Shariah-compliant challenger Gatehouse Bank has published new research on consumer awareness, perceptions and experiences of Islamic, ethical and green finance.
The report comes five years after the inaugural study in 2019, which examined how Islamic finance was viewed by consumers of the Muslim faith.
This year’s report revealed a growing awareness of Islamic finance among Muslim consumers in the UK – from 77% in 2019 to 90% in 2024.
Three in 10 (30%) respondents who do not follow the Muslim faith had at least some knowledge of Islamic finance.
Consumers aged 18 to 24 years old were the most familiar with Islamic finance, with 83% having at least some knowledge of the sector.
This marks a substantial increase since 2019, where only 25% of 18 to 24-year-olds were aware of Islamic finance, making them the least familiar age group at the time.
Comparatively, 44% of 45 to 54-year-olds and 26% of those aged over 55 had at least some knowledge of the sector.
While more than half of all respondents were familiar with ethical finance (63%) and green finance (57%), consumers of the Muslim faith showed a higher level of awareness.
According to the data, 81% of Muslim consumers had at least some knowledge of ethical finance and 72% about green finance.
In contrast, just over two fifths of non-Muslim consumers were aware of ethical finance (44%) and green finance (43%).
Just over two fifths (41%) of Muslim consumers identified Shariah-compliant providers as more transparent and ethical due to not investing in harmful sectors, including alcohol, tobacco, gambling, adult entertainment and the arms industry.
However, lingering misconceptions remained, with 35% of non-Muslim respondents and 26% of Muslim respondents believing that Shariah-compliant finance was only available to those of the Muslim faith.
The research has also revealed untapped opportunities in the market, as 51% of consumers who follow the Muslim faith had never taken out a Home Purchase Plan (HPP) and 41% had never used Islamic savings accounts.
For 19% of non-Muslim respondents, difficulty understanding how Islamic finance works was a barrier to using these products.
Charles Haresnape, CEO at Gatehouse Bank, said: “The familiarity with ethical and green finance among UK consumers of the Muslim faith reflects the interconnectedness of Shariah principles, community support and environmental stewardship.
“In turn, this presents a unique opportunity for financial institutions to cater to an increasingly conscientious market.
“However, the research still underscores a critical gap in accessibility and education around Islamic finance for consumers from other faiths or from non-faith backgrounds.
“By addressing these barriers and misconceptions, we can unlock significant potential for even more growth in the Islamic and ethical finance sector, making sustainable financial products available to a much wider audience.”
Andy Homer, chief customer officer at Gatehouse Bank, added: “It is encouraging to see growing awareness of alternative finance options among UK consumers of the Muslim faith, as well as an appetite to learn more about these products among non-Muslim consumers.
“At Gatehouse Bank, we have observed consumers’ willingness to align their financial goals with their ethical values first-hand, with nearly nine in 10 (87%) of our savings customers citing tree-planting as a key driver for opening a Woodland Saver account.
“This demonstrates a strong desire for sustainable and ethical products across diverse customer segments, even if more work needs to be done to further bridge the knowledge gap.”
