The Business Times: Islamic banking To Continue Seeing Growth In South-east Asia
August 30, 2022
Dan Jones, Partner in Oliver Wyman Digital, spoke to The Business Times on the growing demand for Islamic banking in South-east Asia, especially amid a global increase in awareness of environmental, social, and governance (ESG) investing.
Players in the Islamic financial services industry have drawn similarities between the values of Islamic financing and recent sustainability trends. The trend towards sustainability has raised awareness of Islamic financing not just within the Muslim community, but also among non-Muslim investors.
“The sort of responsibilities that come with Islamic financing are more appealing to generations of customers who are conscious about doing good and sustainability, so I think non-Islamic customers are increasingly intrigued by what this means and how it’s different,” said Dan Jones, partner at Oliver Wyman Digital.
Outside of Malaysia and Indonesia, innovations in the banking sector may also spur interest in Islamic financing.
For example, the Philippines has issued a number of digital bank licenses and incentivized companies to innovate and offer different types of financial products, Oliver Wyman’s Jones noted. “The more technology and investment that goes into the banking sectors, it is possible that we will see more Islamic financing come through,” Jones said.
On the growth prospects, making use of Shariah-compliant financial products allows banks and companies to tap a wider range of customers, on top of those that choose Islamic banking exclusively. “Some of the contracts that come with Islamic banking that are different from conventional banking may better suit the needs of customers,” said Oliver Wyman’s Jones.
Noting that investors around the world are very open to products that give them different types of terms and rates, given rising cost pressures, he added: “Price and profit rates are still absolute driving factors for customers, and the fact that it happens to be Islamic is not really a blocker for a lot of customers.”
Read the full article here.