Islamic Finance in The Digital World: Opportunities and Challenges (Kewangan Islam dalam Dunia Digital: Peluang dan Cabaran)

Authors

  • Mohamad Akram Laldin Executive Director, International Shari’ah Research Academy for Islamic Finance (ISRA)
  • Fares Djafri Dr. Researcher, International Shari’ah Research Academy for Islamic Finance (ISRA)

DOI:

https://doi.org/10.31436/jia.v16i3.853

Abstract

Islamic finance has grown considerably over the last four decades and has a global reach. It is considered one of the fastest-growing segments of the global financial industry. One of the biggest challenges for Islamic finance in the next decade is on financial technology (Known as Fintech). In the digital world, traditional financial practice will be left behind. This paper examines the phenomenon of financial innovation and technology in Islamic finance. The research adopts a qualitative approach employing the inductive method to trace primary and secondary data on the topic and the descriptive method to describe the emergence of fintech in the Islamic finance industry. The study found that all financial innovations are generally welcomed and can be considered as benefits (Maslahah) to the customers and to the whole financial industry. Innovations in fintech become impermissible only if there is clear evidence from the Shariah that they are against the basic rules of the Shariah. The study also highlights the relationship between fintech and Shariah compliance and suggested to have a proper Shariah governance framework in order to ensure the operation of fintech is in total compliance with Shariah. Besides that, authorities and regulators are required to develop Shariah standards that would explicitly spell out the requirement of Shariah that are fundamental to fintech operations and practices.

Keywords: Innovation, Fintech, Digital World, Shariah Compliance, Islamic Finance.

Abstrak

Kewangan Islam telah berkembang dengan pesat sejak empat dekad yang lalu dan telah menjangkau capaian global. Ia merupakan salah satu segmen dalam industri kewangan global yang paling pantas berkembang. Salah satu cabaran terbesar bagi kewangan Islam sepuluh tahun akan datang adalah teknologi kewangan (dikenali sebagai Fintech). Pada era digital, amalan kewangan yang tradisional tidak akan lagi diguna pakai. Kajian ini menyelidik fenomena yang tercetus daripada inovasi kewangan dan teknologi dalam kewangan Islam serta parameter Syariah yang berkaitan. Pendekatan yang digunakan dalam penyelidikan ini bersifat kualitatif dengan mengaplikasi dua kaedah. Kaedah yang pertama ialah kaedah induktif yang digunakan untuk mengesan data primer dan sekunder yang berkaitan dengan topik dan kaedah kedua ialah kaedah deskriptif bagi menggambarkan kehadiran Fintech dalam industri kewangan Islam. Hasil kajian mendapati bahawa inovasi kewangan pada umumnya adalah digalakkan dan merupakan suatu maslahat kepada para pelanggan dan kepada keseluruhan industri kewangan. Hukum inovasi atau penciptaan sesuatu yang baru dalam Fintech akan berubah menjadi haram hanya apabila terdapat bukti jelas daripada Syariah yang menunjukkan ianya bertentangan dengan peraturan asas Shariah. Kajian ini juga mempamerkan hubungan antara Fintech dan pematuhan Syariah dan mencadangkan agar sebuah rangka kerja tadbir urus Syariah dibentuk bagi memastikan operasi Fintech adalah sepenuhnya mematuhi Syariah. Di samping itu, pihak berkuasa dan pentadbir disarankan agar mewujudkan satu piawaian Syariah yang menggariskan syarat-syarat penting dalam aspek pengoperasian dan amalan Fintech.

Kata kunci: Inovasi, Fintech, Dunia Digital, Pematuhan Syariah, Kewangan Islam.

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Published

2019-12-30

How to Cite

Mohamad Akram Laldin, & Djafri, F. (2019). Islamic Finance in The Digital World: Opportunities and Challenges (Kewangan Islam dalam Dunia Digital: Peluang dan Cabaran). Journal of Islam in Asia <span style="font-Size: 0.6em">(E-ISSN: 2289-8077)</Span&gt;, 16(3), 283-299. https://doi.org/10.31436/jia.v16i3.853