Half of UK consumers willing to switch to Islamic finance

• Over three quarters (77%) of UK consumers think it’s important that their bank does not invest in unethical sectors.
• Those aged 35-44 are most inclined to make the switch, with two thirds (67%) confirming they would be open to Islamic finance.
• The largest motivating factor for choosing Islamic finance is its alignment with value system and beliefs.

Half of UK consumers (50%) have shared that they would be willing to switch from conventional banking to Islamic finance if it offered comparable services, according to new research published by Gatehouse Bank.*

The Islamic finance industry is one of the fastest growing areas of financial services globally, predicted to grow to over US$4 trillion in assets by 2030, from a market of US$200 billion in 2003.[1] This global growth opportunity is complemented by strong consumer demand in the UK, with Shariah-compliant products and services proving popular among consumers of all religions or of no religion.

The Bank’s new research follows two years after the publication of its Islamic and Ethical Finance Consumer Report, which examined perceptions, awareness and understanding of Islamic, ethical and green finance in the UK. Not only does the latest research show a continued willingness to switch but awareness of Islamic finance remains strong, with over two fifths (41%) of respondents stating that they have at least some knowledge of the industry.

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.

Motivating factors

When asked what would motivate them to choose Islamic finance, respondents cited alignment with their value system and beliefs (19%) and that providers are trustworthy and transparent (18%) as the most important factors. This rises considerably among Muslim consumers, with over a third (34%) choosing Islamic finance due to its alignment with their value system and beliefs, followed by a similar number of people (30%) who said that providers are trustworthy and transparent.

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.

Knowledge of Islamic finance among UK consumers matches that of ethical and green finance

There remains a strong appetite for Islamic, ethical and green finance among UK consumers, as 41% of respondents had at least some awareness of Islamic finance. This closely correlates with ethical finance (38%) and green finance (37%), highlighting the strong alignment between the Shariah principles and sustainable and ethical practices.

Unsurprisingly, Muslim consumers were more likely to have at least some awareness of Islamic finance, with over three fifths (63%) stating this. However, Muslim consumers were also much more likely to be knowledgeable about green finance (51%) and ethical finance (55%) too, further highlighting the interconnectedness between these types of alternative finance products.

Knowledge gap among older generations

A finding consistent with Gatehouse Bank’s 2024 report is that those aged 45+ were much less likely to have knowledge of Islamic, ethical or green finance and the least likely to be open to switching to an Islamic finance provider. This is particularly prevalent for those aged 55+, with only just over 1 in 10 (11%) willing to make the switch. In comparison, over 6 in 10 (65%) of those aged 25-44 would be open to switching, followed closely by over 5 in 10 (55%) of those aged 18-24.

This highlights an opportunity for alternative finance providers to provide better education and provisions for older generations to ensure they are not missing out on what alternative finance providers have to offer.

Andy Homer, Chief Customer Officer at Gatehouse Bank, commented: “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.”

*Research was commissioned by Gatehouse Bank and carried out by Censuswide. The survey anonymously surveyed 2,001 UK respondents, aged 18+ living in the UK between 28 September – 2 October 2026. Comparable services were defined as the selection of products, online services, customer support, pricing and ease of access.

[1] Research and Markets, 2022: UK Islamic Finance Market – Growth, Trends, Covid-19 Impact and Forecasts (2022 – 2027) Report.