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Article
Publication date: 11 May 2022

Norafni @ Farlina Rahim, Mohammed Hariri Bakri, Bayu Arie Fianto, Nurazilah Zainal and Samer Ali Hussein Al Shami

This study aims to examine the results of structural equation modelling in applying unified theory of acceptance and use of technology in adopting Islamic Fintech among…

Abstract

Purpose

This study aims to examine the results of structural equation modelling in applying unified theory of acceptance and use of technology in adopting Islamic Fintech among millennials in Malaysia via measurement and structural models.

Design/methodology/approach

A total of 418 valid responses have been obtained from Malaysians who are using Islamic Fintech. Before the data is analysed into measurement and structural modelling preliminary analysis such as common method bias has been conducted.

Findings

All the requirements for model fit in this study have been achieved. Four exogenous constructs are performance expectancy, effort expectancy, social influence and facilitating condition. The mediating construct is behavioural intention, whereas the endogenous variable is user adoption. All exogenous constructs show significant p-values except for effort expectancy.

Practical implications

This study offers important implications, specifically for the digital economy that is currently making its way throughout every aspect of human life, namely, social, religious, financial transaction, entertainment and others. The impact of the digital economy can be traced through the emergence of Fintech. The adoption of Islamic Fintech is one of the least discussed areas academically, therefore, this study is considered necessary to explore the prediction of consumer behaviour in Islamic Fintech adoption as a part of the digital economy in Malaysia.

Originality/value

This study fills the perceived gap in the existing financial technology literature by assessing Islamic financial technology adoption via measurement and structural modelling.

Details

Journal of Islamic Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0833

Keywords

Article
Publication date: 9 April 2020

Darmansyah, Bayu Arie Fianto, Achsania Hendratmi and Primandanu Febriyan Aziz

The purpose of this paper is to investigate the influential factors on behavioral intentions toward Islamic financial technology (FinTech) use in Indonesia, for all types…

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Abstract

Purpose

The purpose of this paper is to investigate the influential factors on behavioral intentions toward Islamic financial technology (FinTech) use in Indonesia, for all types of FinTech services as follows: payments, peer to peer lending and crowdfunding.

Design/methodology/approach

This study adopted structural equation modeling using the partial least squares approach to test the hypotheses. Based on purposive sampling, the questionnaire was distributed through an online survey and received 1,262 responses.

Findings

The results demonstrate that the latent variables, planned behavior, acceptance model and use of technology, have a significant impact on encouraging behavioral intentions to use Islamic FinTech. The “acceptance model” latent variable is the most influential factor.

Research limitations/implications

This study was conducted only in Indonesia; therefore, the results cannot be generalized to other countries. However, the study provides important strategic guidelines for policymakers in designing a framework to enhance the development of Islamic FinTech and to achieve financial inclusion. It is suggested that future studies include samples from FinTech users in different countries.

Originality/value

This study adds to the literature especially on the factors affecting behavioral intentions to use Islamic FinTech. There are limited studies concerning this topic, especially for Indonesia. The unique feature of this study is the use of a large primary data set that covers most provinces in Indonesia. Furthermore, this study focuses on three types of Islamic FinTech, namely, payments, peer to peer lending and crowdfunding.

Details

Journal of Islamic Marketing, vol. 12 no. 4
Type: Research Article
ISSN: 1759-0833

Keywords

Article
Publication date: 11 April 2021

Felicia Hui Ling Chong

This paper aims to provide a reflective discussion on the different avenues of blockchain application in Islamic finance in promoting trust and transparency for increased…

1043

Abstract

Purpose

This paper aims to provide a reflective discussion on the different avenues of blockchain application in Islamic finance in promoting trust and transparency for increased accountability between parties involved in the delivery of Sharīʿah-compliant products and services.

Design/methodology/approach

This paper discusses on blockchain benefits in Islamic finance while providing an illustration with smart Sukuk. Having identified the advantages of the development of Islamic financial technology (i-FinTech), this study ends by debating a couple of challenges (computational codification of Sharīʿah principles and environmental impact) that have to be addressed to promote the development of a real sustainable Islamic FinTech.

Findings

This paper also identifies two challenges in using blockchain in i-Fintech. The first challenge refers to the extent to which Sharīʿah principles can be computationally encoded. Blockchain makes public all transactions that ease Sharīʿah compliance checks and determine if these transactions are Islamic in nature but this check can be done only after their operation. The second challenge is related to the algorithmic protocol used to validate smart contracts (including smart Sukuk). This situation calls into question the principles of Maqasid al-Sharīʿah according to which transactions should not harm society.

Originality/value

In the current debates related to the development of Islamic FinTech, this paper also identifies two challenges in using blockchain in i-Fintech.

Details

Qualitative Research in Financial Markets, vol. 13 no. 3
Type: Research Article
ISSN: 1755-4179

Keywords

Article
Publication date: 30 November 2021

Nasim S. Shirazi, Laura A. Kuanova, Adilbek Ryskulov and Aziya G. Mukusheva

This paper aims to take stock of the Islamic finance experience and aims to identify an approach for further development in Kazakhstan, using qualitative and quantitative…

Abstract

Purpose

This paper aims to take stock of the Islamic finance experience and aims to identify an approach for further development in Kazakhstan, using qualitative and quantitative assessments.

Design/methodology/approach

The paper presents a conceptual framework based on literature review and content analysis. Furthermore, the study uses a survey-based methodology to collect data and determine the prospects, challenges and possible remedies. The quantitative parameters of the potential of Islamic finance in Kazakhstan are based on the assessment of funds on bank deposits, which can be considered potential resources for Islamic financial instruments.

Findings

The results suggest improving the legal framework and institutional environment to grow Islamic finance in the country. Raising trust levels in a Shariah-based system within the local population, reducing transaction costs and reducing information asymmetry allow raising public awareness of Islamic finance and integrating Islamic finance into the conventional financial system.

Research limitations/implications

This paper is not free from limitations and does not focus on implementing the suggested results.

Social implications

This work elaborates in what way the Islamic finance advancement affects the development of economics and focuses on co-financing of real asset-based projects, with the risk and loss sharing; charity; strict prohibitions on the financing of haram activities, pseudo-needs; and subordination of the individual’s interests to society.

Originality/value

The proposed study presents originalities and it identifies the significant challenges and barriers for further Islamic financial industry development in Kazakhstan by professionals survey. Furthermore, the study assesses potential Islamic finance assets and provides recommendations for successful Islamic finance advancement, considering the peculiarities of the national economy.

Details

Qualitative Research in Financial Markets, vol. 14 no. 3
Type: Research Article
ISSN: 1755-4179

Keywords

Article
Publication date: 4 March 2021

Muhammad Ali, Syed Ali Raza, Bilal Khamis, Chin Hong Puah and Hanudin Amin

This study’s objectives are twofold; first, this paper aims to explore the determinants of perceived benefit and perceived risk of Islamic Fintech. Second, this study…

2564

Abstract

Purpose

This study’s objectives are twofold; first, this paper aims to explore the determinants of perceived benefit and perceived risk of Islamic Fintech. Second, this study examines the influence of perceived benefit, perceived risk and user trust on the intention to adopt Islamic Fintech.

Design/methodology/approach

The sample of 350 was distributed among the respondents, while a usable sample of 321 was retained for the analysis. The study performed a self-administration survey to collect the sample data while the hypothesized model was tested using SmartPLS.

Findings

The results revealed that perceived benefit and perceived risk were significant and positively influenced by their factors. Moreover, perceived benefits showed a positive and significant impact on trust. However, perceived risk had a negative and significant impact on trust. The results also found a strong positive and significant relationship between trust and intention to adopt Islamic Fintech.

Originality/value

The outcome of this research may be used to develop strategies for Fintech and enables the financial sector to attain economies of scale in the world.

Article
Publication date: 7 June 2022

Yudho Taruno Muryanto

This article aims to explore legal challenges regarding the regulation and supervision of Islamic Fintech and to construct Sharia compliance regulations to strengthen the…

Abstract

Purpose

This article aims to explore legal challenges regarding the regulation and supervision of Islamic Fintech and to construct Sharia compliance regulations to strengthen the supervision of Islamic Fintech operation.

Design/methodology/approach

This type of research is legal research, adopting the statute approach, comparative approach, and conceptual approach. The focus of the study is Indonesia with comparative studies with Malaysia and the United Kingdom.

Findings

Malaysia, Indonesia, and the United Kingdom are all on the top five countries in the Global Islamic Fintech (GIFT) Index. The list comprises countries that are most conducive to the growth of the Islamic Fintech market and ecosystem. However, weak supervision and low Sharia compliance are still becoming prominent challenges in the implementation of Islamic Fintech, while Sharia compliance is the core principle for Islamic finance regulation. Another finding is that a good ecosystem of Islamic Fintechs needs supportive regulations and policies, a Sharia Supervisory Board, and standards of Islamic Fintech Shariah governance.

Research limitations/implications

This study examines the regulation and supervision of Islamic Fintech in Indonesia, Malaysia, and the United Kingdom countries whose Islamic Fintech industry is growing rapidly.

Practical implications

This study is a strong reference for countries with potential Islamic finance, especially when they are constructing the Sharia compliance regulations to strengthen the regulation and supervision of the Islamic finance industries.

Social implications

Sharia compliance regulations can be a subsystem in the Islamic financial ecosystem to encourage Sharia economic growth in various countries.

Originality/value

To ensure Sharia compliance, it is recommended to take some steps: (a) creating the Sharia compliance regulations; (b) creating the Sharia supervisory boards; and (c) standardizing the Sharia governance of Islamic Fintech.

Details

Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 28 April 2020

Imran Mehboob Shaikh, Muhammad Asif Qureshi, Kamaruzaman Noordin, Junaid Mehboob Shaikh, Arman Khan and Muhammad Saeed Shahbaz

This paper aims to examine the determinants that influence bank users’ acceptance for Islamic financial technology (FinTech) services by extending the technology

2522

Abstract

Purpose

This paper aims to examine the determinants that influence bank users’ acceptance for Islamic financial technology (FinTech) services by extending the technology acceptance model (TAM) in the Malaysian context.

Design/methodology/approach

The survey was conducted using convenience sampling. Moreover, 205 responses were gathered from users of the Islamic bank. On the same note, the literature on determinants of Islamic FinTech acceptance and TAM was reviewed as well in a bid to contribute to the factors that are instrumental in determining the acceptance of FinTech services.

Findings

Findings of the study reveal that Islamic FinTech’s services acceptance is determined by perceived ease of use, perceived usefulness and also by another variable, which is consumer innovativeness (CI). On the contrary other factors, self-efficacy and subjective norms are found not to be influential in determining Islamic FinTech’s acceptance by Islamic banking users.

Originality/value

TAM is extended in the context of Islamic FinTech. A new variable, namely, CI is tested using TAM. CI is yet to be tested, therefore, this paper will be a useful reference for the policymakers, academicians and future researchers.

Details

foresight, vol. 22 no. 3
Type: Research Article
ISSN: 1463-6689

Keywords

Article
Publication date: 13 November 2019

Hasnan Baber

Using data from World Bank and Global Islamic Finance Report, this paper aims to compare the performance of countries following Islamic and conventional finance system in…

2192

Abstract

Purpose

Using data from World Bank and Global Islamic Finance Report, this paper aims to compare the performance of countries following Islamic and conventional finance system in terms of financial inclusion and FinTech.

Design/methodology/approach

Ten countries from both financial systems have been selected based on the presence of Islamic finance and conventional finance in the country. Data was analyzed from year 2011 to 2017 and keeping the former as base year to measure the change in the population fraction.

Findings

The findings found that Islamic finance countries are more inclusive in terms of financial inclusion and women are financially more empowered as compared to the counterpart. On the contrary, countries with conventional finance have a higher number of FinTech users.

Research limitations/implications

The difference between the performances of two systems in terms of financial inclusion is relatively small; therefore, future studies should incorporate more indicators for financial inclusion.

Originality/value

This study will be useful for understanding the nature of both financial systems, and the further research can be done to find the determinants of financial inclusion.

Details

Qualitative Research in Financial Markets, vol. 12 no. 1
Type: Research Article
ISSN: 1755-4179

Keywords

Article
Publication date: 2 September 2021

Saheed Abdullahi Busari and Sikiru Olanrewaju Aminu

This study aims to explore the opportunities and challenges in activating a Smart Contract to enhance the efficiency and effectiveness of Ṣukūk offerings in the Islamic

Abstract

Purpose

This study aims to explore the opportunities and challenges in activating a Smart Contract to enhance the efficiency and effectiveness of Ṣukūk offerings in the Islamic capital market.

Design/methodology/approach

The study adopts a mono-method qualitative approach. Data were obtained from survey interviews of two issuances on the fusion of smart contracts in Ṣukūk structures that were Sharīʿah-compliant. A thematic approach was further used to analyze the interview data based on the onion research method while opportunities and challenges of activating the Smart Ṣukūk (SṢ) relied on doctrinal evidence.

Findings

The results from the issuances across two jurisdictions showed that deployment of SṢ can resolve contractual ambiguities arising from Sharīʿah interpretations, jurisdictional policies and legal regime issues, which affect Ṣukūk origination and issuances especially on the right of investors in the event of Ṣukūk defaults. Although SṢ is automated, the third party’s presence is not eliminated as the blockchain platform still relies on the validators who are usually blockchain developers functioning as a third party in the Ṣukūk chain.

Research limitations/implications

The study relies on doctrinal literature to explain the features and requirements of SṢ. The empirical approach is limited to interview data based on local SṢ issuances. Future studies need to explore regulators’ role and global standards in cross-border issuance of SṢ with multiple jurisdictions/laws.

Practical implications

The paper concludes that the offering of SṢ using local currency has been successful in the two issuances because of the facilitative regulatory environment. However, addressing Ṣukūk’s challenges in cross-border offerings would require guidance from international standard-setters such as the Accounting and Auditing Organization for Islamic Financial Institutions and the Islamic Financial Services Board.

Originality/value

This study is an advanced application of smart contracts to alleviate the related Ṣukūk challenges in the Islamic capital market.

Details

Journal of Islamic Accounting and Business Research, vol. 13 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 18 October 2021

Yudho Taruno Muryanto, Dona Budi Kharisma and Anjar Sri Ciptorukmi Nugraheni

This paper aims to explore the prospects and the challenges of Islamic fintech in Indonesia. This study also proposes a comprehensive legal framework to encourage and…

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Abstract

Purpose

This paper aims to explore the prospects and the challenges of Islamic fintech in Indonesia. This study also proposes a comprehensive legal framework to encourage and accelerate the growth of the Islamic economy.

Design/methodology/approach

This study is the result of legal research with a statute approach and conceptual approach. The types of data used are legal materials consisting of primary legal materials and secondary legal materials. The technique of collecting legal materials is done by using library research techniques. The legal materials were analyzed using the legal norm method.

Findings

Indonesia is a country with the largest Muslim population in the world. However, the market size of Indonesia’s Islamic fintech is still below Saudi Arabia, Iran, United Arab Emirates (UAE) and Malaysia. Saudi Arabia’s Islamic fintech is the biggest market in the world, with $17.9bn worth of transactions in 2020 while Iran is at $9.2bn, UAE $3.7bn, Malaysia $3.0bn and Indonesia $2.9bn. This condition was due to various challenges in the Islamic fintech industry in Indonesia, including inadequate regulations; complicated permit procedures; misuse of fintech for financing terrorism; rampant occurrence of illegal fintech businesses; and consumer disputes in the fintech sector. These challenges require the construction of a comprehensive legal framework through the formation of an Act on Fintech.

Research limitations/implications

The focus of this research was limited to the problems occurring in the Islamic fintech sector in Indonesia as a country with the largest Muslim population in the world.

Practical implications

The results of this research can be used as recommendations for the formulation of comprehensive policies for the growth and development of Islamic fintech.

Social implications

Islamic fintech requires a comprehensive legal framework that functions to encourage the development of the Islamic fintech industry, digital economy growth and legal mitigation of various legal risks and misuse of fintech for financial crime and financing terrorism.

Originality/value

This paper proposes an original idea of creating a legal framework in a form of the Islamic Fintech Act. The Act should cover such legal substances as follows: Islamic compliance; an integrated one-stop permit procedure; division of authority, coordination and synergy among authorities; prevention and resolution of digital financial system crisis; criminal sanctions; and consumer dispute resolution mechanisms and alternative institution for fintech consumer dispute resolution.

Details

International Journal of Law and Management, vol. 64 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

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