Islamic Banking for financial institutions

What once emerged as a niche alternative to conventional finance in the 1970s has today matured into a globally-recognised segment of the financial system. In 2024, the Islamic finance industry surpassed a major milestone, reaching USD5 trillion in global assets. This represents a 12 per cent rise from 2023 and a 43 per cent increase from 2020.

In the early years of Islamic finance, adoption was limited to a handful of markets. Now, a network of over 1,980 Islamic financial institutions deliver Islamic finance products and solutions across more than 90 markets worldwide.

Yet despite this market diversification, 80 per cent of industry assets remain concentrated in five markets: Iran, Saudi Arabia, Malaysia, the UAE and Kuwait. The diversification of assets outside of these markets will depend on how the broader community responds to challenges and seizes opportunities in the coming years. Such challenges and opportunities will be both internal to the industry, and at a regional and global socioeconomic level.

Remaining updated on the latest in consumer trends and demand in Islamic finance should be an industry priority. This will enable institutions to focus innovation and expansion efforts in pivotal growth areas. Moreover, the resulting diversification of Shariah-compliant assets will help promote financial inclusion across the world.