KUALA LUMPUR (April 23): Millennial and Generation Z (Gen Z) Muslims in Southeast Asia are increasingly embracing Islamic banking, with 77% of Malaysians and 65% of Indonesians surveyed using it alongside traditional banking, compared with only 31% globally, according to a report.

A study conducted by Mambu - a leading software-as-a-service cloud banking platform - revealed that Malaysia also boasts the highest proportion of consumers who only use Islamic banking (42%), compared with just over a quarter (26%) of global respondents.

The report indicated that across all regions, 85% of consumers who are not currently using Islamic banking express interest in doing so, with the percentage increasing to 92% in Indonesia.

Mambu Asia-Pacific market sales director Colin Kum said Asia-Pacific represents around 25% of the global Islamic finance market, with Malaysia emerging as the clear leader in the region.

“This research highlights consumers’ growing interest in Islamic banking, and clarifies that banks have to embrace shariah-compliant products and services to serve new and existing markets.

“A continued focus on technology is also crucial for banks, with 92% of respondents calling out the importance of their Islamic finance provider offering online banking options,” Kum said in a statement.

Mambu's research, initially conducted in 2021 and repeated in 2024, surveyed over 1,500 Muslims aged 16 to 40 across the UK, South Africa, the United Arab Emirates, Saudi Arabia, Malaysia, and Indonesia.

The findings were compiled in a report titled 'Beliefs & Business: The Shape of Islamic Finance in 2024'.

The report also underscored Malaysia's dominance in Islamic banking, highlighting that Millennial and Gen Z Muslims in Malaysia have a much higher awareness of the range of Islamic banking services (65% in Malaysia, compared with 53% globally).

https://www.theedgemarkets.com/node/709022