Islamic banking used to be vogue only in Asia and the Middle East. In 2012, 43% of industry activity was in Iran, according to The Economist. Saudi Arabia and Malaysia accounted for 22%. But the asset class’ appeal is growing fast. The Economist pegs the industry to grow 19.7% per year until 2018. And as Islamic banking booms, its geographic footprint is growing, too.
Banks in the west have raised money with a type of bond (sukuk) used in Islamic finance. And countries outside Muslim-dominant nations are considering issues.
Retail bankers have learned to appreciate Islamic banking's high sustainable growth. They're also fans of its responsible capital allocation.
Yet that's not all they can learn from this industry. Islamic banking offers retail banks in mature markets three big lessons on how to grow in 2016.