UK institutions have been providing Islamic finance and related professional services for almost 40 years and we are now widely considered to be the Western centre for Islamic finance. According to the latest ICD-Thomson Reuters Islamic Finance Development Report (2016), the UK is ranked 22nd out of 124 countries in terms of its overall Islamic finance offering. This puts it in first place in Europe, and in fourth place among non-Muslim-majority nations (after Singapore, Sri Lanka and South Africa).
The Government’s commitment to progressive policy interventions has enabled the UK to create a fiscal and regulatory framework intended to broaden the market for Islamic finance products. The Islamic finance sector operates under legislation that applies to all sectors and, as a secular regulator; the Bank of England’s policy is not to provide a level playing field between conventional and Islamic finance.
As the industry has developed, the breadth of Islamic products and services offered in the UK has grown and is increasingly competing with offerings of conventional financial institutions. Assets of UK-based Islamic finance institutions totalled more than $5bn in 2016 (TheCityUK estimate based on Islamic Financial Services Board, ‘Islamic Financial Services Industry Stability Report’, May 2017).
Services in the UK are offered by financial intermediaries, asset managers, insurance providers and more than 30 international law, accountancy and consultancy firms. The UK is the leading centre of Islamic finance education and training.
(“Global Trends in Islamic Finance and the UK Market”, TheCityUK, 2017)
Islamic finance plays a significant role in infrastructure development in the UK and has funded the following notable developments:
A fundamental part of the UK’s economic success stems from bilateral trade. This will be more important than ever before post-Brext when the UK will be seeking to develop greater economic and trade agreements across the globe. In this context Islamic finance can offer a gateway to building new relationships and accessing new markets.