Look no further! A new article by Bilgehan Akbiyik presents current findings on the German market and provides data on a representative customer survey.
This study discusses the current state of Islamic finance in Germany and provides valuable insights from a consumer survey conducted in 2022. Despite Germany being home to the second largest Muslim population in Europe, with 5.6 million individuals, the Islamic finance market remains relatively unknown and under-researched. This untapped market holds immense potential, yet there is a lack of sufficient research and understanding surrounding it.
Germany boasts a strong economy, with a GDP of 4.2 trillion USD in 2021. While large German banks and insurance companies have been successful in offering Islamic finance services internationally, the local supply is still limited.
The survey conducted by INAIA aimed to understand customer needs and expectations regarding Islamic finance in Germany. It involved 386 participants, including 269 who were already Islamic finance customers. The net promoter score (NPS), which measures customer satisfaction, was determined to be -63, indicating overall discontent among Islamic finance consumers in Germany.
In the survey respondents showed a strong preference for precious metals with (96%), followed by investment funds (75%). Real estate financing, particularly using the ijara method based on rent as a financing cost, was the most interesting financing instrument for consumers. Additionally, the importance of Sharia authorization and audit received a high NPS of +56, indicating its significance to Islamic finance consumers in Germany.
The survey uncovered specific customer expectations such as diversification of finance products, accessibility, transparency, cost efficiency, trust, individual offers (robo advisors), service on demand, quality, and competency. It also revealed that customers sought long-term investments, favored precious metals, and had a high demand for other assets like investment funds and stocks.
Foreign suppliers looking to enter the German Islamic finance market should consider the preference for suppliers authorized and certified by an independent Sharia board. Additionally, a significant portion of Islamic finance consumers expressed a preference for local providers, suggesting potential cooperation opportunities between foreign and local suppliers.
The insights from the survey can also help B2B suppliers recognize cooperation opportunities with finance institutions (FinTechs), insurance, and re-insurance companies to meet the financial needs of Islamic finance customers in Germany.
To delve deeper into the status quo of Islamic finance in Germany and gain valuable insights, don’t miss the full article available on the IFN Islamic Finance News website.
