More UAE residents believe that Islamic banks transactions fees are lower than their conventional rivals, according to a survey published yesterday.
Around 25 per cent residents believe that Shariah-compliant banks offer lower transaction fees as compared to 21 per cent for the conventional lenders.
Conducted by Dubai-based Emirates Islamic bank, the survey results showed that more UAE residents opt for Islamic banks when it comes to auto finance rather than the conventional banks while in all other categories they prefer the latter.
Around 52 per cent residents prefer Shariah-compliant banks as compared to 49 per cent for the conventional lenders.
UAE residents believe that Islamic banks support the community more and have lower transaction fees as compared to conventional banks while non-Muslim users rate conventional banks higher on technology, innovation and financial soundness basis.
It said nearly half (47 per cent) of the UAE’s consumers have at least one Islamic banking product while one-third (34 per cent) have an Islamic product from a Shariah-compliant bank.
“With three out of four people in the UAE willing to consider an Islamic banking product, there is clearly an opportunity for the industry as we continue on our path to become the global centre of the Islamic economy.
"Trust, fairness and community responsibility are core pillars of the Islamic banking proposition and clearly people associate with that. Yet, the same consumers also want the best products, technology and service,” said Jamal Bin Ghalaita, CEO of Emirates Islamic.
Bin Ghalaita was speaking at a press conference to announce the launch of inaugural annual Islamic Banking Index which will focus on ‘penetration’, ‘perception’, ‘knowledge’ and ‘intention’ of UAE consumers with regards to their Shariah-compliant banking.
The survey was conducted online in September 2015 from over 900 UAE residents aged 18+ with a bank account in the UAE and earning more than Dh5,000 per month.
Nearly six in 10 residents have knowledge of at least one Islamic banking product structure while close to half of users – 46 per cent – and over a quarter of non-users – 27 per cent – of Islamic banking products can select the right definition of ‘Murabahah’ as an indication of correct knowledge.
Looking more closely at the split between Muslim and non-Muslim consumers, Muslim consumers have a fairly even number of conventional and Islamic products at 63 and 62 per cent, respectively.
While conventional products have an edge when it comes to credit card, current account with salary transfer and current account, the incidence of Islamic products is significantly higher in savings account, personal finance and auto finance categories. In the savings account category, for example, 36 per cent of Muslims have a conventional account, while a little over two-thirds (67 per cent) have an Islamic product.
However, 26 and 27 per cent of the respondents have expressed their intention to acquire an Islamic and conventional banking product respectively in the coming 6 months. While 75 per cent of all intenders are open to Islamic banking products. 86 per cent of Muslim intenders and 59 per cent of non-Muslim intenders are open to Islamic banking products.
Among the UAE residents, 21 per cent said they only seek Islamic banking products, while 54 per cent said they are open to both.