UAE Islamic banking sector is en route to achieve US$263 billion by 2019

DUBAI, 30th March, 2015 (WAM) -- The UAE is en route to achieve US$263 billion of Sharia-compliant assets by 2019, according to EY’s World Islamic Banking Competitiveness, WIBC, report. The industry was estimated to be worth US$127 billion in 2014, thus making it the third largest Islamic banking market by value, after the Saudi Arabian and Malaysian markets. Ashar Nazim, Global Islamic Finance Leader at EY, says, "Islamic banks in the UAE, also known as participation banks, are eyeing revenue growth through experience-led transformation of their domestic business. Stronger capital position is also driving their international expansion. Initiatives in mobile payments are likely to cause positive disruption to banks’ traditional operating models. Looking at the positive performance of Islamic banks in the UAE, the country is expected to be one of the main markets that drive the future internationalisation of the Islamic banking industry." Sharia-compliant assets in the UAE crossed the US$100 billion milestone for the first time. Islamic banking penetration in the UAE currently stands at 21.4 percent and represents a 14.6 percent share of the global market. The industry in the UAE is growing at more than twice the rate of conventional banking. Due to high demand, there is increased pressure on efficiency as more Islamic banks attempt to go mainstream. In the study, EY monitored 55,884 Islamic banking customer sentiments in the UAE on social media as part of a wider study, which looked at 2.2 million customer sentiments dispersed across various online sources in nine key markets (Saudi Arabia, Bahrain, Kuwait, the UAE, Malaysia, Indonesia, Turkey, Qatar and Oman). Banking clients were most satisfied with customer service, where positive comments on social media outnumbered negative comments by more than 5 percent. Half of all the positive sentiments monitored were around customer service levels and complaint handling. Customer feelings were mixed with respect to branch experience, online banking and phone banking. Out of the sentiments monitored on social media for all the three experiences, there was almost an equal number of positive and negative comments. The study of social media comments has revealed an improvement opportunity for Sharia-compliant banks with respect to products and services, which were ranked the lowest in terms of customer satisfaction. Half of the overall negative sentiments monitored were about disappointing experiences with regard to product and service offerings. "The call to action for Islamic banks in the UAE is to build rich insights into customers’ delight and pain points, and break operational silos. The time is right for analytics; banks need to challenge their channel capabilities and push for more customised products and services. Regulatory intervention on product design can help to both attract and protect consumers. The reputations of Islamic banks today will depend on the way banks engage with their customers," concludes Ashar. – Emirates News Agency, WAM – http://www.wam.ae/en/news/economics/1395278599330.html