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11 – 20 of over 8000Hana Kharrat, Yousra Trichilli and Boujelbène Abbes
This paper aims to describe a new method for constructing the FintTech Index that measures the development of FinTech in the conventional and Islamic banking sectors in the Middle…
Abstract
Purpose
This paper aims to describe a new method for constructing the FintTech Index that measures the development of FinTech in the conventional and Islamic banking sectors in the Middle East and North Africa (MENA). It also tests the effect of this new proxy on the performance of conventional and Islamic banks in MENA countries.
Design/methodology/approach
Using data from Islamic and conventional banks in the MENA region between 2010 and 2020, the authors rely on Text Mining Technology with the help of AntConc, principal component and factor analysis. The study also uses the simultaneous equation model to test the interdependent relationship between FinTech and bank performance.
Findings
The study argues that the proposed measure effectively represents the FinTech industry in the MENA financial markets. The results provide micro evidence on the application of FinTech innovation in Islamic and conventional banks to improve their performance, profitability, stability and efficiency. Furthermore, the findings can provide insights for practitioners and researchers interested in implementing FinTech collaboration to enhance the performance of Islamic and conventional banks in the MENA region.
Practical implications
Investors can leverage this FinTech Index in portfolio investments, trading strategy and hedging in MENA countries. In addition, policymakers can benefit from the challenges outlined in this work to support the development and incubation of FinTech in conventional and Islamic banks. Thus, they can better recognize the new generation of banking services with which they need to deal and collaborate.
Originality/value
This paper makes a methodological contribution to the literature on FinTech search patterns by combining factor analysis with corpus processing software. This is the most comprehensive global FinTech index. In addition, to the best of the authors’ knowledge, this study is the first to examine the simultaneous relationship between the FinTech index and the performance of Islamic and conventional banks.
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This paper aims to delve into the factors influencing the adoption of Islamic Fintech and investigates the potential impact of Religious Orientation.
Abstract
Purpose
This paper aims to delve into the factors influencing the adoption of Islamic Fintech and investigates the potential impact of Religious Orientation.
Design/methodology/approach
The study uses a questionnaire to collect data from 291 Jordanians, using Structural Equation Model – Partial Least Squares (SEM-PLS) to evaluate the research model and test hypotheses.
Findings
The outcomes of the Smart PLS path analysis revealed that several factors significantly influence the adoption of Islamic Fintech. Notably, perceived risk, financial literacy, trust and convenience were identified as pivotal determinants in shaping individuals' decisions to adopt Islamic Fintech. Additionally, the study unveils the noteworthy role of religious orientation as a moderator, impacting the relationship between perceived risk, financial literacy, trust and convenience concerning the adoption of Islamic Fintech.
Originality/value
This study contributes fresh insights to the existing literature concerning the adoption of Islamic Fintech, enhancing the understanding of the key drivers in this domain. Furthermore, it emphasizes the practical implications of religious orientation in shaping individuals' attitudes and behaviors pertaining to Islamic Fintech adoption.
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Syed Alamdar Ali Shah, Bayu Arie Fianto, Asad Ejaz Sheikh, Raditya Sukmana, Umar Nawaz Kayani and Abdul Rahim Bin Ridzuan
The purpose of this study aims to examine the effect of fintech on pre- and post-financing credit risks faced by the Islamic banks.
Abstract
Purpose
The purpose of this study aims to examine the effect of fintech on pre- and post-financing credit risks faced by the Islamic banks.
Design/methodology/approach
This research uses primary data for fintech awareness and adoption and secondary data of various financial and economic variables from 2009 to 2021. It uses baseline regression to identify moderation of fintech controlling gross domestic products, size, return on assets and leverage. The findings are confirmed using robustness against key variable bias. It also uses a dynamic panel two-stage generalized method of moments for endogeneity.
Findings
The study finds that the fintech awareness and adoption are not the same across all Islamic countries. The Asia Pacific region is far ahead of the other two regions where Indonesia is ahead in terms of fintech awareness and adoption, and Malaysia is ahead in terms of reaping its benefits in credit risk management. Fintech affects prefinancing credit risk significantly more than postfinancing credit risk. Also, the study finds that Islamic banks suffer from the problem of “Adverse selection under Shariah compliance.”
Practical implications
This research invites regulators to introduce fintech in Islamic banks on war footing. Similar studies can be conducted on the role of other risks such as operational and market risks. Fintech will also help in improving the risk profile and stability of Islamic banks against systemic risks and financial crises.
Originality/value
This research has variety of originalities. First, it is the pioneering study that addresses the effect of fintech pre- and post-financing credit risks in Islamic banks. Second, it identifies “Adverse selection under Shariah compliance” for Islamic banks. Third, it helps identify how fintech can be useful in reducing credit risk that will help in reducing capital charge for regulatory capital.
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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.
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Ana Irimia-Diéguez, Gema Albort-Morant, Maria Dolores Oliver-Alfonso and Shakir Ullah
This study aims to identify the factors that could explain the intention to use Paytech services within an Islamic banking context. The authors use an extended version of the…
Abstract
Purpose
This study aims to identify the factors that could explain the intention to use Paytech services within an Islamic banking context. The authors use an extended version of the technology acceptance model to develop a causal–predictive analysis.
Design/methodology/approach
The research model and hypotheses were tested by applying partial least square-structured equation modeling to data collected from 214 users of Islamic banking in Saudi Arabia.
Findings
The results show that perceived trust has a highly significant direct effect on the intention to use Islamic Paytech services, whereas perceived risk has a significant indirect effect on IU.
Research limitations/implications
Internet banking behavior may not be static. In technology acceptance, during the various phases from introduction to the maturity phase, the respondent’s perceptions tend to change
Practical implications
From the point of view of Fintech services providers, the knowledge of the factors fostering the adoption of Fintech services would allow an international expansion without the inconvenience of establishing offices or companies in countries whose legislation does not favor the operations carried out by Islamic banks.
Social implications
These digital payment services would allow access to financial services to the entire Muslim population regardless of their location (Islamic and non-Islamic nations) and will also reach out to the next generation of young Muslims as a majority are “digital natives” ready for digital Islamic financial solutions.
Originality/value
This study is the first to explore the intention to use Paytech services by Islamic banking users in Saudi Arabia. From a theoretical perspective, this work contributes to the academic literature by analyzing the intention to use Paytech services in an Islamic banking context. On the practical front, the study identifies the crucial factors that industry players can use to design their Paytech applications and services to increase financial inclusion in Saudi Arabia and other countries with similar cultures as well as to design an international expansion without the inconvenience of establishing offices or companies in countries whose legislation does not favor the operations carried out by Islamic banks.
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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 examines the…
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.
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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 acceptance model…
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.
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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…
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.
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M. Kabir Hassan and Mustafa Raza Rabbani
The purpose of this study is to investigate the role of Auditing and Accounting Organization for Islamic Financial Institution (AOIFI) governance disclosure on the performance of…
Abstract
Purpose
The purpose of this study is to investigate the role of Auditing and Accounting Organization for Islamic Financial Institution (AOIFI) governance disclosure on the performance of Islamic financial institutions (IFIs) through systematic literature review approach.
Design/methodology/approach
This study is based on the review of literature related to the AAOIFI accounting standards downloaded from Scopus database. This study includes review of 126 research articles, 10 review papers, 9 book chapters and 5 conference papers related to different roles played by AAOIFI in providing standards for accounting, auditing, governance and ethics for global IFIs.
Findings
The findings of this study suggest that AAOIFI has played a critical role in developing the accounting standards for the IFIs and contributed positively to the overall growth of the Islamic finance industry.
Practical implications
AAOIFI has played a critical role in issuing and development of accounting and auditing standards and has contributed positively to the financial performance of IFIs. Research gaps are identified, and there is a need to work on these gaps.
Originality/value
This study will contribute to the understanding the role of AAOIFI in issuing and development of accounting and governance standards and future research agenda based on a thorough review of literature.
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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.
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