Although the Shariah-compliant retail financial services industry is still in the early stages of development in many markets, there are some lessons and best practice issues emerging in the industry. This report looks at the likely trends within this market and assesses the future potential for growth in mortgage finance, credit cards and wealth management.
Summary
Islamic banking has witnessed significant growth since it was formally launched and has since been boosted by the repatriation of Middle Eastern funds and economic development in that region. Given the favourable demographic trends within core markets, growth is set to continue. In addition, major international financial services firms have launched Shariah-compliant businesses; The UK, US and Singapore all witnessed the establishment of independent Shariah-compliant financial institutions; and regulators of major Islamic banking markets agreed on regulatory standards governing Islamic banking activities. As the re-structuring of global financial services continues, and previously well established financial players attempt to re-position themselves with core audiences, many are arguing that Islamic banking practices have shielded institutions and their customers from the consequences of the credit crunch. As a result, shariah models have gained favour with non Muslim customers looking for an alternative financial model with a prominent moral foundation. At the same time industry observers feel that the continued expansion of product lines has the potential to blur the lines between Islamic and other 'more mainstream' types of finance.
Scope
This report provides an extensive analysis of the global Islamic finance market
It details historical values for the Islamic finance market
The report provides a detailed analysis on key trends and drivers, marketing strategies, and challenges in the global Islamic finance market
It details the marketing strategies adopted by various banks
It profiles the major banks operating in the Islamic finance sector
Reasons To Buy
Understand Islamic finance
Gain insight on the principles governing financial and business activities in Islam
Identify the growth drivers in the Islamic consumer finance and retail banking industry
Assess the competitive dynamics of the Islamic finance industry
Table of Contents
Table of Contents
1. Executive Summary
2. Introduction to Islamic Retail Banking and Consumer Finance
2.1. What is Islamic finance?
2.1.1. Islamic Shariah and its sources
2.1.2. Principles governing financial and business activities in Islam
2.2. Developing Shariah-compliant products
2.3. Techniques used in Islamic banking and finance
2.4. The Shariah approval process
2.5. Dedicated board of Shariah scholars
2.5.1. Board of Shariah scholars at government level
2.5.2. External Shariah audit or certification
2.6. Approaches towards Shariah compliance in the Middle East
2.6.1. The Middle East
2.7. Growth drivers in the Islamic consumer finance and retail banking industry
2.8. Marketing potential
2.8.1. Shariah-compliant products as a customer acquisition tool
2.8.2. Opportunities to open up new market segments
2.8.3. Greater profitability of Islamic consumer finance customers
2.8.4. Low product penetration
2.8.5. Favourable cost structures
2.8.6. Low customer acquisition costs
2.8.7. Low development costs
2.8.8. Profitability of Islamic products
2.8.9. Greater prominence of the industry
2.8.10. Acceptance by conservative customers
2.8.11. Greater transparency and customer advocacy
2.8.12. The adapting role of Islamic financial institutions
2.8.13. Sizing up the Islamic finance market
3. Shariah-compliant retail finance products
3.1. Islamic mortgages
3.1.1. Overview
3.1.2. Murabahah-based products
3.1.3. Ijarah (leasing) plus diminishing equity based contracts
