Standard Chartered, a London-based bank, has released a report predicting significant growth in the Islamic finance industry by 2028. The report, titled “Islamic Banking for Financial Institutions,” forecasts that Islamic finance assets will reach $7.5 trillion by 2028, up from $5.5 trillion in 2024. This represents a substantial increase of over 36% in just four years.
Islamic banking is expected to drive the majority of this growth, with assets projected to grow from $4 trillion in 2024 to $5.2 trillion by 2028, accounting for over 70% of the total Islamic finance assets. The sukuk market, which refers to! Sharia-compliant bonds, is also expected to expand significantly, from $971 billion to $1.5 trillion during the same period.
The report, which was based on a survey of 26 representatives from leading Islamic banks in key markets, including Saudi Arabia, the UAE, Bahrain, Oman, Pakistan, and the UK, also provides insights into the priorities and trends in the Islamic finance industry. For example, green sukuk and financing were identified as the most important product innovation by Islamic banks, highlighting the growing importance of sustainability in the industry.
In terms of technology, the report found that 50% of Islamic banks have adopted or plan to adopt artificial intelligence (AI), demonstrating the increasing focus on digitalization in the industry. The report also identifies economic corridors such as China, the Middle East, and Africa as offering the greatest opportunities for growth over the next two to three years.
According to Khurram Hilal, CEO of Group Islamic Banking at Standard Chartered, “Islamic finance is entering a new era defined by scale, sustainability, and strategic integration.” Standard Chartered’s global Islamic banking franchise, Standard Chartered Saadiq, offers Shariah-compliant solutions to financial institutions, corporates, wealth, retail, and private banking client segments in over 25 countries, positioning the bank as a major player in the Islamic finance industry. Overall, the report suggests that the Islamic finance industry is poised for significant growth and expansion in the coming years, driven by increasing demand for Shariah-compliant financial products and services.