The nature of investments is a major factor for where Muslim millennial and Gen Z consumers are seeking to park their money, according to the latest ‘Beliefs Shape Business’ survey conducted by software as a service banking and lending platform Mambu.
The March 2024 online survey of 1,513 Muslims aged 16–40 found that over 80% of respondents want “investments their bank makes using their money to do good in the world”. They seek assurance these investments are ethical, and that the way banks use their money aligns with their religious beliefs.
While these youths say their banks should not lend money to companies linked to gambling, alcohol or tobacco, 83% of respondents also want investments made to be commercially viable.
Hence, respondents say the investment portfolio of the whole bank does not need to be Shariah compliant. The ratio varies with a low of 16% among Indonesian respondents (UAE: 18%) but higher among the UK (29%) and South African (30%) respondents.
“This means that even gradually beginning to incorporate Islamic banking services can see banks immediately start to win Muslim customers,” the report noted.
“If 85% of millennial and Gen Z Muslim consumers say it is important their investments do good in the world but only 77% can say this currently takes place, banks need to start interrogating the ethics of their business practices or they could risk customers walking out the door.”
But access seems patchy as among UAE respondents who do not use Islamic banking, just under a third (32%) say they did not know it was a possibility and 30% say they cannot easily access banks that adhere with Islamic principles.
Meanwhile, 81% of UK respondents and 76% of South African respondents say they do not use Islamic banking but would like to.
The report also cited Dr Hatim El Tahir, a leader at the Islamic Finance Knowledge Centre, Deloitte, who noted institutions offering Islamic financial services are increasingly embracing technology to enhance efficiency and accessibility, leveraging digital platforms for customer engagement.
“This will undoubtedly attract the younger generations like millennials and Gen Z … leveraging the emerging digital, artificial intelligence and machine capabilities to develop products and services that suit their needs and attain their aspirations.”
