Purpose - The aim of this study is to investigate the problems, challenges, opportunities and future prospects of Islamic banking and finance in the UK. However, this study brings forward into 3 main purposes. Firstly, to explore the development of financial institutions, products and regulatory reforms. Secondly, to find out the performance of Islamic banking institutions. Lastly, to identify the problems, challenges and Islamic banking future prospects.
Research design, data, and methodology - An in-depth literature review was carried out to fulfil the research objectives.
Results - The findings point out the basic problems of Islamic banking industry in UK such as unfavorable regulatory environment, unfamiliarity with the Islamic Banking System, lack of portfolio management, absence of liquidity instruments, in need of professional bankers, and blending of approach of Islamic scholars with the approach of the conventional bankers. The findings also indicate that there are greater opportunities in the UK for development and growth of Islamic financial system because Muslim community is eager to take financial products.
Conclusions - It is hoped that issues pertaining to Islamic banking products can be resolved through consensus of Shariah scholars. There is need to educate the Muslim community about Islamic financial products and service.

Abstract
 1. Introduction
 2. An Overview of United Kingdom as aHome for Islamic Finance in Europe
  2.1. Development of banking institutions and productoffered
 3. Problems
 4. Problems, Challenges, Opportunities andProspects Faced by IBIs in UK
  4.1. ChallengesIslamic finance is based
  4.2. Opportunities
  4.3. Prospects
 5. Conclusion and Recommendations
 References

• Nurul Azma(Department of Accounting and Finance, Faculty of Business Management and Professional Studies, Management and Science University)
• Siti Aisyah(Department of Finance, Kulliyyah of Economics and Management Sciences, International Islamic University of Malaysia)
• Nurul Izzah(Department of Finance, Kulliyyah of Economics and Management Sciences, International Islamic University of Malaysia)
• Mahfuzur Rahman(Faculty of Business and Accountancy, University of Malaya)