Investigation of Financial Technology in the Context of Risk and Compliance: A Qualitative Research on Participation Banks

Abstract

The rapid development of today's digital technology has created financial technology by integrating traditional finance and modern technology. Financial technology (FinTech) has many new business models and technologies, including the Internet of Things, cyber security, artificial intelligence, cloud computing, crypto assets and blockchain. Financial technology emphasises companies and company representatives that bring together finance with innovative services produced with the help of modern technology. In this regard, financial technologies are critical in bringing today's commercial banks to an advantageous position. Participation banks, called interest-free banking, have different dynamics than traditional banks and operate with many products unavailable in traditional banks. These products bring with them many risks. Accordingly, risk and risk factors can threaten the survival and success of these banks. However, it is noteworthy that there is a lack of literature on the functionality of financial technology for participation banks within the scope of risk and compliance. In this context, this qualitative study, in which the literature review approach was used, aimed to reveal the importance of financial technologies regarding the risk and compliance process in participation banks and to raise awareness of these technologies. In this regard, it has been concluded that although FinTech applications have some limitations, it is crucial for participation banks to use these applications in order to carry out their activities effectively and efficiently in risk and compliance processes.