Challenges and Opportunities for Islamic Banking and Finance in the West: The United Kingdom Experience

Abstract

Islamic finance has become increasingly significant in financial centres in the West, notably London, despite the regulatory hurdles presented by operating in a nonMuslim financial environment. The growth of Islamic finance partly reflects demand from Muslim resident and non-resident clients for Islamic deposit facilities and fund management services which involve shari’ah compliance. At the same time Islamic financing methods are viewed as a challenge and opportunity by Western bankers, many of whom have sought to get involved in this growing industry. In client driven societies there is a willingness by those in financial services to listen and learn from the experiences of Islamic banks, which in the longer run may bring a major break through for Islamic banking at the retail level in the West.