The pandemic continues to upend the financial situations of many and as a result, Australians are turning to new ways to invest and save. But for those that Australia’s big banks don’t cater for, the recent tumultuous years have highlighted a glaring issue: traditional financial services are failing to meet the needs of our growing and increasingly diverse population.
As Australia diversifies so should the services on offer. Australian Muslims, for instance, are a growing market that are traditionally well-educated, hard-working, and great at saving. Yet, a recent study by Hejaz Financial Services found that a significant portion of Australian Muslims are avoiding everyday financial products like savings accounts and insurance because of a lack of suitable options. Of those that are using traditional financial products for investments like a mortgage, almost half (46 percent) are doing so “reluctantly” in the knowledge that income from interest runs contrary to their religious beliefs.
Even more concerning, the research found that over 1 in 3 Australian Muslims keep significant cash savings at home because of a lack of suitable finance options and to avoid earning non-Sharia compliant interest. In a developed country such as Australia, this situation beggars belief. Besides the obvious security risks associated with storing cash savings outside of a secure facility, a decision like this leaves many Australian Muslims at a financial disadvantage, unable to generate wealth or invest for their future.
Ethical financial products take centre stage amidst a growing Australian population
The demand for ethical financial products that align with religious and core beliefs is also growing. Hejaz Financial Services has seen the rise of ethical and impact investing, with more consumers seeking out alternative finance options that align with their personal values and beliefs. Looking forward to 2022, Muslims and non-Muslims will invest with purpose in sustainable companies, industries, and solutions that ‘do no harm’ and have a positive impact.
Sharia-compliant financing is a clear example of these underlying environmental, social, and corporate governance (ESG) principles. To be classed as Sharia compliant, investment in the following business activities is not allowed: conventional banking and insurance, alcohol, pork and all non-Halal food items, gambling, tobacco, adult entertainment, conventional derivatives, weapons, and other impermissible actions as decided by the Sharia Supervisory Board.
Australians want to take ethical finance into their own hands
There is an appetite in the Islamic community for proactive finance management, with 2 in 5 respondents saying they are educating themselves and searching for financial resources. Almost a quarter (23 per cent) are currently seeking help from a professional adviser, while many are turning to family, friends, and colleagues for advice.
As interest in ethical investments and companies with positive ESG credentials rises, alongside living expenses, it is our mission to provide suitable Sharia-compliant financing options. Our ambition is to become Australia’s first Islamic Bank.
If your new year’s resolution is to reduce your social and environmental impact, a great first step is to review your finances. What are you personally investing in? What is your superannuation fund investing in on your behalf? These are important questions with sometimes difficult answers. Hejaz Financial Services’ network of financial experts can assist you in making ethical and sustainable decisions for your financial future today.