Standard Chartered Warns of Limited Understanding of Islamic Finance
Standard Chartered’s latest report reveals that Islamic banking has grown into a $5.5 trillion global opportunity – yet most corporates remain on the sidelines, held back by limited understanding and missed access to high-growth markets across Asia, the Middle East, and Africa.
Islamic banking has evolved from a niche concept into a mainstream financial segment spanning more than 80 countries, with assets exceeding $5 trillion.
However, a new Standard Chartered report «Islamic Banking for Corporates: Broadening Horizons» warns that a lack of familiarity is keeping companies from tapping into the $5.5 trillion pool of Islamic finance assets projected to reach $7.5 trillion by 2028.
Expensive Opportunity Cost
«Islamic banking has evolved into one of the world’s fastest-growing sources of capital, but awareness among corporates has not kept pace,» said Khurram Hilal, CEO of Group Islamic Banking at Standard Chartered.
«Corporates that build Islamic finance capabilities stand to access specialised capital pools with trillions in assets, preferential pricing in oversubscribed markets, and ESG-aligned funding where ethical screening is embedded. This knowledge gap reflects an increasingly expensive opportunity cost,» he added.
Sustainability and AI Accelerate Momentum
Islamic finance principles align closely with ESG priorities such as transparency, fairness, and environmental responsibility. In 2024, sustainable Sukuk were oversubscribed by 4.3 times their issuance value, compared to 3.1 times for conventional Sukuk – evidence of surging investor appetite for instruments meeting both Shariah and sustainability criteria.
Digital innovation is adding further momentum. Tokenised Sukuk, blockchain-based settlements, and AI-driven Shariah-compliance tools are transforming how capital is raised and managed, reducing issuance costs and improving cross-border governance.
Gateway to Emerging Trade Corridors
Islamic banking is also providing corporates with access to fast-growing trade corridors across the GCC, Southeast Asia, South Asia, and Africa – markets increasingly expecting or mandating Shariah-compliant finance. Together, these regions form the USD 5.7 trillion South-South Corridor, now accounting for nearly a quarter of global trade.
The Halal economy alone represents a $2.2 trillion opportunity, supported by initiatives such as Standard Chartered Saadiq’s Halal360 and expanding Islamic trade-finance networks.
Bridging Interest with Expertise
Standard Chartered remains the only international bank operating a global Islamic-banking franchise, serving clients in more than 30 markets. The bank has arranged over $200 billion in Islamic financing, from Sukuk and structured trade to sustainable-finance solutions.
«Islamic finance is now a strategic conversation in boardrooms,» Hilal added. «Our role is to bridge interest with expertise, helping global corporates deploy practical and cross-border Shariah-compliant solutions that support their business strategies.»
