"The digital transformation has also provided the opportunity to truly embed Islamic financial institutions within the banking system."
The result is an opportunity for the banking sector; and knowing how to capitalise on that will be key.
Consumers are demanding pace and efficiency, opting for direct mobile applications and online interactions over face to face meeting, phone calls or emails. Since the onset of the Covid-19 outbreak, this trend has accelerated as firms pivoted their business models to cater for these direct consumer expectations. This has boosted e-commerce and the shift to digital payments.
Challenger banks, meanwhile, have cemented their role within the UK financial services industry, with these banks having grown in search by 32% between Jan 2016 – Jan 2019, delivering innovative services to meet new consumer demand.
Technology is also helping banks which are not rooted in the high street to climb the best-buy tables and deliver competitive products for consumers – turning heads away from more mainstream options.
At Al Rayan Bank we recognise that the financial landscape is evolving, which is why last year, we launched our new Digital Banking services for customers to manage their day to day banking directly at their own convenience. Our Mobile Banking app is now used by more than 22,000 of our customers and we expect this audience to keep growing in the months ahead as we continue to make further improvements.
Together, the growth of fintechs and challenger banks gives the banking sector a significant growth opportunity. Not only is there significant headroom in the market to take advantage of, but challenger banks excel at appealing to previously untapped audiences, such as the younger generations, who are frequently reported as looking for easier, more convenient ways to manage their money – sometimes for the very first time.
But the digital transformation has also provided the opportunity to truly embed Islamic financial institutions within the banking system. Al Rayan Bank currently has 90,000 customers across the UK, with over a third believed to come from a non-Muslim background. In recent years, the bank’s ethical, Sharia banking principles, combined with its competitive products has increased its appeal among mainstream audiences and we’re confident that extending our digital capabilities will help to raise awareness of Islamic finance overall.
During 2020 we’ve seen organisations from all sectors adapting to change to ensure they’re continuing to meet consumer demand. Further change is sure to come but by embracing digital technologies and channels, and by looking at what customers will want, not just in 2021 but in 2031 and beyond, the banking sector will be well placed to thrive.
