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This chapter provides a case study on a Sharīʿah-compliant home facility contract based on the Bai Bithaman Ājil (BBA) contract, generally used by Islamic banks in Malaysia. The study emphasises on the need to comply with the existing legal framework and execute relevant contracts in line with the Sharīʿah resolutions of the Sharīʿah Advisory Council of Bank Negara Malaysia without causing harm (ḍarar) to the customers or introducing uncertain elements or procedures (gharar) in the execution of the agreements. This chapter is based on doctrinal analysis of the relevant issues as well as a qualitative legal research through content analysis of relevant BBA agreements, case law as well as statutory provisions. The case study used in this chapter is completely anonymised. The study finds that the execution of BBA agreements in Malaysia leaves much to be desired. Even though the regulatory framework for Sharīʿah-compliant home financing in Malaysia is robust, there are some legal and Sharīʿah considerations which the stakeholders need to look into in order to project Malaysia as the main global hub of Islamic finance. This study demonstrates the need for proper Sharīʿah auditing of the practical execution of BBA agreements to avoid an incorporated element of gharar at the time of execution of the agreements, which might ultimately lead to unforeseen reputation risks for the bank. Though there are several studies on the Sharīʿah, financing and accounting aspects of the BBA home facility agreement, this study focusses on both Sharīʿah and legal issues, using the case study approach. The recommendations are expected to provide a good policy framework for the stakeholders in the Islamic financial services industry in Malaysia.

The global Islamic financial landscape is changing with rapid advances in technology. The increasingly tech-savvy demography is presenting both opportunities and challenges to the industry. With the advances in e-finance and mobile technologies, financial technology (Fintech) innovations emerged by combining the e-finance, Internet, social networking services, social media, artificial intelligence (AI) and big data analytics. Fintech promises to reshape the Islamic financial landscape by improving processes’ efficiencies, cost-effectiveness, increased distribution, Sharīʿah compliance and financial inclusion. As far as the Islamic fund management industry is concerned, AI seems to be the keyword. Islamic fund managers have recently started to incorporate AI and big data analytics into their strategy in the process of making accurate decisions based on facts and figures, which eliminates any biases and personal intuition. This disruption in status quo is raising new issues, new concerns and new exciting opportunities. While disruption may carry negative connotations, the industry players have been embracing the innovation and potential revolution the technology could offer. Thus, the objective of this chapter is to discuss legal aspects of Fintech and its impact on the Islamic fund management industry in Malaysia. This chapter introduces a historical overview of Fintech and its evolution in the Islamic fund management industry. This chapter further provides an overview of the legal and regulatory aspects of Fintech with regards to the industry. Finally, legal issues and challenges are identified and discussed. Being a legal research, this chapter adopts a qualitative method by analysing the relevant literatures on the subject. This chapter is expected to provide an insight into the application of Fintech and its impact on the Islamic fund management industry in Malaysia.

The worldwide trend of Financial Technology (Fintech) reached the Malaysian shores in the past few years, making the observations and analysis of this subject more critical than ever. Furthermore, Fintech has developed to be an unavoidable area in the Islamic finance industry. Therefore, this chapter seeks to analyse the development of Fintech in the Islamic finance industry and its connection to Islamic economics, as well as the impact towards existing regulatory mechanisms. While the scarcity of studies on this area is apparent, the authors have identified the undebatable need to regulate the development of the Fintech industry and its effects while analysing the drawbacks and positive effects of Fintech towards parties involved in the Islamic finance industry. This chapter objectively studies the phenomenon of Islamic Fintech globally with emphasis on Malaysia through analytical research methods by utilising existing facts and findings on Fintech to make proposals for possible issues identified. Existing legal frameworks are studied and scrutinised to determine whether they can accommodate the rapidly evolving Fintech. The new Regulatory Sandbox by Malaysia’s central bank and existing laws are also examined. It is found that there is a room for improvement to the current regulatory framework.