With strong adherence to ethical values that are in vogue to both customers and investors today, and a core demographic population segment that is growing rapidly, Islamic finance is an intriguing opportunity for the various participants in the UK financial services landscape.

With 20 plus organizations operating in this space in the UK, the market presence is quite robust and broad. However, despite the Islamic finance sector’s strength in values and demographic viability, its adoption into the mainstream population of both Muslims and non-Muslims has been a struggle. This has been in some part due to a lack of understanding of the core values of the offering along with some misinformation; however, it can also be argued that the lack of adoption to digitalized service offerings have also impeded the sector in reaching its potential.

This paper explores how IF has grown within the UK financial services landscape in the recent years and what we believe is a significant growth potential which can be unlocked by harnessing/ embracing digital capability. We will also review the current climate and the appetite of these Islamic financial institutions (IFI) that are broadening their horizons, searching for ways to make products and services more accessible for their customers. Finally, we will explore inherent challenges in the market which are opportunity areas for IF to focus on in the near term.