Malaysia, April 23: New research from Mambu, a leading SaaS cloud banking platform, reveals that millennial and Gen Z Muslims in Southeast Asia are significantly contributing to the growth of Islamic banking.
The study shows that 77 per cent of Malaysian and 65 per cent of Indonesian young Muslims are using Islamic banking services alongside traditional banking. This is notably higher than the global average of 31 per cent among the same demographic.
The survey, which involved over 1,500 Muslim participants aged 16 to 40 from the UK, South Africa, UAE, Saudi Arabia, Malaysia, and Indonesia, was first conducted in 2021 and repeated in 2024. The findings are detailed in Mambu’s report, ‘Beliefs & Business: The Shape of Islamic Finance in 2024’, highlighting Malaysia’s leadership in the sector. In Malaysia, 42 per cent of consumers use exclusively Islamic banking, the highest percentage globally.
Colin Kum, Market Sales Director at Mambu Asia Pacific, emphasized the region’s potential. “Asia Pacific accounts for about 25 per cent of the global Islamic finance market, with Malaysia at the forefront. There’s a significant opportunity for banks to adopt Shariah-compliant products and services,” he said. He also noted the importance of technology in banking, with 92 per cent of respondents underscoring the necessity of online banking options from their Islamic finance providers.
The report also sheds light on the high valuation Malaysian consumers place on religious alignment, with 91 per cent preferring banks that adhere to their religious beliefs. Moreover, 74 per cent of Malaysians expect their entire bank to be Shariah-compliant, compared to 59 per cent globally.
Although Indonesia, with a Muslim population nearing 90 per cent, trails Malaysia in Islamic banking adoption, it still surpasses the global usage rate. However, 43 per cent of Indonesian respondents expressed distrust in the banks’ adherence to Shariah principles, indicating a significant area for improvement.
With 86 per cent of young Muslims globally valuing ethical investments, the report points to a robust market for Shariah-compliant financial services and the increasing focus on ethical investment options.
Media & PR: editor@dailystraits.com. Copyright 2021–Present DailyStraits.com. All rights reserved.