Financial Technology Inclusion in Islamic Banks: Implication on Shariah Compliance Assurance

Abstract

The global technology development has made rapid changes and revolution on the financial services landscape that enforce most banking system including Islamic banks to be more innovative and digitalized. In relation to the technology growth, Islamic banks are now collaborating with Financial Technology (FinTech) companies to grow their market shares. Through critical review of the literatures, we highlight that the inclusion of FinTech may provide important avenues for the Islamic banking industry to offer more innovative financial technology products while being conscious on the morality and Shariah compliant aspects. Besides the beneficial impact and value creation on the application of technology system and information, we also critically highlight several issues on financial risk associated from the technology development and Shariah compliance. We also highlight that it is crucial role for Shariah boards to have the necessary knowledge and skills and to be active with the management of Islamic banks in developing new financial technology products.

Mapping A Decade Of Financial Technology Landscape : Open Knowledge Maps

“…(Setyaningsih, 2018), (Tampi, 2019), (Andari et al, 2020), (Cahyo & Tri Bawono, 2021), (Widyastuti & Hermanto, 2022), (Sihotang & Kuning, 2022) and (Rohmah et al, 2022). Furthermore, research focusing on Islamic Banking, Banks Implication, and Consumer Satisfaction (Cluster 2) has been conducted by (Narastri & Kafabih, 2019), (Haridan et al, 2020), (Utami & Slamet, 2021), (Arif et al, 2022) and (Shafira & Amsari, 2022).…”

Exploring the moderating role of religious orientation on Islamic Fintech adoption

“…Prior study emphasizes the crucial role of robust Shariah administration systems in constructing count on the IMEFM 17,2 honest dependability of Islamic fintech products. Furthermore, a research indicates a positive link in between the level of spiritual devotion among users and their inclination to accept Islamic fintech solutions, highlighting the considerable influence of confidence on financial advancement choices in the Islamic setting (Haridan et al, 2020;Aulia et al, 2020;Ali and Ahmad, 2019).…”

Finding Customer Satisfaction and Loyalty Factors in Islamic Bank Digital Users

“…Digital banking, as a new concept in electronic banking, aims to enrich the standards of online banking and mobile banking services by integrating digital technologies, for example, strategic analysis tools, social media interactions, innovative payment solutions, and mobile technology, and focus on user experience (Alkawsi, Ali, & Baashar, 2021;Tugade, Reyes, & Nartea, 2021), to compete with conventional banking, Islamic banking also opens up with innovative technology to gain competitive advantage and market share (Haider, Changchun, Akram, & Hussain, 2018). Islamic banking, as a financial intermediation institution tasked with collecting funds from the public and channelling them back to the public based on Sharia principles, is forced to adapt by implementing digital banking (Haridan, Hassan, & Alahmadi, 2020).…”