FinTech in Islamic Financial Institutions: Scope, Challenges, and Implications in Islamic Finance

✍ Scribed by M. Kabir Hassan (editor), Mustafa Raza Rabbani (editor), Mamunur Rashid (editor)

• Publisher: Palgrave Macmillan
• Year: 2022
• Tongue: English
• Leaves: 381
• Edition: 1st ed. 2022
• Category: Library

✦ Synopsis

https://link.springer.com/book/10.1007/978-3-031-14941-2

This book explores several challenges facing FinTech in Islamic financial institutions. Firstly, large banks and financial institutions in countries with updated and innovative technological channels will earn the technology arbitrage from FinTech. This ‘size’ puzzle may create a challenge for Islamic financial institutions that are of smaller size and from technologically less-developed countries. Secondly, while access to FinTech is getting broader day by day, usage of FinTech is still limited due to personal and governance-related limitations. Moreover, the level of awareness of the emerging FinTech services (i.e., bitcoin, blockchain, etc.) remains extremely poor even among the residents of technologically-advanced countries. Thirdly, use of FinTech by Islamic financial institutions is limited to Islamic banking, to users from developed countries, among young customers, and for a limited number of traditional banking services such as the deposits and payment services. Also, banks hope to use FinTech to increase the size of a new breed of technology-savvy depositors and loan customers to achieve economies of scale, which may help stabilize the banking sector. Automation in Islamic banks and the participation of Islamic financial institutions in blockchain and bitcoin domains require extensive research from Shariah-compliance as well as market and consumer-related grounds. With all the opportunities and challenges of FinTech―promoting inclusion, easier loan monitoring, and risk of Shariah non-compliance―this book explores the implications for Islamic financial institutions and will be of interest to scholars, researchers, and students of Islamic finance and financial technology.

✦ Table of Contents

Foreword
Preface
Introduction
This Issue
Summary and Way Forward
Contents
Notes on Contributors
List of Figures
List of Tables
Introduction to Islamic Fintech: A Challenge or an Opportunity?
1 Introduction
Islamic Finance
Fintech and Its Theoretical Basis
Growth of Fintech
Fintech Entrepreneurship: Benefits and Challenges
2 Islamic Finance
Prohibitions
Promotion
3 Point of Convergence Between Fintech and Islamic Finance
Major Attractions of Fintech
Islamic Finance and Fintech
4 Challenges
Shariah Non-Compliance
Public Perception of Islamic Finance
Talent Gap
Unfavorable Regulatory Environment
Cyber Security
Competing Against Modern Innovations and Technological Advancement
5 Opportunities
New Startup
Financial Inclusion
Financial Fraud Detection and Security
Diversity
Partnership and Collaborations
6 Conclusion
References
Fintech and the Art of Disruption
1 Introduction
History of Fintech
Fintech 1.0 (1866–1967)
Fintech 2.0 (1967–2008)
Fintech 3.0 (2008–present)
Definition of Fintech and Financial Disruption
Payment Apps, Lending Platforms, and Investment Apps
Popular Types of Fintech Used By Consumers
Mobile Payment Services
Lending Platforms
Lending Tree
Better
Investment Apps
2 Cryptocurrency
3 Benefits and Risks to Consumers
Benefits
Low Cost
Improved Compliance and Security
High Speed and Convenience
Stimulus Payments to Consumers
Direct Cash Payments
Helping Small and Medium Enterprises (SMEs)
Financing Became More Obtainable
4 Regulation
5 Conclusion
References
A Fintech-Based Zakat Model Using Artificial Intelligence
1 Introduction
2 Poverty and COVID-19
3 Impact of COVID-19 on Poor and Vulnerable Section of the Society
Impact on Wage Income
Impact on Consumption
Disruption in Services
4 Maqasid Al-Sharia and the Economic Potential of Zakat in Helping the Poor During Pandemic
5 AI Based Islamic Fintech Model for Zakat
6 Conclusion
References
Islamic Fintech and Bahrain: An Opportunity for Global Financial Services
1 Introduction
2 Gaps and Opportunities in Global Islamic Fintech
3 New Regulations by Bahrain’s Central Bank
4 Emerging Technologies in the Kingdom of Bahrain
Forms of Emerging Technologies in Bahrain
Developing Bahrain’s Tech Ecosystem
Technology in the Financial Sector (Fintech)
Accelerator for Startups
Open Banking
In the Era of IoT (Internet of Things)
Technology Based on Blockchains
Analytical Techniques
Suggest a Data Set
Cloud Computing
Innovation Center at the University of Bahrain
Pay with an eWallet
Know Your Customer (KYC) Electronically
Machine Learning, or Artificial Intelligence (AI)
Introducing Robotics
Oil & Gas 4th Industrial Revolution
Smart Cities
Fourth Industrial Revolution Education
5 Gaps and Opportunities in Bahrain Islamic Fintech
A Leading Knowledge Hub
An Expanding Takaful Industry
Regional Leader in Islamic Finance
Promoting Innovation in Government
Setting up a Successful Platform
Future-Oriented Governmental Policy
Legal Sandbox
Crowdfunding Initiatives
Establishing a Local Test Market of Exceptional Quality
6 Conclusion
References
The Future of Finance and Fintech: Visualizing the Opportunities for Fintech in the MENA Region
1 Introduction
2 Participants of Fintech Ecosystem
3 Fintech Ecosystem Design
Marketing Environment
Governance Support
Financial Accessibility
Financial Know-How
4 Emerging Role of MENA in Investment Fund
5 Fintech Investment in MENA Region
Investment in Fintech
Relationship Banking
Increase in Cloud Banking
Embedded Finance
6 Fintech Startups Distribution Among MENA Countries
7 Conclusion
References
Fintech Trends: Industry 4.0, Islamic Fintech, and Its Digital Transformation
1 Introduction
2 Review of Literature
Fintech
Industry 4.0
Islamic Fintech
3 Discussion
4 Conclusion
References
An Insight into the Fintech and Islamic Finance Literature: A Bibliometric and Visual Analysis
1 Introduction
2 Methodology
3 Data Analysis and Visualisation
Most Influential Author
Most Important Documents
Influential Journals
Country and Affiliations
Co-Citation Analysis
4 Keyword Co-Occurrence Analysis
Bibliographic Coupling of Documents
5 Future Expansion
6 Conclusion
References
Fintech Innovation and Its Application in Islamic Banking from Pakistan
1 Introduction
2 Literature Review
Application of Fintech Innovations in the Islamic Banking Industry
Islamic Finance and Adoption of Fintech Solutions
3 Methodology
4 Results and Discussion
Additional Analysis
5 Conclusion
References
Fintech in the Islamic Banking Sector and Its Impact on the Stakeholders in the Wake of COVID-19
1 Introduction
2 Islamic Fintech and Its Application in Islamic Banking Industry
3 Islamic Fintech and Its Impact on Banking Stakeholders Following COVID-19
4 Conclusion
References
Fintech and Islamic Financial Institutions: Applications and Challenges
1 Introduction and Theoretical Background
2 Growth of Fintech
History
Users’ Perception: EY Fintech Global Adoption Index (2019)
Fintech Unicorns
Islamic Fintech Worldwide
3 Applications of Fintech in Islamic Finance
Payments and Remittances
Deposits and Lending
Challenger Banking
Open Banking
Unbanked/Under-Banked Facilities
Alternative Finance
Digital Wallets: Most Common Fintech Product
Asset Management and Robo-Advisory
Smart Sukuk
InsureTech and TakaTech
4 Fintech and Islamic Finance: Complementary or Competitive
5 Conclusion
References
An Assessment of Level of Adoption of Fintech in Islamic Banks in the MENA Region
1 Introduction
2 The Rise of Financial Technology (Fintech)
3 Imperatives of Fintech Technologies to Islamic Finance
4 Overview of Fintech in Islamic Financial Institutions in Middle East and North Africa (MENA) Region
Financial Inclusion
Islamic Social Finance
Improve Regulations and Promote Transparency
5 Fintech in Islamic Financial Institutions and Banking Industry in MENA Region
6 Conclusion
References
Fintech, Pandemic, and the Islamic Financial System: Innovative Financial Services and Its Shariah Compliance
1 Introduction
2 The Role of FinTech in Islamic Finance
3 Fintech and Bitcoin
Fintech and Blockchain (BC)
4 Fintech-Based Islamic Financial Services
Payments Industry
P2P Lending and Crowdfunding
Neo-Banking
Asset Under Management
InsurTech
5 Blockchain
Cloud Computing
Big Data Analysis
Robo-Advisors (RA)
Artificial Intelligence
6 Conclusion
References
An Islamic Finance Perspective of Crowdfunding and Peer-To-Peer (P2P) Lending
1 Introduction
2 Crowdfunding and Peer-To-Peer Lending: An Overview
Crowdfunding
Peer-To-Peer (P2P) Lending
3 Challenges in Existing Islamic Crowdfunding and P2P Lending Platforms
4 Conclusion and Future Work
References
Islamic Finance and Cryptocurrency: A Systematic Review
1 Introduction
2 An Overview of the Literature on Cryptocurrency and Sharia Compliance
3 Discussion and Findings
Arguments Against Cryptocurrency
Excessive Uncertainty
Not Backed by the Real Assets
No Regulating Bodies
Safety and Security of the Investors
Misuse by the Anti-social Elements
Arguments in Favor of Cryptocurrency
It’s not Just Current and there is More to it
Blockchain Technology
Uncertainty and Gharar
Can Help in Fight Against Money Laundering
4 Conclusion
References
Islamic Fintech, Blockchain and Crowdfunding: Current Landscape and Path Forward
1 Introduction
2 Review of Literature
Fintech
Islamic Fintech
Blockchain
Crowdfunding
Discussion
3 Future Islamic Fintech-Based Financial Services
4 Conclusion
References
COVID-19 Challenges and the Role of Islamic Fintech
1 Introduction
2 The Rise of Fintech and Its Significance for Islamic Banking Through the Use of Blockchain Technology and Artificial Intelligence
Evolution of FinTech
Evolution of Islamic FinTech
Artificial Intelligence
3 Usefulness of Islamic FinTech in Overcoming the COVID-19 Shocks
4 Conclusion and Recommendations
References
Index