“Nudging” Islamic Banks’ customers: Using behavioral insights to boost savings

Résumé

Islamic banks are important players in Islamic capital markets. Consequently, improving savings both from a balance and duration standpoints should have a positive effect on Islamic capital markets, which face depth and broadness issues. Given that saving behavior is subject to several biases at the individual investor level, this paper surveys the use of behavioral insights or “nudges” as effective tools to increase savings in conventional finance. We readapt these insights to the context of Islamic banks' consumers and make suggestions on how to apply "nudging" to increase saving in Islamic banking