But misconceptions and accessibility barriers remain, according to research
Awareness of Islamic finance among Muslim consumers in the UK has increased from 77% in 2019 to 90% in 2024, new research from Gatehouse Bank has shown.
The study also found that 30% of non-Muslim respondents have some knowledge of Islamic finance.
The research highlighted a generational divide, with consumers aged 18 to 24 being the most knowledgeable about Islamic finance — 83% reported some awareness, a significant jump from 25% in 2019. In comparison, 44% of those aged 45 to 54 and 26% of those aged 55 and older claimed familiarity with the sector.
The Shariah-compliant UK challenger bank also reported that awareness of ethical and green finance is higher among Muslim consumers, with 81% and 72% expressing knowledge of these sectors, respectively. Among non-Muslim consumers, 44% are aware of ethical finance, and 43% know about green finance.
It also noted that 41% of Muslim consumers view Shariah-compliant providers as more transparent and ethical, largely due to their avoidance of investments in sectors like alcohol, tobacco, gambling, adult entertainment, and the arms industry.
Despite the growing awareness, misconceptions persist, with over a third (35%) of non-Muslim respondents and 26% of Muslim respondents believe that Shariah-compliant finance is only available to Muslims. Additionally, 51% of Muslim consumers have never used a home purchase plan, and 41% have never used Islamic savings accounts. For 19% of non-Muslim respondents, a lack of understanding of Islamic finance serves as a barrier to using these products.
“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,” said Charles Haresnape (pictured left), chief executive of Gatehouse Bank. “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 (pictured right), chief customer officer at Gatehouse Bank, added that it was 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,” Homer said. “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.”
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