London could capture a trillion pounds' worth of the burgeoning global Islamic finance market, according to a Shariah-compliant asset management firm in the city.
Ethical Asset Management Chief Executive Saadat Khan said the UK could lure the lucrative Islamic investment by encouraging a market with truly Shariah-compliant financial products, because much of what is on offer at the moment does not suit Muslim investors' strict requirements.
Under Shariah finance rules, the charging of interest on lending is regarded as usury and forbidden. Investors must also avoid investments linked to certain things, such as pork and alcohol, which Muslims are barred by their faith from consuming.
"There are tens of billions of dollars looking for a suitable home that are doing nothing at present due to the structured nature of many Shariah-products currently available on the market," said Khan, whose firm was the UK's first Shariah-based asset manager when it was created in 2010.
"Several of these are described as Shariah-compliant or even Shariah-inspired. However, a significant number of investors are not interested in them because they are very similar to conventional products in all but name.
"Some of these are effectively conventional bonds, which are basically a promise to pay. An investment (loan) is made based on the strength of the balance sheet of borrowers who make huge profits and share a disproportionate amount of these profits with the investor.
"This model is against the true principles of Shariah Law, which encourages wealth distribution and that risk and reward is divided fairly."
London Deputy Mayor Sir Edward Lister has already been touting the city around the world as the western hub for Islamic finance.
A task force on building the UK's Islamic finance industry has been at work since early 2013 and London will host the World Islamic Economic Forum in October.
"The task force has just started and its aim is to make it easier for banks in London to have Islamic products, which is still quite a new concept to any of them," Lister told a press conference in Kuala Lumpur, Malaysia.
"Only now people are beginning to understand what the products actually mean and how they comply ... What you will see is a lot of companies introducing those products."
Globally, the Islamic finance industry is forecast to be worth $2.6tn (€1.9bn, £1.6bn) by 2017. It has grown by around 30% each year since the millennium and consultancy firm Oliver Wyman predicts that there will need to be at least 150 Islamic finance institutions by 2020 to meet the ever-growing demand.
There are more than 20 UK banks offering Sharia-compliant products, such as HSBC and RBS. There are also three Sharia-only institutions, including the Islamic Bank of Britain (IBB).
By increasing the number of Sharia-compliant financial services in London it will be easier to facilitate investment in the UK from Islamic investors.
Ethical AM's Khan, who has given evidence to the task force, argues that for a financial product to be Shariah-compliant there can be no guaranteed return on investment, such as coupon payments on bonds.
Instead, any investment should be based on risk-sharing through shared ownership of the asset, with profits or losses split between the parties.
"The purpose of the Shariah system is the same as all the Abrahamic faiths, which is not to benefit onesself only but to ensure the betterment of all," he said.
"We can make a huge positive contribution to society by operating in this manner and make a good return ethically on investments without any loss of profit. We must consider people before profit."