Islamic banking has experienced a convincing growth in recent years and the fever has spread to non-Muslim majority countries, increasing at a projected rate of 10-15% per year in countries such as the United States and Britain. In a world where society is quickly starting to avoid conventional banks in fear of scandals and profit-greedy banks, Islamic banking is seen as the more ethical and sustainable alternative to the more common conventional banking system which seems to have benefited Islamic banks. This proves to be true as the existing Islamic Finance market stands at a $2 trillion in assets according to Thomson Reuters’ Global Islamic economy Report 2016/17.
The world is paying close attention to Islamic banking following the financial crash of 2008 that shook the global economy at its roots, damaging conventional banks’ progress all around the world. As many of the world was feeling the aftermath of the 2008 crisis, as many as 500 Islamic banks expanded by 28.6% states a report by Standard and Poor’s. This pushed researchers to further explore Islamic banking and the efficiency of banks that practice it. They concluded that Islamic banking’s risk-adverse and anti-speculation policies only outperform conventional banking in periods of crisis.
In 2016, an article posted on BloombergBusinessweek expressed concern regarding an inevitable financial crisis that will hit the shores of banks all around the world. With proven resilience from Islamic banks, there is an expected surge in banks around the world in possibly implementing the Islamic system. The Islamic finance market is predicted to be worth $3,461 billion in the year 2021—that’s only 4 years away!
In addition to that, the current countries that are leaders in the Islamic finance industry such as Saudi Arabia, Kuwait and Malaysia will no longer be the main players in the Islamic finance industry. We say this because interest in the Islamic finance industry has been shown by Non-Muslim majority countries such as South Africa, Hong Kong and the United Kingdom. In fact, as many as two dozen British banks provide Islamic finance services, managing approximately $19 billion worth of assets as of 2011 and is ranked ninth in the world. There’s a reason why these Non-Muslim majority countries are showing an interest in the Islamic banking system.
Although there’s no saying for sure whether Islamic banking will dominate the future finance world, Islamic banking has a promising few decades ahead, guaranteed!