Half of UK consumers would consider switching from conventional banking to Islamic finance if offered comparable services, with ethical considerations and alignment with personal values among the main attractions, research by Gatehouse Bank has found.

The survey of 2,001 adults found that 50% would be willing to make the switch, rising to 67% among those aged 35-44.

However, knowledge and willingness to switch varied considerably by age. While 65% of those aged 25-44 were open to switching to an Islamic finance provider, this fell to 55% among 18-24-year-olds and just 11% among those aged 55 and over.

Interestingly, the research found that consumers who are willing to make the switch to an Islamic finance provider were motivated by similar factors, regardless of their age group.

Alignment with personal values and beliefs was the most commonly cited motivation for choosing Islamic finance, identified by 19% of respondents, followed by trust and transparency among providers (18%). Among Muslim consumers, these figures rose to 34% and 30% respectively.

Awareness of Islamic finance was relatively strong, with 41% of respondents saying they had at least some knowledge of the sector. This compared with 38% for ethical finance and 37% for green finance.

More than three quarters (77%) also said it was important that their bank did not invest in unethical sectors.

The UK’s Islamic finance industry has been growing over recent years and is now home to approximately 20 institutions providing Islamic finance products, including five fully Shariah-compliant banks.

Andy Homer, chief customer officer at Gatehouse Bank, said: “It is encouraging to see that UK consumers are increasingly willing to consider alternatives to conventional banking and are placing greater importance on choosing financial providers that align with their personal values.

“As the Islamic finance sector continues to grow, both in the UK and around the world, consumers are benefiting from greater choice and accessibility. At Gatehouse Bank, we welcome this and are proud to play our part by offering transparent, ethical products that are open to everyone, regardless of their religious background.”

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