The Impact of Fintech on Development of Islamic Banking Sector in the Contemporary World

Abstract

Technologies of the future drive an important role in effective growth of Islamic banking sector by creating transformational waves fostering the emersion of "Fintech", which, compared to the traditional financial system, fulfills several advantages. Financial technologies appear to have a significant participation in the empowerment of individuals who lack access to financial services and consequently lead to immediate and continuing interest for individuals, the planet, and wealth. The rapid alteration of financial sector has been spread all over the world. The quick digitization drove a heavy use of technology in banking industry and in Islamic banking sector in particular. This paper examines how financial technology innovations induce financing efforts to enhance the quality of Islamic banking sector services in contemporary world and analyzes the new concept of digital Islamic banking. The present study determines the matrix correlation between Islamic banking assets and Fintech technology with help of statistical, graphical method of analysis, tabulation as well as methods of scientific knowledge.

Financial technology and performance in Islamic and conventional banks

“…Islamic banks are limited by higher costs connected with shariah advisors, specificities products and auditors. The levels of innovation in Islamic financial institutions are low because the evolution of Islamic finance is regarded as a recent activity (Al-Salem, 2009;Panjwani and Shili, 2020). When compared to conventional banks, Islamic banks appear to be slower to respond to the influence of FinTech (Ali et al, 2019a).…”

Future and Current Research Directions of FinTech: A Bibliometric Analysis

“…Technologies play an important role in effective growth of Islamic banking industry by transformational waves, which can be compared to the traditional banking system. Due to innovations in financial technology, the quick changes in financial sector have been spread all over the world in banking sector and in Islamic banking sector in particular (Panjwani & Shili, 2020). The innovation in information technology has emerged to ease daily banking commercial transactions.…”

Impact of Financial Technology on Improvement of Banks’ Financial Performance

“…Yudaruddin (2022) explains that Islamic banks face higher costs associated with Sharia advisors and have lower levels of innovation compared to conventional banks. Panjwani and Shili (2020) also point out that the degree of innovation in Islamic financial entities is generally low. Furthermore, Ali et al (2019) have found that Islamic banks respond slower to the impact of FinTech when compared to conventional banks.…”