consumers' behaviors and perceptions of banking products and services in compliance with the provisions of Islamic law.
The index measures four categories: prevalence, impression, knowledge and intent.
Bank officials said that in the wake of the global economic slowdown in 2020 after the Covid-19 pandemic, the results of the Emirates Islamic Banking Index for this year reflect a slight decrease in the spread of Islamic and traditional banking products and the intention to buy compared to 2019, While the impression scale remained at its levels recorded in 2019.
The Executive Vice President of Consumer Banking and Wealth Management at Emirates Islamic, Wasim Saifi, said that the repercussions of "Covid-19" affected all sectors without exception, as consumers resorted to changing their lifestyles, reducing personal contact, spending more time at home, and adopting conservative behavior. Financially, amid economic uncertainty, while the global economic slowdown has affected the banking habits of consumers, pointing out that society still views Islamic banking as more supportive, reliable and better value for consumers compared to traditional banking.
For his part, Vice President of Retail Banking and Wealth Management at Emirates Islamic, Farid Al Mulla, said: “For the banking sector, digital technology plays a pivotal role in reassuring consumers of the safety of their financial resources and enabling them to continue managing their daily requirements by accessing them quickly, easily and safely from any Place, including their homes.
Pointing out that banks that realize and meet these basic needs have a greater opportunity than others to maintain consumer confidence, and chart our lifestyle and business in light of the new situation.
The index data revealed that the general impression of Islamic banks remained stable at 38%, as in 2019.
However, it increased by 12 percentage points from 26% in 2015, surpassing the prevailing impression of conventional banking, and it showed a tangible improvement specifically in areas related to services and technology, indicating that Islamic banks continued to outperform traditional banks in terms of community support, trustworthiness, and imposing fees. Less, and better profit on financing and deposits.
The index indicated that Muslim dealers have a better impression of Islamic banks on all measures, except in terms of innovation.
Pointing out the remarkable improvement in their perception of Islamic banks in terms of their support to society;
Where the percentage of those saying this opinion increased from 35% in 2019 to 41% during this year.
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