Al Rayan Bank Head of Marketing: “Partnership is the essence of Islamic banking”

The UK’s largest Islamic bank is well placed to navigate upcoming changes such as the Consumer Duty due to its focus on partnership with its customers, says its Head of Marketing Ben Collins.

A subsidiary of the second largest Islamic bank in Qatar, Masraf Al Rayan, Al Rayan Bank was set up in 2004 as the first Islamic bank in the UK and western Europe.

Ben describes it as a “pioneering brand” with high penetration. The business’s success has been built on targeted marketing through a range of channels: targeted marketing through direct marketing, Google search, Facebook ads and email, generating high quality leads for sales.

The bank has also managed to appeal beyond its core Islamic demographic. While the inputs and outputs outwardly resemble more conventional financial products, the inner workings are different. For one thing, banks are not allowed to make a profit from fees, so they can only charge for the time it actually takes to do an administrative task.

Sharia law also prohibits interest. In a home purchase plan, the customer and the bank collaboratively buy the house. Rather than a monthly payment being a combination of principal and interest payment, the customer’s monthly payment consists of an acquisition payment (to purchase a greater share of the house) and a rental payment (for the part of the property owned by the bank).

As the share owned by the customer increases over time, the rental payment will gradually decrease.

Likewise, rather than paying interest, a savings account is operated as a profit share where the bank invests the money on the customer’s behalf and then the return is shared between the customer and the bank.

While in certain products, faith might be the primary reason for somebody’s choice of product, Ben says the bank has ensured it offers competitive products.

“We’ve been able to present our savings products side by side with conventional banking products, which has been easier to do as we’ve moved to become more of a digital bank. If you look at MoneySupermarket you would see us next to a conventional bank.”

Al Rayan Bank can also use the appeal of its investment strategy as more broadly “ethical” rather than just Sharia-compliant. Sharia prohibits investments in, for example, the arms industry.

“We are certainly not shy about telling people about the ethical side of Islamic finance,” Ben says, highlighting the Sharia compliance committee that determines which companies can be invested in. This type of committee is a common feature of all Islamic banks which are now being mirrored by conventional banks when they establish ethics panels, says Ben.

Ben also argues the ethical focus means Al Rayan Bank is well placed to navigate the new consumer duty.

“A lot of the consumer duty is making sure you are focused on outcomes.

“I’m not saying Al Rayan is perfect, but with that focus at the core of the bank we are well placed – there aren’t going to be huge sweeping changes we’ll need to make.”

An example of going above the bare minimum is the bank giving 120 days’ notice to customers of changes on their current account, as opposed to the 60-day minimum.

The company also ensures that when it makes a change that it is explained why it is important and what customers’ options are, he says.

“It’s in the DNA from Sharia compliance. The essence of Islamic banking is a partnership.”

Recently the company has shifted its focus from retail customers to its commercial and private banking arm.

“The marketing position has to adjust from that historical retail focus.”

With a much smaller pool of customers to target, client relationship management is becoming more important, as is alignment to the parent company in Qatar. Relationships may be built in Qatar and followed up by marketing when the client travels to the UK.

The company has always had multiple offerings, but with the focus changing what the brand represents has also had to change. The brand has always aimed to be “aspirational”, and embody a distinctly UK-focused identity, not necessarily wanting to appear

Now, however, when talking to the commercial and premier audiences it does want to draw on the identity of its parent company.

The marketing team is small, with five people working in marketing directly, and key functions such as PR and design outsourced. Marketing sits alongside client relations, product management, premier banking and commercial under the chief commercial officer Maisam Fazal, meaning it is natural to share information between teams.

Another key focus for the next 12 months is digital. Ben says that Al Rayan Bank’s app now has around 33,000 customers using it – the most used Islamic finance app.

New features will be added this year to allow customers to reinvest finance seamlessly through the app, as well as access all comms channels. The priorities of what customers want Al Rayan Bank to talk about have changed dramatically since 2004.

“Banking has changed an incredible amount in that time – we’re certainly not the same bank we were then or ten years ago.”

He says it is a “journey to move those banking principles behind the scenes to move those into the app.”

“Because we’re not a fintech, we’re not a challenger bank – we’re 18 years old.”