Date of Award

8-2022

Degree Type

Thesis

Degree Name

Departmental Honors

Department

Marketing and Strategy

Abstract

A ubiquitous number of articles have examined the finance and banking systems used throughout the world (conventional). This paper aims to provide some evidence of the value of the Islamic banking system and why the current non-Islamic systems should implement certain aspects of the Islamic finance system. To make this claim, I rely on secondary research data to support my arguments. Islamic banking has experienced rapid global growth. This paper uses the United Arab of Emirates as the scope of this research because both banking systems have operated in the UAE for several years. Therefore, existing data and statistics from the UAE could provide a useful context for the analysis. According to The Business Year: Dubai 2020 book, the UAE’s Islamic institutions contributed approximately 8.3% to UAE GDP (Gross Domestic Product) in 2018. More than half (55%) of the country’s population owned at least one Islamic financial instrument in 2017. Whereas the number of customers of Islamic banks who are not Muslims grew by 12% in the same year (Shome et al., 2018). Financial analysts estimate that the Islamic financial system will expand by 58% to $3.8 trillion in 2023, up from $2.4 trillion (Al-Malkawi and Pillai, 2018). The rising turnout for the Islamic banks in the UAE would increase their profitability and the rising number of investors which would help the banks generate greater revenues. For these reasons, I contend that the Islamic finance and banking system could provide significant value to the conventional banking system.

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Faculty Mentor

Sherzod Akhundjanov

Departmental Honors Advisor

Alexander Romney

Capstone Committee Member

Abdulkafi Albirini