Mambu’s research reveals that millennial and Gen Z Muslims in Southeast Asia, particularly in Malaysia and Indonesia, are increasingly embracing Islamic banking, with significant interest in Shariah-compliant products. The study underscores the importance of technology and ethical investments in banking services.
23 April 2024 – A recent study conducted by Mambu, a leading SaaS cloud banking platform, has unveiled a significant trend among millennial and Gen Z Muslims in Southeast Asia towards embracing Islamic banking. According to the research, 77% of Malaysian and 65% of Indonesian consumers surveyed are actively using Islamic banking alongside traditional banking, surpassing the global average of 31% among their age group.
The study, titled ‘Beliefs & Business: The Shape of Islamic Finance in 2024’, surveyed over 1,500 Muslims aged 16 to 40 across the UK, South Africa, UAE, Saudi Arabia, Malaysia, and Indonesia. The findings underscore Malaysia’s leading position in Islamic banking, with 42% of respondents solely using Islamic banking, compared to 26% globally. Colin Kum, Market Sales Director at Mambu Asia Pacific, emphasized the growing interest in Islamic banking among consumers and urged banks to embrace Shariah-compliant products and services to serve new and existing markets effectively.
The report also highlights the significance of technology in Islamic banking, with 92% of respondents emphasizing the importance of online banking options. Additionally, the study revealed that 85% of consumers not currently using Islamic banking express a desire to do so, a figure that rises to 92% in Indonesia.
In Malaysia, where awareness of Islamic banking services is notably high (65% compared to 53% globally), 91% of consumers prioritize religious alignment with their banks, with 74% preferring their entire bank to be Shariah-compliant, not just the products they use. While Indonesia lags behind Malaysia in Islamic banking adoption, with 65% of respondents using Islamic banking in some capacity, the country still outpaces the global average.
A significant barrier to Islamic banking adoption in Indonesia is a lack of trust in banks’ Shariah compliance, with 43% of respondents citing this as a concern. Mambu’s report emphasizes the potential for banks to cater to the demand for Islamic finance, particularly in Southeast Asia, where 86% of millennial and Gen Z Muslims stress the importance of ethical investments.
