No abstract

As new digitalization strategies storm the banking industry, banks which are behind the technological curve may struggle to keep pace. This is a well-known challenge in the Islamic banking sector in particular; however, this research shows that little is being done in order to achieve unified digitalization in operations. The 2020 Global Islamic Bankers Survey (GIBS) from CIBAFI sought opinions and data from 101 Islamic banks, which outlined both their institutions’ adoption of financial technology and their awareness of existing technologies. In addition, several technology trends—such as AI, machine learning, DLTs, and P2P lending—were analyzed separately in order to understand how they may be implemented within Islamic banking. This paper performed different statistical procedures to answer these research questions via correlation analysis and one-way ANOVA. The data were compiled and analyzed using SPSS software. In doing so, this study clarified the perspective of Islamic banks on digital transformation and answered whether Islamic banks are taking the right direction in terms of their digitalization strategies. Interestingly, most newly developing technologies have a low implementation level in Islamic banking operations globally, with the exception of mobile banking, which already has a vast global infrastructure. The results may serve as a warning to Islamic banks to invest more capital and energy in the developing fields of financial technologies in order to keep abreast of their conventional banking counterparts.

The increasing interest in Fintech, Blockchain, and Digitalization in Islamic Finance created a new area in the literature, requiring a systematic review of these academic publications. The scope of the analysis is limited to journal articles to understand the trends in the indexed journals. Results are categorized into three sections, Islamic banks’ digitalization, Blockchain and Crypto Assets research, and Islamic non-bank financial institutions’ digitalization. Islamic fintech has great potential mainly because of the overlapping norms of Shariah and fintech, making it easier to implement technological disruption into Islamic finance. Moreover, the trust shift to Islamic finance could be merged with the opportunities of fintech and increase the potential of Islamic fintech even more.