The report reveals the continued rapid worldwide growth of the industry and its significant potential for further expansion. The global market for Islamic financial services topped $2 trillion in 2014, up 12% on the previous year, and has tripled since the start of the economic slowdown in 2007. We expect it to reach £3trillion by 2018, driven by a growing domestic demand in emerging markets.
The research also reinforces London’s pre-eminence as the leading Western centre for Islamic finance, with the UK trailblazing a number of significant industry developments.
Assets of UK financial institutions offering Islamic financial services totalled $4.5bn at the end of 2014; over 20 banks in the UK – of which five are fully Sharia compliant – offer Islamic financial services, nearly double that of the US; and there are now over 100,000 Islamic finance retail customers in the UK.
In recent years the important role supportive Government policies implemented over the last decade have played in developing the UK’s position as a centre for Islamic finance, creating a fiscal and regulatory framework to broaden the market for Islamic finance products. The work of the UK’s Islamic Finance Task Force in 2013 and the relaunch of the Financial Services Trade and Investment Board (FSTIB) has also supported the development of the sector, helping to increase inward investment and strengthen the economy. To ensure the UK maintains its leading position in Islamic finance and becomes a leading player in setting international Sharia compliant standards, it will be important for the Government, regulators and the industry to work together.
The report was launched at the recent 2015 World Islamic Economic Forum (WIEF) in Kuala Lumpur, via a keynote speech by Stella Cox, Managing Director of DDCAP and Chair of our Islamic Finance Working Group.