Religions, Vol. 17, Pages 218: Islamic Finance In The Digital Age: Fintech As A Civilizational Tool

Religions, Vol. 17, Pages 218: Islamic Finance in the Digital Age: Fintech as a Civilizational Tool

Religions doi: 10.3390/rel17020218

Authors: Edib Smolo

This study explores the potential synergy between Islamic finance and financial technology (fintech). This synergy may prove to be a strong civilizational tool to help in the propagation of the Islamic finance principles as long as it is done right. Such values are used to enhance social justice, fair allocation of wealth, and moral economic involvement in contrast to profit maximization, which is the ultimate aim of traditional finance. With the advent of fintech, new technologies like blockchain, artificial intelligence, and mobile platforms emerged. These innovations do provide a chance to bring the ideas of Islamic finance to a large scale. It is on the basis of the significant scholarly and business reports that this paper will comment on how fintech can contribute to better Shari’ah-compliant products, financial inclusion, and better, transparent, and more resilient economic systems. This paper identifies the opportunity in innovation and the challenges that exist in the Islamic finance industry. The main challenges are regulatory barriers, ethics, the absence of standardization/harmonization, and skilled workers. By the concerted effort of all stakeholders, we would be in a position to develop a collaborative ecosystem that would harness technology for the betterment of humankind. Finally, digitalized finance through fintech may contribute to sustainable civilizational development if designed, governed, and implemented according to maqasid al-Shari’ah principles and integrated within appropriate regulatory frameworks.