2. perspective, the literature is growing at a fast pace, so do various types of
reviews (Al-Sartawi et al., 2022; Li and Xu, 2021; Sangwan et al., 2020;
Suryono et al., 2020; Utami et al., 2021), in contrast from Islamic
perspective the pace is much slower, which motivated us to conduct this
study, as few reviews tried to catch up the progress including
non-directly related topics e.g (Rabbani et al., 2020). Our study is more
comprehensive in nature and scope as it focuses on reviewing all relevant
and published articles tackling compliant innovative technological ap-
plications concentrating on Islamic financial institutions.
This study makes several contributions to the existing literature. (1) It
is the first study to illustrate the basic characteristics of publications in
the Islamic FinTech domain, including the annual progress, the most
influential articles, and keywords co-occurrence, beside the development
of the research streams over the years. (2) Further, the study does a
comprehensive overview of the research publications in Islamic FinTech
and each category under it. (3) The study adopts a hybrid method
combining bibliometric methods and content analysis to review 85
studies from 2017–2022 (4) Finally, it provides an overview of the cur-
rent special environment of Islamic FinTech and the challenges faced by
besides providing suggested future research directions.
The remainder of this paper is organized as follows. Section 2 in-
troduces the data collection and research methodology. Section 3 pre-
sents the bibliometric results. Section 4 presents the content analysis. We
conclude the paper in section 5.
2. Review methodology
2.1. Methodology and study framework
The study uses various methods such as bibliometric analysis, content
analysis and SLR to provide a Quanti-qualitative perspective of Islamic
FinTech research development. Bibliometric is a quantitative analysis
that enables the researchers to discover the emerging trend of collabo-
ration networks and identify the intellectual structure of a certain field of
study (Liu et al., 2020; Donthu et al., 2021). This method is useful for
mapping the Islamic FinTech research based on statistical analysis.
Moreover, this study uses content analysis and SLR as it allows the
researcher to categorize the literature, analyze the gaps in existing
studies, and offer recommendations for the research topic (Paul and
Criado, 2020). The SLR used is based explicitly on the Preferred
Reporting Items for Systematic reviews and Meta-Analyses (PRISMA), a
well-suited method to synthesize the research finding from the most
impactful selected studies in this research field. We follow the PRISMA
guideline proposed by Moher et al. (2009) who divided PRISMA into four
main steps: identification, screening, eligibility assessment, and identi-
fication of the findings. This method assure transparency on how the data
is collected and the final number of papers included for review. We
employ RStudio software to achieve the following research objectives
(RO1.1 and RO1.2), whereas (RO1.3 and RO2) are addressed using
VOSviewer software. Following are the outlined objectives:
RO1. To evaluate the current publication trend of Islamic FinTech.
as answers to RO1 are rather quantitative in nature, hence, further
sub objectives are categorized as follow:
RO1.1. To present the performance of publication and citation
annually.
RO1.2. To identify the most influential studies based on the number
of citations.
RO1.3. To investigate the collaboration network globally.
RO2. To identify the main research themes from existing studies on
Islamic FinTech.
RO3. To analyze the primary result and limitations of the selected
studies.
RO4. To detect research gaps and provide recommendations for future
research.
2.2. Data source and collection
This study curated the data from the Scopus database, a well-known
and comprehensive database covering various social disciplines
including business and finance fields (Guckenbiehl et al., 2021). Alshater
et al. (2020) state that the Scopus database contains a greater number of
Islamic finance research than other databases such as Web of Science,
while it also indexes more well-validated studies than those solely
appearing on Google Scholar, EBSCO, or ProQuest. Moreover, several
previous review studies on Islamic economics, banking, and finance,
primarily relied on Scopus e. g Paltrinieri et al. (2020), M. K. Hassan,
Aliyu, et al. (2020), and Foglie and Panetta (2020). Figure 1 shows data
collection steps for bibliometrics and SLR with PRISMA. The biblio-
metrics analysis is used in this study to answer the RO1 and RO2,
whereas SLR-PRISMA is adopted to address the RO3 and RO4.
The first step of collecting the data is the identification of keywords
for the data curation process. The vast development of Islamic FinTech
literature which spans through multiple disciplines, including technology
and religion, resulted in challenges in identifying the right keywords. As
Lee and Shin (2018) described, there are six business models of FinTech,
including lending, capital market, insurance services, wealth manage-
ment, payment, and crowdfunding. In detail, Laidroo et al. (2021)
identified seven activities of FinTech, including, (1) Payment activity
refers to the online and mobile payment model; (2) Deposit and lending
activity which covers the crowdfunding model, peer-to-peer lending,
microlending, and consumer financing model; (3) Investment manage-
ment activity which covers Robo-advice, social trading, and automated
advice model; (4) Distributed ledger technology activity which covers
digital currency and blockchain model; (5) Banking infrastructure ac-
tivity covering user interface and open banking model; (6) Analytics
activity; and (7) Insurance.
Given the consideration of previous explanation, the selected key-
words in this study were identified by conducting a pre-simulation to
assure that the keywords cover most of the existing studies related to
Islamic FinTech. Moreover, the selection of keywords also referred to
previous scientometric research by various researchers who tried to
cluster the knowledge in this area, for example, Liu et al. (2020), sug-
gested including the words P2P, crowdfunding, blockchain, crypto-
currency, robo-advisors, and mobile payment, as they are related to
FinTech business model.
Guided by the previous literature, therefore, the study applied several
important search keywords including, “Fintech” OR “Financial Tech-
nologies” OR “Financial Technology” “finance technology” OR “Islamic
Fintech” OR “Blockchain” OR “Digital Finance” OR “P2P” OR “P2P
Lending’ OR “Credit Scoring” OR “Robo Advisor” OR “Insurenctech” OR
“Smart Contract*” OR “Bitcoin” OR “Crowdfunding” OR “Crypto* OR
“Financial Inclusion” in the Article Title, Abstract, Keyword. These key-
words were further combined with another set of keywords, namely.
“Islam*” OR “Shariah” OR “Shari'ah” to represent Islamic FinTech. In
result, at the first stage of data curation, we obtain 265 documents.
Moreover, as this study strive to investigate the existing studies on Fin-
Tech within the Islamic view, we conducted another data search using
“Financial Inclusion” in the Article Title, Abstract, Keyword, followed by
two search field by using “Islam*” OR “Shariah” OR “Shari'ah”, AND
followed by “fintech” OR “finance technology” OR “financial technologies”
OR “digital finance” in the Article Title, Abstract, Keyword, to collect
related articles. Thus, at the second stage of data curation, we obtained
11 documents. The data of this study retrieved the data from the Scopus
database in February 2022 and resulted in 276 documents.
The second step is data screening. The selected articles from the
previous step are filtered based on specific criteria described in Figure 1.
Hence, 159 out of 276 documents were excluded as it does not satisfy our
M.M. Alshater et al. Heliyon 8 (2022) e10385
2
3. screening criteria; this step leaves 117 potentially relevant studies. Pre-
vious SLR studies on Islamic banking and finance, such as Narayan and
Phan (2019), Khan et al. (2020), and Foglie and Panetta (2020) sug-
gested only including the articles published by highly ranked
peer-reviewed journals, measured by an A and A* rank indexed by ABDC
journal list or two star and above on the ABS list however, due to the
limited number of articles in Islamic FinTech published in these outlets,
this study relied only on the Scopus database for selecting documents.
The third step is reviewing the articles to satisfy the eligibility of
inclusion in the review, by reviewing the full text of the paper. The cri-
terion in this step refers to the article's content where we followed
Lundberg et al. (2006) in hiding the article's identity suggestion,
including journals and authors' names, to avoid subjectivity in manual
refinement, also using the following inclusion criterion: (1) Studies
related to Islamic FinTech; (2) Studies discussing the role and impact of
Islamic FinTech in business, Islamic economics, philanthropy, banking,
stock market, and halal industry; and (3) Studies investigate one of the
business models of Islamic FinTech. While the exclusion criterion is: (1)
Studies discuss other topics as the study's objectives, while Islamic Fin-
Tech has a small part of the study; and (2) Studies that did not offer
substantial insights into Islamic FinTech. The full-text analysis has
excluded 32 articles from 117, leaving 85 articles for the final evaluation.
The final step is categorizing and summarizing literature findings. In
this step, we extracted the substantial findings of previous studies and
presented them in tables and discuss them. Moreover, we analyze the
research gaps, limitations, and identify the direction for future research,
for early career researches in fintech and Islamic fintech.
3. Results
The Statistical analysis of Islamic FinTech publications is measured
using bibliometrics analysis to answer RO1 and RO2. Publication trend is
frequently used to present the current development of a discipline and
scientific output (Liu et al., 2020). The general performance analysis is
presented to address RO1, whereas RO2 is answered by utilizing
co-occurrence author keyword and co-word analysis on the article's title
and abstract.
3.1. General performance
3.1.1. Analysis of the overall growth trend
This section explains the data utilized in this study. According to our
dataset, the first publication related to Islamic FinTech was in 2017.
Since then, 85 articles have been published by 52 journals. Moreover,
205 authors have worked on FinTech related articles, out of whom 10
have worked independently, while the rest have collaborated in con-
ducting the research. The collaboration index is relatively high at 2.83
points. Hence, the high percentage of multi-authored documents and
collaboration index is associated with the interdisciplinary nature of Is-
lamic FinTech with other disciplines such as business and economics,
finance, law, shariah, and information technology.
Figure 2 reflects the yearly trend of Islamic FinTech publications and
citations between 2017 to 2022. In terms of citation performance, the
trend remained stagnant during 2017–2019, the 85 articles on Islamic
FinTech have been cited 332 times. In sum, this study expects that the
total publication and citation of Islamic FinTech would significantly in-
crease in the next five years given the increasingly moving average trend
and the massive escalation of Islamic FinTech in terms of asset and
performance.
3.1.2. Analysis of the influential articles
Table 1 present the most cited articles based on the criteria of a
minimum of ten citations from the Scopus database. This current study
measured the impact of the articles based on global citation. Global ci-
tations assess the performance of an article based on the total citations
from a variety of disciplines and articles (Agbo et al., 2021). According to
Table 1, the article authored by Mensi et al. (2020) has the highest ci-
tations among the articles published by Scopus indexed journals. This
study examines the relationship between bitcoin, the Islamic stock
market, and Sukuk.
Records identified from
Scopus Databases on
February 2022: n = 276
Records removed before screening;
without set time limit for
publication: n = 0
Records screened based on
inclusion criteria: n = 276
Records excluded: n = 159
The inclusion criteria:
1. Subject area: Business,
Management and Accounting;
Economics, Econometrics and
Finance; Social sciences; and
Decision sciences.
2. Document type: article
review
3. Source type: Journals
4. Language: English
Full-text articles assessed for
eligibility: n = 117
Full-text articles excluded with
reasons: n = 32
Studies included in review: n =
85
Identification
Included
Screening
Eligibility
Keywords identification; 2 stage of search fields
within “Article title, Abstract, Keywords”
Figure 1. Prisma flow diagram showing article selection process.
M.M. Alshater et al. Heliyon 8 (2022) e10385
3
4. 3.1.3. Analysis of the collaboration network
Paltrinieri et al. (2020) stated that identifying the co-authorship
analysis will help researchers build their research collaboration and
result in higher quality papers. It offers a broad and cross-countries
perspective. The distance between nodes represents the linkage be-
tween the countries, and the smaller distance indicates the higher linkage
and the strong relationship between them (Van Eck and Waltman, 2014).
Figure 3 describes the research collaboration amongst countries on Is-
lamic FinTech with a minimum of one publication. It also illustrates that
the country's collaboration network was divided into five clusters.
Malaysia was cited as the centre of collaboration with the United States,
Indonesia, Bangladesh, Japan, and Finland's research partnership in the
green cluster. This result implies that these countries have published a
similar topic of discussion on Islamic FinTech. Furthermore, the short
distance nodes between Malaysia United Arab Emirates (UAE) (in the
cluster red) indicated that these countries tend to conduct joint research
partnerships. Malaysia and the United Kingdom are also present the
closer nodes. Thus, the collaboration network between these two coun-
tries is of relative strength.
Moreover, the red cluster consists of eight countries with similar topic
interests, namely, France, India, Oman, Palestine, Luxemburg, Russian
Federation, and UAE. Furthermore, Australia, China, Pakistan, South
Korea, the United Kingdom, and Vietnam were found in cluster blue.
These countries have a strong connection with Malaysia, Saudi Arabia,
and Italy as their research partners. Besides, in the yellow cluster, Can-
ada, Greece, Italy, Malta, and Morocco tend to have a common research
topic. Finally, Saudi Arabia, Kuwait, Tunisia, and Bahrain were found in
the purple cluster. In conclusion, research related to FinTech and the
Islamic finance industry has spread globally and attracted researchers
from various countries, including non-Muslim majority countries.
3.2. Research main theme
The most discussed topics in Islamic FinTech research are presented
using keyword co-occurrence analysis. The mapping analysis visualises
the most common topic based on the co-occurrences of keywords (Baker
et al., 2020). Figure 4. describes the keyword occurrence: author key-
words by setting the minimum occurrence of word is two times. Based on
the figure, this study confirms that there are four clusters. The most
frequently used keywords in the red cluster are FinTech, Islamic finance,
Islamic bank, financial inclusion, riba, and customer retention. At the
same time, the most widely used keywords are bitcoin, cryptocurrencies,
blockchain, gold, Malaysia, smart contract, and COVID-19 in the yellow
cluster. In the blue cluster: cryptocurrency, shariah compliance, trust,
precious metal, security, system and technology, and SEM become the
highly used keywords. Lastly, in the green cluster: Crowdfunding, Islamic
crowdfunding, Indonesia, TAM, and SME are the most appear keywords.
Based on the keyword's occurrence, the red cluster is related to the
adoption of FinTech in Islamic financial institutions while the yellow
cluster mainly examines the correlation between FinTech's products and
the Islamic stock market. The studies on the blue cluster cover the studies
related to the shariah compliance and customer's trust in FinTech. Lastly,
the green cluster analysis of the technology acceptance of FinTech in
SMEs.
This study also offers analysis of the trending topics over the years.
Van Eck and Waltman (2014) underlined that co-word analysis on the
article's title and abstract could be constructed and visualized to reveal
the research main theme clusters based on research topic similarities. The
darker nodes and links designate the past topics. By analysing the key-
words, as shown in Figure 5 studies related to the concept of financing
and payment in the Islamic FinTech platform are the oldest topics. While
the most recent topics on Islamic FinTech covers studies related to
financial inclusion, social implication, role, intention, benefit, and
COVID-19. Moreover, intention, ease, sample, factor, and determinant
also dominated the latest topic. Hence, it can be concluded that research
exploring the contribution of FinTech and the intention to adopt FinTech
in the Islamic finance industry has become a recently discussed topic.
4. Content analysis of Islamic FinTech publications
This section is divided into two sections. The first section addresses
the RO3 which categorize the literature into four distinct streams
namely: (1) Financial technology (consists of two sub-streams: Customer
perception on Islamic FinTech and Islamic FinTech's current develop-
ment and its impact on Islamic finance institutions); (2) Islamic FinTech
and distributed ledger technology (consist of two sub-streams: Crypto-
currency and Blockchain), (3) Financial inclusion; and (4) Islamic Fin-
Tech and deposit-lending (consist of two sub-streams: P2P Lending and
2 4 11
31 34
3
18 13
39
212
43
0
0
50
100
150
200
250
300
2017 2018 2019 2020 2021 2022
Total Document Total Citation
Figure 2. The number of growth and trend of published articles and cita-
tion 2017–2022.
Table 1. Top influential articles on islamic FinTech
Author Title GC
(Mensi et al., 2020) Does bitcoin co-move and share risk with Sukuk and world and regional Islamic stock markets? Evidence using a time-frequency approach 26
(Rabbani et al., 2020) FinTech, blockchain and Islamic finance: An extensive literature review 21
(Haider et al., 2020) An artificial intelligence and NLP based Islamic FinTech model combining zakat and Qardh-Al-Hasan for countering the adverse impact of
COVID 19 on SMEs and individuals
21
(M. K. Hassan, Rabbani,
et al., 2020)
Challenges for the Islamic Finance and banking in post COVID era and the role of Fintech 19
(Rosavina et al., 2019) P2P lending adoption by SMEs in Indonesia 17
(Rehman et al., 2020) Do Islamic indices provide diversification to bitcoin? A time-varying copulas and value at risk application 16
(Siswantoro et al., 2020) The requirements of cryptocurrency for money, an Islamic view 11
(Lahmiri and Bekiros, 2019) Decomposing the persistence structure of Islamic and green crypto-currencies with nonlinear stepwise filtering 10
(Abdullah and Oseni, 2017) Towards a shar
ı’ah compliant equity-based crowdfunding for the halal industry in Malaysia 10
Note: GC ¼ Global citation.
M.M. Alshater et al. Heliyon 8 (2022) e10385
4
5. Crowdfunding). The second section explains the research gap and future
research recommendations to answer the RO4.
4.1. Content analysis
4.1.1. Stream 1: financial technology
This stream consists of 20 articles that can be divided into two sub-
streams: Customer perception on Islamic FinTech, its current develop-
ment, and its impact on Islamic finance institutions.
The first sub-stream is related to customer perception. Most of the studies
measure customer perception of Islamic FinTech through customer
intention on using Islamic FinTech (Darmansyah et al., 2020; Oladapo
et al., 2021); customer's acceptance (I. M. Shaikh et al., 2020); customer's
satisfaction (Baber, 2019); customer's retention (Baber, 2020b, 2020c);
and customer's trust (M. Ali et al., 2021). FinTech in Islamic finance in-
stitutions provides four types of services: payments, crowdfunding,
advisory, financing, and compliance (Baber, 2020b). Several key factors
are affecting customers' intention to use Islamic FinTech based on pre-
vious studies:
First, shariah compliance. There is still debate amongst the scholars
and practitioners about whether religiosity drives the customers to use
Islamic banking, a study by Baber (2020b) and Marzuki and Nurdin
(2020) proved that Islamic banking customers have a strong concern
toward shariah-compliance of FinTech products. Moreover, Baber (2019)
correctly argues that shariah-compliance of FinTech services becomes a
crucial factor in customer satisfaction. Thus, to maintain the customer's
loyalty and satisfaction, the quality and performance of Islamic banking,
specifically mobile banking, should improve immensely. Hence, the re-
sults of these studies call attention to enhancing the roles of the shariah
supervisory board in ensuring the services meet Islamic principles.
Second, is the ease of use. An interesting study by Darmansyah et al.
(2020) concludes that the technology acceptance model becomes the
most significant factor influencing customers’ intention in using FinTech,
particularly in P2P services. In detail, I. M. Shaikh et al. (2020) ascer-
tained that perceived ease of use and usefulness play an important role in
shaping customer intention. In the same vein, Baber (2019) also argued
that apps design has massively increased customer satisfaction in using
Islamic FinTech. Besides, M. Ali et al. (2021) pointed out that the secure
Islamic FinTech apps and operations increase customer trust in accessing
Islamic FinTech. Hence, the key implication drawn from these studies is
the importance of user experience in using Islamic FinTech. Thus, Fin-
Tech providers should pay more attention to improving FinTech apps and
websites quality by considering the customer needs and prevailing
innovations.
Third, is customer knowledge. Oladapo et al. (2021) put forth that
customers' knowledge of Islamic FinTech is significantly related to the
increasing customer's intention to utilise FinTech. Moreover, the result is
also supported by Baber (2020c), who assured that providing adequate
information regarding Islamic principles will enhance the customer's
satisfaction. These studies clarify that banking practitioners and opera-
tors should regularly attend training, seminars, and conferences to
update their capacity to offer customers comprehensive knowledge
related to FinTech.
The second sub-stream addressed Islamic FinTech development and its
impact on Islamic finance institutions. Rabbani et al. (2020) conducted a
systematic literature review to synthesize Islamic fintech; they found that
three dominant topics have been widely discussed: Islamic FinTech op-
portunity and challenges, cryptocurrency/blockchain shariah compli-
ance, and the law/regulation aspect of fintech innovations. this study
underlined that FinTech offers more cost-effective financial services than
traditional finance and banking. Based on a country level Muryanto et al.
(2021) stated that Indonesia, as the largest Muslim population country,
has massive potential to elevate the economic growth by utilizing Islamic
FinTech. Moreover, this study also describes several challenges in Islamic
FinTech's development, including weak regulation, inefficient permit
procedures, and a higher rate of illegal FinTech practices. Another study
Almulla and Aljughaiman (2021) documented that the massive growth of
FinTech firms negatively affects conventional and Islamic banks' per-
formance, measured by the declining ROA and ROE rates. These studies'
findings illustrate the possibility of financial institutions shifting from
banking to FinTech firms, highlighting disruptive technology's negative
impact on traditional financial institutions.
On the other hand, numerous studies have investigated FinTech
practices adoption's impact on Islamic finance institutions' performance,
specifically Islamic banks and microfinance institutions. Mustafa Raza
Rabbani and Khan (2020) underlined that FinTech could significantly
decrease the operational cost of Islamic banking, which will allow it to
offer more competitive products. Moreover, Selim (2020) ascertained
that implementing FinTech in foreign currency transactions by Islamic
banks would increase their market share. In return, Islamic banking can
provide non-interest rate transactions in real-time and without riba.
Moreover, Altwijry et al. (2021) conducted an interesting discussion
regarding the shariah-based FinTech money creation. This study empha-
sized the validity and credibility of Islamic banking to adopt FinTech in
their services, answering a debate about whether Islamic banking is
necessarily creating money to support their business. This study un-
derlines that Islamic bank should fully enhance their ability to adapt
Shar
ıah-compliant FinTech.
Moreover, in the case of Islamic microfinance, S. A. Shaikh (2021)
explained that FinTech would enable Islamic microfinance to obtain a
broader range of fund providers, increase transparency, decline the
transaction cost, support the customer's monitoring process, and increase
the accuracy in screening criteria. However, research by X. Wang et al.
(2021) reported that the Islamic bank's investment in FinTech has not yet
been effective; this indicates that there are still areas that require
improvement. The result of this study is also supported by Nastiti and
Kasri (2019), who declared that the policy-maker should make a stren-
uous effort to establish a supportive investment environment for an Is-
lamic bank to adopt FinTech. In short, the adoption of FinTech will
elevate the development and efficiency of Islamic financial institutions,
which will lead to the improvement of Islamic finance institutions' role in
economic growth. Hence, a solid collaboration amongst the stakeholder
is crucial.
Despite the massive growth of Islamic FinTech, one of the biggest
obstacles in its way is the lack of specific legal law from policymakers.
Nurhasanah and Rahmatullah (2020) from Indonesia revealed that the
Islamic FinTech providers are still behind in terms of regulation, law, and
operational rules compared with their conventional counterparts. The
uncertainty of the legal law of Islamic FinTech has also resulted in the
weak security of customers' data and the increasing number of illegal
FinTech. Moreover, the ineffective role of shariah supervisors as regu-
lating authorities has also become the primary reason that hinders the
growth of FinTech's start-up (Ilyas et al., 2020; Tajudin et al., 2020). In
the Malaysian case, the government has set a specific target to digitalize
the financial industry, which breaks down to the liberation of specific
areas, including insurance, trading assistance, Robo-advisory, and P2P
lending. By analyzing the development of FinTech start-ups in Malaysia
Figure 3. Collaboration network map of countries.
M.M. Alshater et al. Heliyon 8 (2022) e10385
5
6. Table 2. Financial technology.
Paper Info Purpose Methodology Results Dropout
Customer Perception on Islamic FinTech
(Baber, 2020b) This paper investigates the impact of
FinTech applications and crowdfunding
on customer retention in Islamic
banking.
A quantitative approach
based on structured
questionnaires.
* Islamic FinTech provide four types of
services, namely, payments, advisory,
finance, and compliance.
* The finance application of FinTech does
not have a significant impact in forming
customer satisfaction.
* Crowdfunding services have massively
increased due to attracting start-up who
provide new ways of raising funds.
The empirical study sample is based on
Malaysia and the United Arab Emirates;
thus, the result of this study cannot be
generalized.
(Marzuki and
Nurdin, 2020)
This paper examines the influencing
factors of customers to use Islamic
FinTech services.
A quantitative approach
based on structured
questionnaires
* Shariah-compliant is the most important
factor in adopting Islamic FinTech.
* Social environment has less impact in
attracting the customer's intention to use
Islamic FinTech products.
This study was specifically conducted in
Indonesia. Thus, the suggestions might not
be applicable to other societies.
(Baber, 2019) This research assesses the correlation
between FinTech service quality
towards customer satisfaction in Islamic
banking.
A quantitative approach
based on questionnaires.
* Emphasized that shariah-compliant
services become one of the most critical
factors affecting customer satisfaction.
* FinTech app designs, reliability, and
fulfilment of transactions and promises
significantly impacted customer
satisfaction.
The result of this study cannot be
generalized since it is only utilized
Malaysian customers' data.
(M. Ali et al.,
2021)
This research aims to reveal the
influence factors of perceived benefits
and perceived risk on Islamic FinTech,
and what impact customers' trust and
intention to use Islamic FinTech.
Partial-least squares
structural equation
modeling (PLS-SEM) based
on questionnaires.
* Emphasized that economic benefit has
the strongest impact in shaping perceived
benefit for Islamic FinTech users.
* Legal risk has become the most
prominent factor that affects perceived
risk on Islamic FinTech.
* Islamic FinTech users are more
concerned about perceived risk compared
to perceived benefits.
* Trust in Islamic FinTech was negatively
affected by perceived risk and positively
impacted by perceived benefits.
* Trust has become the key important
factor influencing the intention to use
Islamic FinTech.
This study focused on perceived risk and
benefit. TPB and Technology Acceptance
Model (TAM) should be adopted to
investigate the customer intention in
FinTech.
(Darmansyah
et al., 2020)
This paper analyses the determinant
factors of behavioral intention in using
Islamic FinTech in Indonesia.
Structural Equation
Modelling (SEM) approach.
* The adoption of FinTech in Islamic
finance institutions should pay more
attention to non-financial benefits that
will obtain by the customers.
* Perceived ease of use, usefulness, and
social norm become the most prominent
factor forming behavioural intention to
use three types of Islamic FinTech
services: payment, crowdfunding, and
peer-to-peer lending (P2P).
This study covers only Indonesian users;
thus, the practical implication cannot be
generalized.
(I. M. Shaikh
et al., 2020)
This paper investigates the influencing
factors of Islamic FinTech acceptance in
Islamic banking.
SEM approach. * Customer innovativeness has become
the most crucial factor that facilitates
Islamic FinTech acceptance.
* Bank managers consider the customer's
perception of FinTech innovation by
involving them in product research and
development.
The respondents of this study are from
upper educational background, (under-
graduate and post-graduate levels). Thus,
the result cannot be generalized for
uneducated customers.
(Oladapo et al.,
2021)
This research investigates the
perception of Islamic bank customers in
Malaysia and Saudi Arabia regarding
the adoption of Islamic FinTech.
PLS-SEM based on
questionnaires.
* Knowledge, attitude, and social norms
become the most prominent factors
influencing Islamic FinTech.
* The determinant factors of customers'
perception are different between Malaysia
and Saudi Arabia.
* This study highlighted the importance of
customers' knowledge regarding Islamic
FinTech; thus, the practitioners and the
operators should provide a
comprehensive and good image of Islamic
banks.
This study underlines that the result for
Malaysian and Saudi Arabian is different.
Thus, the practical implication of this study
might be inefficient for other countries.
(Baber, 2020c) This study shed light on the impact of
FinTech on customer retention in an
Islamic bank.
A quantitative approach
based on non-probability
sampling.
* The adoption of FinTech in Islamic
banking has significantly impacted
shaping customer retention by offering
payment, advisory, and shariah
compliance services.
* Islamic banks should provide easy and
convenient FinTech services and religious
information such as the time of prayer.
This study would be more useful if it had
discussed the result comprehensively and
applicable for practitioners, particularly
Islamic bank managers.
(continued on next page)
M.M. Alshater et al. Heliyon 8 (2022) e10385
6
7. Table 2 (continued)
Paper Info Purpose Methodology Results Dropout
Islamic FinTech development and its impact on Islamic Finance Institutions
(Rabbani et al.,
2020)
This study aims to assess the current
development of Islamic FinTech
literature.
A systematic review on 113
article sources from SSRN,
Research Gate. Google
Scholar, and others.
* This study highlights three common
topics discussed in the Islamic FinTech
research area: Islamic FinTech
opportunities and challenges,
cryptocurrency/blockchain shariah
compliance, and law/regulation.
* Islamic FinTech enhances financial
institution performance by increasing
efficiency, transparency, and customer
satisfaction at an affordable cost.
* The regulatory framework should be
designed to support the improvement of
Islamic FinTech, specifically for Muslim
customers.
This study does not clearly state the data
selection criteria, which become crucial in a
systematic review to avoid the researcher's
biases. Moreover, this study does not
provide recommendations for the
government or future research directions
for researchers.
(Muryanto et al.,
2021)
This study assesses the prospects and
challenges of Islamic FinTech
development in Indonesia.
A qualitative method based
on statute and conceptual
approach.
* Indonesia has become a promising
country in terms of Islamic FinTech
development.
* Indonesia urgently needs an Act with
specific regulations centralized and legal
to escalate Islamic FinTech's development
significantly.
This study focuses on Islamic FinTech in
Indonesia. Thus, the finding does not
represent other countries.
(Almulla and
Aljughaiman,
2021)
This paper examines the impact of
FinTech firms and services on Islamic
and conventional banks' performance.
GMM regression. * This study affirmed that the massive
growth of FinTech firms has significantly
decreased the Islamic and conventional
bank's performance, measured by return
on asset and return on equity rates.
The research will be more insightful if it
contrasts the performance of Islamic banks
that have implemented FinTech with those
that have not.
(Rabbani and
Khan, 2020)
This study discusses the impact of
FinTech on Islamic banking
development in Bahrain.
Qualitative and literature
review.
* FinTech has a significant impact in
enhancing the Islamic bank's performance
and efficiency by reducing operational
costs.
* FinTech, artificial intelligence, and
blockchain will re-shape Islamic banking
development.
This study does not provide a
comprehensive discussion of existing
literature.
(Selim, 2020) This paper examines the adoption of
FinTech to eliminate interest rates or
riba in foreign currency transactions by
Islamic banking.
A qualitative method based
on hadith.
* Islamic banking should provide foreign
currency transactions by integrating
FinTech interest-free foreign exchange
bank machines (IffexBM), which allows
the transaction at the current time
without any markup prohibited in Islam.
* The implementation of IffexBM will
increase the market share of Islamic
banking.
This study focused on the mathematical
model of eliminating riba on foreign
currency transactions by Islamic banks.
However, the discussion on quantitative
analysis and how it will be implemented
lacks explanation.
(Altwijry et al.,
2021)
This study aims to construct Shar
ıʿah-
based FinTech Money Creation Free
model for Islamic banking.
literature review, content
analysis, and semi-
structured interview.
* The collaboration between FinTech and
Islamic banking will engage the
customer's trust and confidence towards
the shariah compliance of Islamic banking.
The study lacks a comprehensive
explanation in implementing the model.
(S. A. Shaikh,
2021)
This study proposes a hybrid model of
Islamic microfinance and FinTech to lift
the efficiency and contribution of
Islamic microfinance.
Mathematic model and
empirical estimation based
on micro panel data.
* The implementation of FinTech should
be backed by non-financial support in the
pre-financing stage, financing stage, and
post-financing stage which will offer
deeper understanding and improve the
community's financial literacy, especially
for the poor and unbanked people.
* FinTech provides a solid solution in
boosting the sustainability of Islamic
microfinance.
This paper does not undertake the opinions
of shariah and IT expert to assess the
credibility of the model based on shariah
compliances and technology security.
(X. Wang et al.,
2021)
This study investigates the effect of IT
investment on the performance of
conventional and Islamic banks
performance.
Generalized method of
moments (GMM)
regression.
* This study argues that Islamic banking
has misallocation in investing in FinTech.
* Investing in FinTech does not present
significant benefits for Islamic banking
regarding intellectual capital and
competitive advantage.
This study is focusing on three countries,
namely Sri Lanka, Bangladesh, and
Pakistan. Thus, the result cannot be
generalized.
(Nastiti and
Kasri, 2019)
This study assessed the effectiveness of
branchless banking (FinTech)
regulation on Indonesian Islamic banks.
Liner regression with
generalized least square
estimation.
* The cointegration of FinTech in Islamic
banking does not yet support by solid
regulation and a productive environment.
The study claimed that the ineffective
contribution of FinTech is caused by the
small number of Islamic banks that have
adopted it; however, it did not address
potential solutions.
(Nurhasanah and
Rahmatullah,
2020)
This study investigates the existing law
and regulation of Islamic FinTech
protection in Indonesia.
Juridical-normative with a
qualitative approach
* It argues that there is a lack of clear and
comprehensive regulation for Islamic
FinTech. Thus, Islamic FinTech still
adopts conventional FinTech's regulation.
* The existing regulation failed to avoid
customer data misuse in illegal instances.
This study critically discussed the legal
protection of Islamic FinTech in Indonesia.
A future cross-country study should be
conducted.
(continued on next page)
M.M. Alshater et al. Heliyon 8 (2022) e10385
7
8. and Finland, this study tells us that special committees and legal laws are
required to drive Islamic FinTech development. Table 2 further sum-
marizes the prior literature in this stream.
4.1.2. Stream 2: Islamic FinTech and distributed ledger technology
This stream consists of 33 studies and is divided into two sub-streams:
Cryptocurrency (25 articles) and Blockchain (8 articles). The list of ar-
ticles in this stream is presented in Table 3.
The first sub-stream is about the cryptocurrency literature; it mainly
discusses the role of cryptocurrency from a shariah centric perspective
and the risk-return tradeoff of cryptocurrencies (Ajouz et al., 2020;
Hammad, 2018; Lietaer, 2017; Oziev and Yandie, 2018; Saleh et al.,
2020; Siswantoro et al., 2020; Virgana et al., 2019; M. Abubakar et al.,
2019; N. Khan et al., 2020; Lahmiri and Bekiros, 2019; Lahmiri et al.,
2020; Mensi et al., 2020; Rehman et al., 2020). Islamic finance does not
consider money as a subject matter of trade but as a medium of exchange.
However, the introduction of digital currencies has renewed the debate
on the status of money and its dynamics, especially within the context of
digital currency, i.e., cryptocurrency. In this regard, Oziev and Yandie
(2018) critically analyzed bitcoin's nature and features and identified no
contradiction of bitcoin with Islamic laws. Much has been written about
the status of money and its role in the overall economy after the seminal
work of Nakamoto in 2008 (Figuera and Tortorella Esposito, 2019;
Mohamad and Sifat, 2017; Oberauer, 2018).
Nevertheless, cryptocurrencies are heavily criticized for their func-
tional point of view for the following main reasons (Abozaid, 2020; Y. S.
Abubakar et al., 2018). First, all the products within the nomenclature of
cryptocurrency are derived from financial engineering without being
backed by real economic assets; thus, it does not fit within Islamic
finance. Islamic finance proposes financial intermediation based on real
tangible assets, which naturally strengthen the economy and make it
more resilient during economic turmoil. Secondly, Islamic finance does
not allow transactions based on interest and speculation (M. K. Hassan
et al., 2019). Also, recent studies show that cryptocurrencies are ineffi-
cient (Bariviera, 2017; Nadarajah and Chu, 2017; Tiwari et al., 2018),
highly volatile and speculative (Cheah and Fry, 2015; Elsayed et al.,
2020; Katsiampa, 2017), very sensitive to macroeconomic factors (Demir
et al., 2018; P. Wang et al., 2020), and lacks flexibility and acceptability
(Hanif, 2020), it cannot be used as a medium of exchange on the ground
because of its speculative nature (Baur et al., 2018). Thirdly, crypto-
currencies are also used in illegal activities such as money laundering and
purchasing drugs and weapons (Hammad, 2018). Cryptocurrencies are
type of digital currencies that are generally not asset-backed or issued by
any central bank, so it doesn't have the same features of fiat money. Lastly
and very importantly, due to the aforementioned factors, cryptocurren-
cies are not directly backed by any country or regulatory body, unlike fiat
money which has implications for monetary policy. If central bank
money no longer defines the unit of account for most economic activities
and if crypto assets instead provide those units of account, the central
bank's monetary policy becomes irrelevant. Moreover, most developing
countries are heavily dependent on foreign currency reserves to meet
their fiscal deficit and debt obligation. This provides an analogy to
cryptocurrency and may disconnect the monetary policy in local currency
from the local economy. This dilemma will remain in developing coun-
tries if a global digital currency is not introduced.
Siswantoro et al. (2020) investigated a class of 23 different crypto-
currencies and asserted that cryptocurrencies are highly volatile and
cannot become alternative fiat money in Muslim countries. Specifically,
Kirchner (2021) ascertained that the shariah compliances of crypto-
currency still become a debate amongst the shariah scholars. From an
Islamic law perspective, the classification of cryptocurrency still needs
further analysis. Hammad (2018) reported similar findings. However, if
the cryptocurrency is backed by any precious metal such as gold, it will
increase its acceptance rate and adaptability in Muslim populated
countries. Ajouz et al. (2020a) analyzed the recently emerged Precious
Metal Backed Cryptocurrency (PMBC) and found that more than 63.55%
of respondents will accept PMBC as a mode of transaction for their future
payments. In other studies, Ajouz et al. (2020b) proposed a model for
implementing the PMBC mechanism, and Ajouz et al. (2020c) assessed
the shariah compliances of PBMC. These studies highlighted that PMBC
provided shariah compliances standards to perform the function of
money while operating as a peer-to-peer payment system.
In a similar vein, Saleh et al. (2020) and Virgana et al. (2019)
maintained the view that payment methods based on cryptocurrencies
are legitimate, as they reduce the transactions cost and are backed by
shariah as fiat money. Similar to the analogy of cryptocurrency, Lietaer
(2017) proposed a model of global digital currency i.e., ‘Trade Reference
Currency’, and will be backed by tangible assets such as gold, silver, oil,
etc., and the bearer will bear storage cost. Over the last decade, the family
of cryptocurrencies has witnessed tremendous growth, with more than
USD 2 trillion in total market value.
With the advent of cryptocurrency and developments around block-
chain, technology experts, industry professionals along shariah scholars
have been working to introduce FinTech in shariah-compliant financing
products and services. In this regard, M. Abubakar et al. (2019) argued
that cryptocurrencies have three competitive advantages over other
forms of money, namely, (1) It is based on a unique decentralized
financial system; (2) It's controlled issuance; (3) to surmount inflation.
Consequently, X8 AG1
and OneGram2
launched the shariah-compliant
cryptocurrencies backed by gold and stable fiat currencies such as USD,
euro, etc.
Table 2 (continued)
Paper Info Purpose Methodology Results Dropout
(Razak et al.,
2020)
This study analyzes the need for shariah
regulation for Islamic FinTech in
Malaysia.
Qualitative approach. * This study underlines that there are at
least three types of k regulation for Islamic
FinTech, including improving the
qualifications of the shariah advisory
council.
This study only represents Malaysian
context.
(Tajudin et al.,
2020)
This study offers practical implications
for the stakeholders in elevating Islamic
FinTech performance by asses four
FinTech start-ups in Malaysia and
Finland.
A qualitative approach
based on literature reviews,
conceptual analysis, and
case study.
* FinTech players' ability to maintain and
improve customer engagement, service
quality, cohesive company's culture in
various geography, and adaptive
innovation become the prominent factor
in FinTech expansion.
* This study calls attention to utilizing
zakat, waqf, and sadaqah as additional
funds for Islamic FinTech.
* The Shariah Committee has a significant
role in assuring the shariah compliances of
Islamic FinTech.
The result of this study may have been more
applicable if it included more variety of
Islamic FinTech companies from Muslim
Majority countries. Furthermore, this study
does not propose a model for establishing a
sustainable FinTech company.
1
https://www.x8currency.com/x8x/.
2
https://onegram.org/.
M.M. Alshater et al. Heliyon 8 (2022) e10385
8
9. Table 3. Islamic FinTech and distributed ledger technology.
Paper Info Purpose Methodology Results Dropout
Cryptocurrency
(Oziev and
Yandie, 2018)
The paper discusses the nature and status
of cryptocurrency from the perspective of
Shariah.
Theoretical and
descriptive analysis.
* Defined the status and influence of
cryptocurrency within mainstream
currencies.
* Cryptocurrency can be used as money if
it fulfils the requirement of shariah.
The novelty of the paper is very limited
without providing any practical
implications and future research gaps.
(Hanif, 2020) This research evaluates certain currencies'
ability, including fiat money, banking,
and cryptocurrency, to achieve socio-
economic objectives based on shariah
principles.
Literature review. * The existing currency systems are not
effective in escalating socio-economic
development.
* Cryptocurrency does not yet meet the
shariah-compliance criteria as it does not
back by real assets.
The research should involve Islamic
scholars to enrich the discussion from
various perspectives.
(Siswantoro et al.,
2020)
This paper discusses the relevance of
cryptocurrency as money in the context of
Islam finance.
A mixed methodology of
Descriptive literature and
GARCH approach.
* Cryptocurrencies are highly volatile.
* They cannot be used as an alternative to
fiat money.
This study employed very limited period
from September 2017 to January 2019
which might not provide robust results.
(Kirchner, 2021) This research analysis the shariah-
compliance of cryptocurrency from the
historical and modern view.
Qualitative approach:
Literature review and case
study.
* Cryptocurrency can be associated with
an alternative tool for payment if it is
regarded as commodity.
* Cryptocurrency can be classified as
money without any delay in payment, riba
and interest.
* Cryptocurrency can be used as the
Islamic bond.
This discussion of this study will be more
appealing by addressing the current
regulation and report related to shariah
compliances of cryptocurrency.
(Ajouz et al.,
2020a)
This study examines the metal-backed
cryptocurrency from the shariah
perspective.
Partial least squares
structural equation
modeling (PLS-SEM) based
on questionnaires.
* This paper constructs eight factors for
the adoption of metal-backed
cryptocurrency.
* Six factors influence the adoption of
metal-backed cryptocurrency.
The study tested innovation diffusion
theory only in Malaysia and further cross-
country studies should be conducted.
(Ajouz et al.,
2020b)
This study proposes a Precious Metal
Backed Cryptocurrency (PMBC)
mechanism.
In-depth interview. * PMBC provides a convenient and secure
online platform for financial transactions.
* Regulation and governance become
primary challenges in implementing
PMBC.
The result should address more of the
challenges in implementing the proposed
model.
(Ajouz et al.,
2022)
This study analyses the shariah
compliances of PMBC.
Semi-structured interview * PMBC is argued to become a solution for
shariah-compliant cryptocurrency, which
financial experts and shariah scholars
validate.
The discussion of this study will be more
comprehensive by providing the updated
regulation related to cryptocurrency in
various Muslim countries to present the
current state of legalization.
(Saleh et al.,
2020)
This paper assesses the Islamic approach
towards the distillation of transection
based on cryptocurrency.
A qualitative approach
based on semi-structured
interviews.
* Cryptocurrency is a legitimate payment
method.
* It reduces the cost of a transaction.
* It is compliant with shariah as any other
fiat money.
The results cannot be generalized since it
is based on only 8 interviews and are
concentrated in Nigeria and Malaysia.
(Virgana et al.,
2019)
The paper proposes a conceptual model of
Islamic cryptocurrency.
Theoretical and conceptual
approach.
* Cryptocurrency can be used as a medium
of exchange if it does not involve interest,
not used for illegal activities.
The paper does not provide any model,
rather discusses the literature vaguely
without any implication towards Islamic
cryptocurrencies.
(Lietaer, 2017) This study presents a shariah-based digital
currency.
Theoretical and conceptual
approach.
* The global trade-based digital currency
will be backed by major commodities such
as gold, silver, oil, etc.
* This currency lies within the scope of
countertrade; thus, no new legislation is
required.
This study lacks depth analysis on shariah
compliance based on fiqh, Quran, and
hadith to enrich the discussion.
(M. Abubakar
et al., 2019)
This paper discusses the role of
cryptocurrency in the development of
Islamic finance.
Qualitative and descriptive
approach.
* Cryptocurrency advantage due to
decentralization, limited issuance, and
mitigating inflation.
* Shariah scholars should be proactive in
designing the standards and regulations to
incorporate them into Islamic finance.
The finding of this study would be more
impactful if the researchers conducted an
in-depth interview to gather the scholar's
perspective.
(N. Khan et al.,
2022)
This paper structured and tokenized
Sukuk based on blockchain.
Theoretical and conceptual
approach.
* Identified key challenges faced in the
issuance of Sukuk
* Discussed several blockchain
taxonomies to identify the best blockchain
application focusing on Islamic finance.
* Conducted a case study on Sukuk
tokenization through smart contracts for
murabaha Sukuk.
This paper mostly focused on murabaha
Sukuk, we are not sure if such a structure
is viable also for other types of Sukuk.
(Uddin et al.,
2020)
This study evaluates the role of
cryptocurrency as a hedging instrument.
MGARCH-DCC, wavelet
methods.
* Bitcoins returns are volatile but tend to
come back around their mean in the long
run.
* It provides diversification benefits across
This study argued that bitcoin offers
diversification benefits for DJIM both in
the short and long-run investment period.
However, the authors should briefly
address the shariah compliance in
(continued on next page)
M.M. Alshater et al. Heliyon 8 (2022) e10385
9
10. Table 3 (continued)
Paper Info Purpose Methodology Results Dropout
all equity markets, including Dow Jones
Islamic Market Index (DJIM).
investing in Bitcoin instruments to offer
more comprehensive suggestions.
(Lahmiri et al.,
2020)
This research examines the randomness,
power-law correlations, and chaos among
the prices of common stock indices from
the European zone, green (low Carbon),
family business, and Islamic stocks.
Empirical mode
decomposition.
* Prices fluctuations in the long (short) run
are (anti) persistent.
The paper was more focused on European
equity markets along with the
cryptocurrency market than Islamic
equity markets.
(W. M. A. Ahmed,
2021)
This research investigates the sensitivity
of Islamic stock towards the volatility
price of bitcoin.
Quantile regression
approach.
* The price volatility of bitcoin
significantly shapes the Islamic stock
market behavior both in emerging and
developed market during normal, bear,
and bullish markets states.
The study will be more impactful by
examining the differences between
Muslim and non-Muslim countries, as
bitcoin still becomes a debate amongst the
shariah scholars.
(Rehman et al.,
2020)
This paper assesses whether Islamic stock
indices provide diversification
opportunities to cryptocurrency investors.
ARFIMA-FIGARCH model. * Times varying dependence of DJIUK,
DJIJP, and DJICA with bitcoin.
* VaR of bitcoin is higher than Islamic
indices.
* Islamic indices provide diversification
benefits to bitcoin investors.
One of the research limitations is that it
does not represent the volatility spillover
between Islamic stock and bitcoin in
emerging markets and Asia countries by
using Dow Jones Islamic Market Asia and
DJIM World Emerging Markets Index data.
(Mensi et al.,
2020)
This paper focuses on the risk-return
characteristics of bitcoin with Islamic
equity and capital markets.
Wavelet coherence (WTC),
Cross-wavelet
transformation (XWT),
Wavelet value at risk
(VaR).
* Strong co-movement of Islamic equity
and capital market with bitcoins at low
frequencies.
* The diversifications benefit of Islamic
assets with bitcoin depends on time and
frequency.
The discussion on result analysis would be
more insightful by presenting the shariah-
compliance of DJIM relates to it is a
possibility as the hedger for bitcoin in the
short-term investing period.
(Hasan et al.,
2021)
This study analyzes the impact of
cryptocurrency policy uncertainty toward
several investment instruments, including
gold, bitcoin, DJ Islamic index, Sukuk,
WTI returns, and the US dollar.
Ordinary least square,
quantile regression, and
quantile-on-quantile
regression.
* Bitcoin, the US dollar, and WTI return do
not function as hedgers for the
uncertainties of policy for
cryptocurrencies during the bearish and
bullish market.
* The higher uncertainties of
cryptocurrency policies will lead to a
higher return of gold, Sukuk, and the DJ
Islamic index.
The discussion of the finding of this study
would be more insightful if the analysis
coupled with further explanation on the
impact of screening criteria in Islamic
investment instruments.
(M. K. Hassan,
Karim, et al.,
2020)
This study analysis the shariah compliance
of bitcoin and cryptocurrencies.
Qualitative approach. * A legal regulation should declare
whether bitcoin and cryptocurrencies are
shariah compliant.
The finding of this study would be more
attractive by investigating the regulation
of bitcoin and cryptocurrency in various
countries: Muslim vs. non-Muslim
countries.
(Aloui et al.,
2021)
This paper investigates the differences
between Islamic gold-backed
cryptocurrencies and their counterpart.
Multivariate GJR-GARCH * Islamic cryptocurrencies are less
sensitive to macroeconomics risks.
* Islamic cryptocurrencies have a positive
correlation with gold while conventional
cryptocurrencies are negatively
correlated.
This study focused on the comparison of
Islamic and conventional gold-backed
cryptocurrencies from a quantitative
perspective. The result analysis should be
analyzed by engaging directly with the
shariah compliance principles perspective.
(Lahmiri and
Bekiros, 2019)
This paper investigates the decomposition
of the persistence structure of green and
Islamic cryptocurrencies.
Multi-step resolution
approach.
* The returns of Islamic and green
cryptocurrencies possess anti-persistent
dynamics.
* Their volume, price, and volatility reflect
high persistence as compared to
conventional cryptocurrencies.
This study employed a narrow period data
which covers less than one year's data for
each variable. Hence, the result might not
be robust.
(Nugroho, 2021) This study examines volatility spillover
between gold-backed cryptocurrencies
and gold, particularly during COVID-19.
GJR-GARCH method
under corrected DCC
(cDCC).
* The connectedness between gold and
gold-backed cryptocurrency (GC-gold)
increased over time during COVID-19.
* There is a significant difference in
behaviour between conventional and
Islamic GC-gold.
* Islamic GC-gold is more resistant to
COVID-19's impact compared to
conventional counterparts.
The study uses data covering the period
from 15 February 2019 to 10 August
2020. Thus, the finding of this study will
be more insightful if the study compares
the volatility pre-and during COVID-19.
(Chkili et al.,
2021)
This study examines the differences
between the Islamic stock market and
bitcoin in facing an economic slowdown.
DCC-FIGARCH model. * Bitcoin performs better than Islamic
stock, shown by the constantly increasing
diversification benefit.
* Economic instability causes a higher cost
in performing hedging strategies.
This study presented the economic
downturn during COVID-19. However,
the result will be more impactful if the
study included range data during GFC
1998 and 2008.
(Bahloul et al.,
2021)
This paper analyzes whether bitcoin,
Islamic index, and gold provide “safe-
haven” instruments during COVID-19.
Empirical method
following Baur and Lucey's
(2010) and Baur and
McDermott's (2010)
* Islamic stock indexes and bitcoin were
significantlyaffectedbytheCOVID-19crisis.
* Bitcoin act as a weak hedge and not a safe-
haven asset.
The discussion will be more insightful if
the study presents a brief comparison
between bitcoin and Islamic stock.
(Echchabi et al.,
2021)
This study investigates the determining
factors of Muslims to invest in Bitcoin.
SEM method. * Perceived ease of use, compatibility,
awareness, and facilitating conditions are
crucial factors in forming Omani
communities' intention to invest in
Bitcoin.
This study only presented Muslims in
Oman.
(continued on next page)
M.M. Alshater et al. Heliyon 8 (2022) e10385
10
11. Several studies have assessed the empirical nature of cryptocurrencies
along with Islamic equity and capital markets to understand the risk-
return tradeoff and whether they provide diversification and hedging
opportunities. For example, Uddin et al. (2020) consider the role of bit-
coins as hedging instruments in portfolio management. Using a
comprehensive daily dataset of Islamic, convention, and sustainable as-
sets, they reported that bitcoin values are mean-reverting in the long run,
however, bitcoin provides portfolio diversification benefits to all equity
markets both in the short and long run. Lahmiri et al. (2020) also observe
the long-term persistence in the fluctuation of bitcoin prices along with
Table 3 (continued)
Paper Info Purpose Methodology Results Dropout
Blockchain
(Chong, 2021) This research discusses the advantage and
challenges of implementing blockchain in
Islamic finance.
Qualitative approach. * Blockchain offers a transparent financial
transaction in Islamic financial services,
which will boost trust between the parties.
* The lack of blockchain regulation and
shortage of algorithmic protocol to
validate the smart-contract decision
become the main challenges that hinder
the development of Islamic FinTech.
This study will be more comprehensive by
conducting an in-depth interview with
financial and IT experts.
(Delle Foglie
et al., 2021)
This study investigates the impact of
blockchain technology, particularly smart
contracts, and tokenization on the Sukuk
industry.
Case study analysis. * Sukuk tokenization enables sharing and
tracking the ownership, which degrades
the uncertainty of ownership.
* Blockchain technology has significantly
depressed the risk of gharar and maysir in
Sukuk issuance.
This approach fails to take the perspective
of stakeholders and experts regarding the
issue.
(Alaeddin et al.,
2021)
This study analyses the opportunity and
challenges in adopting blockchain
technology in Islamic finance
instruments.
Qualitative approach:
survey.
* Blockchain increases the work efficiency
in conducting financial services, which
will prompt the contribution of Islamic
finance towards society, specifically in a
crisis such as COVID-19.
* Lack of experts, contradictory fatwas and
regulations, the absence of shariah
supervision, and shariah standards are the
major challenges in blockchain adoption.
The discussion will be more insightful by
addressing the practical contribution to
conquering the challenges.
(Busari and
Aminu, 2021)
This paper aims to explore the challenges
and opportunities in adopting smart
contracts to improve the efficiency of
Sukuk issuance.
Qualitative approach. * Blockchain technology has the potential
to improve the reliability of Sukuk
transactions between the parties.
* The lack of global shariah standards and
limited national regulation becomes the
key challenges in adopting blockchain on
Sukuk.
* The application of blockchain on Sukuk
issuance is still in the infant stage. Thus,
there is no robust evidence that proves
blockchain has a significant impact in
increasing the effectiveness of Sukuk
issuance.
This study is based on doctrinal literature
and interview with local smart contract
issuance. Hence, the result does not fully
present the general issues on a global
level.
(M. H. Ali et al.,
2021)
This study proposes a framework for
blockchain adoption in the halal food
industry.
Qualitative approach. * This study addresses five challenges
related to the halal Supply Chain (SC) food
industry that can be solved by blockchain
technology.
The discussion of this study will be more
impactful by involving the expert's
perspective to obtain a comprehensive
challenge faced by the halal food industry.
(Al-Sakran and
Al-Shamaileh,
2021)
This paper analyzes how the adoption of
blockchain and smart contract
technologies shapes profit-loss-sharing
investment schemes.
A qualitative and
quantitative approach.
* The implementation of blockchain and
smart contracts on Islamic finance,
particularly on musharakah contracts,
significantly increases transparency and
customers' trust, and participation.
* This study proposed e-negotiation
models for the investor and entrepreneurs
in achieving fair agreement on the
musharakah contract.
This study does not address the limitation
in adopting blockchain and smart contract
technology.
(Abdeen et al.,
2019)
This study proposed a platform for
implementing blockchain on takaful
services.
Qualitative approach. * This study builds upon blockchain-based
mudharabah and wakalah/wakalah waqf
models.
* Implementation of blockchain on takaful
services has had a positive impact
resulting in enhanced confidence and
transparency, and communal
involvement.
This study does not discuss the challenges
in adopting blockchain on takaful
services.
(Mohd Nor et al.,
2021)
This study examines the contribution of
blockchain technology in enhancing zakat
management.
A qualitative approach
based on an interview with
zakat stakeholders and
SEM approach.
* This study encourages Islamic social
finance to adopt blockchain technology to
improve management performance.
* Trust in technology, perceived
usefulness of technology, and behavior in
using technology become the crucial
factors that influence the acceptance of
blockchain usage in zakat.
The result of this study cannot be
generalized as it is involved Malaysian
zakat stakeholders and receivers and
payers.
M.M. Alshater et al. Heliyon 8 (2022) e10385
11
12. European and Islamic markets. Another research by W. M. A. Ahmed
(2021) analysis the sensitivity of the Islamic stock market towards the
dynamic volatility of bitcoin in developed and emerging markets and
found a similar behavior of Islamic stock in two types of markets during
normal, bear, and bull markets states. Similarly, Rehman et al. (2020)
studies the risk dependence structure of bitcoin along with the Islamic
equity market for the period of 2010–2018 and found that the value at
risk of bitcoin is higher than those of Islamic equity markets, which
naturally implies that investors from cryptocurrency market should add
Islamic equity funds to reduce the overall risk of their portfolio. Besides,
Mensi et al. (2020) analyzed bitcoins' co-movement and risk structure
with the Islamic equity and bond market and provided mixed results.
They find strong co-movement of bitcoin in the same direction at a lower
frequency with Islamic equity and bond, suggesting lower (higher)
diversification benefits for the long run (short-run) investors. Lastly,
empirical evidence during the policy uncertainty period, Hasan et al.
(2021) portrayed the positive and significant relationship between
cryptocurrency policy uncertainty towards gold, Sukuk, and the DJ Is-
lamic index return, which indicates the existence of diversification
benefit between those assets during bearish, normal, and bullish market
period. Besides, this study also mentioned that the existence of shariah
screening criteria on Sukuk and the DJ Islamic index improves the
resistance of Islamic investment instruments towards uncertainty and the
economic meltdown period.
Few studies have also assessed the differences between Islamic and
conventional cryptocurrencies. The shariah compliance of bitcoin and
cryptocurrency still has become a debate amongst Islamic scholars and
stakeholders (M. K. Hassan, Karim, et al., 2020). Aloui et al. (2021) found
that Islamic cryptocurrencies positively correlate with yellow metal.
However, this relationship is negative and weak for conventional cryp-
tocurrencies. Likewise, Lahmiri Bekiros (2019) reported that green and
Islamic cryptocurrencies showed anti-persistence in their returns while
the volume, prices, and volatility exhibit a higher pertinence dynamic
than its counterpart. During economic meltdown due to COVID-19
(Nugroho, 2021), Islamic gold-backed cryptocurrency (GC-gold) has
shown better performance than conventional GC-gold, which is indicated
by the resistance of Islamic GC-gold to COVID-19's impact. Moreover,
Chkili et al. (2021) found that bitcoin provides a safer asset for investors
during economic downturns than Islamic stock. Thus, it is suggested that
investors add bitcoin to their investment portfolio to reduce the risk.
These findings imply significant differences between Islamic and con-
ventional ones; the logical reason is the existence of screening criteria
standards in Islamic cryptocurrencies. Furthermore, the behavior of Is-
lamic and conventional cryptocurrencies was also influenced by investor
sentiment, where the investor in an Islamic portfolio should follow spe-
cific rules based on shariah compliance, including the prohibition of any
speculation activities.
In contrast with the previous studies, a research by Bahloul et al.
(2021) ascertained that during the COVID-19 crisis period, bitcoin and
Islamic stock indexes had a similar volatility pattern, and the two types
of investment instruments did not offer safe-haven investment. Hence,
it can be concluded that bitcoin has a similar characteristic with other
investment instruments, and the massive amount of information related
to bitcoin will gradually decrease the Muslim perspective regarding the
uncertainty (gharar) of bitcoin. Moreover, However, the legal regula-
tion related to shariah compliances of bitcoin should be designed to
evaluate and improve its legality from an Islamic perspective. Another
interesting study conducted by Echchabi et al. (2021) examined the
predicting factors that affect Muslims in Oman to invest in Bitcoin and
found that perceived ease of use, compatibility, awareness, and facili-
tating conditions plays a vital role in shaping the investor's intention.
Importantly, this study underlines that the respondents believe they
have a sufficient understanding and awareness of the Bitcoin concept,
its benefits, and the strategies utilized to administer a Bitcoin account.
Research that empirically assesses the investor behavior using a
quasi-qualitative approach is still scarce; this topic becomes significant
to investigate to obtain comprehensive knowledge regarding Muslim
intention to adopt bitcoin.
The second sub-stream is blockchain. Blockchain has become one of the
most popular technologies behind cryptocurrencies. This stream discuss
the implementation of blockchain technology on various Islamic finan-
cial services, including the Sukuk industry, musharakah scheme, takaful,
and zakat (Delle Foglie et al., 2021; Al-Sakran and Al-Shamaileh, 2021;
Abdeen et al., 2019; Mohd Nor et al., 2021). Blockchain classifies and
records the transaction, which is connected to every party. Thus, the
adoption of blockchain in finance will enhance the transparency and
traceability of every single financial transaction. Hence, it increases the
accountability in financial services, which in turn, promotes trust be-
tween the parties (Chong, 2021). Furthermore, Delle Foglie et al. (2021)
and Busari and Aminu (2021) demonstrated that the adoption of smart
contract and tokenization on Sukuk would support the development of
Sukuk by reducing operational cost, assuring shariah compliance,
strengthening standardization, removing the ambiguities from shariah
interpretations, and speed-up the transaction process (N. Khan et al.,
2022). Despite the numerous advantages of implementing blockchain
technology in Islamic financial services, the lack of legal regulation
related to blockchain, the absence of shariah standard of Islamic FinTech,
and the complexity of Islamic finance principles become the primary
factors that prevent the escalation of blockchain integration in Islamic
financial institutions (Alaeddin et al., 2021).
M. H. Ali et al. (2021) explained that blockchain has huge potential in
elevating the Supply Chain (SC) benefits for the halal food industry by
increasing SC transparency, food quality, traceability, and avoiding food
fraud. In the same vein, Al-Sakran and Al-Shamaileh (2021) underlined
that integrating blockchain into the musharakah financial scheme will
automatically enable the parties to conduct e-negotiation. This study
illustrated the e-negotiation model by allowing the entrepreneur and
investors to come to an agreement. The entrepreneurs should input their
information, including the purpose of investment, professional back-
ground, and previous business projects. Thus, the blockchain will auto-
matically ensure the shariah compliance of business activities, assess
business risk, and provide relevant information for the investor to decide
their participation in the business.
In addition, Mohd Nor et al. (2021) stated that the usage of block-
chain technology could be improved by socializing and educating the
community regarding the significant advantages and convenience of
utilizing blockchain on Islamic social finance such as zakat. This effort is
predicted to lead to a massive improvement in zakat collection and dis-
tribution for society. Moreover, Abdeen et al. (2019) emphasized that a
certificate from a legal authority that describes the specific roles of in-
vestors, entrepreneurs, and operators is urgently essential to manage and
control the safety and shariah-compliance of transactions in the Block-
chain expected to intensify the participation in Islamic finance. Based on
the findings of these studies, it can be ascertained that blockchain tech-
nology will increase customer engagement in Islamic finance (Abdeen
et al., 2019). In consequence, it promotes the contribution of the Islamic
finance instrument itself to economic growth. Studies also examined the
correlation between blockchain and the capital market. Table 3 further
summarizes the prior literature in this stream.
4.1.3. Stream 3: financial inclusion
This stream consists of 13 studies as described in Table 4, it is about
the role of Islamic FinTech in financial inclusion. A discussion on some of
the most important papers are presented as follows:
Islamic social finance tools such as zakat, sadaqah, waqf, Islamic
microfinance, and micro takaful models lead to financial inclusion
(Macchiavello, 2017; Zauro et al., 2020). Islamic social finance tools have
a positive impact on financial inclusion. The extensive use of Islamic
social finance tools lead to less inequality of income in Muslim countries
(Zulkhibri, 2016). The use of financial technology has increased the
reach of Islamic financial institutions to the last man standing in the
queue with social finance such as zakat, waqf, and Islamic microfinance
M.M. Alshater et al. Heliyon 8 (2022) e10385
12
13. Table 4. Financial inclusion.
Paper Info Purpose Methodology Results Dropout
(Rabbani, Ali,
et al., 2021)
This study provides a solution to the
economic crisis caused by COVID-19
by optimizing Islamic financial
instruments.
Qualitative based on theoretical
approach considering the COVID-19
situations.
* There are four stages of economic
crisis due to COVID-19.
* Ten innovative Islamic financial
instruments will significantly escalate
the economic recovery in every crisis
stage; specifically, zakat and sadaqah are
proven to be the potential source of
funds for the marginalized communities.
Ten cutting-edge Islamic financial
instruments will significantly accelerate
economic recovery at every crisis stage;
zakat and sadaqah are proven to be the
potential funding sources for
underprivileged communities.
(M. K. Hassan,
Rabbani, et al.,
2020)
This study aims to evaluate the role of
FinTech in mitigating the crisis
caused by COVID-19's effects on
Islamic financial institutions.
Qualitative approach. * The use of Islamic FinTech instruments
post COVID-19 can be categorized into
three categories: zakat, qardh al-hassan,
and sadaqah are suitable for short-term
energy support; FinTech-based
crowdfunding, the UNDP's Global
Islamic Finance, Impact Investing
Platform, and smart contracts are
suitable for recovery in the medium-
term; and finally, waqf, social SUKUK,
and smart contracts are suitable for
long-term recovery and resilience.
One of the limitations of this study is
that it does not provide potentially
applicable programs.
(Aziz et al.,
2021)
This study examines earlier research
findings to determine the correlation
between digital banking and financial
inclusion.
Descriptive research * Digital banking and financial inclusion
have a significant and positive
correlation to social and economic
development.
This study relied on bibliometrics
general analysis, which failed to
consider the content analysis of the
previous studies.
(Ezzahid and
Elouaourti,
2021)
This manuscript tries to analyze the
impact of digital banking on financial
inclusion in Morocco.
Principal component analysis method
and probit model method.
* The adoption of mobile banking has
expanded the financial accessibility for
unbanked people at a lower cost.
* Mobile banking does not have a
prominent role in improving the
financial inclusion of women and older
people. Moreover, education on
financial technology for women and
older people is crucial to elevate the
understanding and the optimal usage of
mobile banking.
The study's finding might have been
more insightful if financial inclusion
was also measured by the social and
quality impact of digital banking.
(Rabbani,
Bashar, et al.,
2021)
This research examines the adoption
of FinTech in the Islamic financial
system to conquer the COVID-19
crisis.
Qualitative based on content analysis. * This study argued that implementing
FinTech in Islamic finance institutions
would prompt the role of Islamic finance
in combating the COVID-19 crisis.
* This study proposed a system, divided
the impact of COVID-19 into three
terms, and provided the most suitable
Islamic finance instruments that can be
utilized on each term.
* Islamic FinTech should open up with
innovation to improve its contribution
to the community.
An in-depth interview with shariah
scholars and scholars can be used to
develop the suggested system in this
study.
(Hudaefi,
2020)
This paper discussed the role of
Islamic FinTech in promoting
Sustainable Development Goals
(SDGs) in the Indonesian context.
Qualitative and literature review. * Islamic FinTech has elevated SDGs
achievement in Indonesia, particularly
SDG 1, SDG 2, and SDG 10.
* Islamic FinTech has a massive impact
in boosting financial inclusion by
offering a fund source for
underdeveloped sectors such as
agriculture and small and micro-
enterprises.
The study's approach fails to bring
comprehensive and objective
discussion. Thus, the result of this study
might be biased and lead to positivist
perspectives.
(Baber, 2020a) The study compares the financial
performance of the countries in terms
of financial inclusion and FinTech.
Qualitative and descriptive approach. * Islamic FinTech is more focused on
women empowerment both financially
and socially compared to conventional
FinTech.
* Islamic FinTech has more contribution
in achieving financial inclusion than
conventional ones.
* Conventional FinTech has greater
performance and larger market share
than Islamic ones.
This study needs to use more indicators
that reflect the level of financial
inclusion to present a more accurate
result.
(Aminah et al.,
2020)
This study examines the role of
FinTech and Islamic banks in
achieving economic inclusion in
Indonesia.
Descriptive analysis with secondary
data and literature studies.
* The collaboration between Islamic
FinTech and Islamic banks has
significantly increased the accessibility
rate of small-business lending services
for unbanked communities.
This study does not discuss an empirical
example of Islamic FinTech's impact.
(continued on next page)
M.M. Alshater et al. Heliyon 8 (2022) e10385
13
14. Table 4 (continued)
Paper Info Purpose Methodology Results Dropout
(Banna et al.,
2021)
This study aims to investigate the
roles of Digital Financial Inclusion
(DFI) on Islamic banks' stability
during COVID-19's crisis.
Panel-Corrected Standard Errors
(PCSE), Two-Stage Panel Least
Squares-Instrumental Variables
(2SLS-IV), and Two-Step System
Generalized Method of Moments
(2SGMM) dynamic panel estimation.
* DFI is argued to have a positive effect
in promoting the stability of Islamic
banking and reducing the fault risk.
* DFI has an enormous effect in
degrading the number of unbanked
people, which in turn, increases the
social-economy access to the financial
institutions, particularly in the time of
COVID-19's crisis.
* The importance of DFI's impact in
increasing the Islamic banking
performance called attention to
increasing digital financial literacy by
providing seminars, workshops, and
campaigns.
* The higher number of smartphone
users, the lower number of unbanked
populations.
The findings of this study cannot be
generalized as it is adopted 65 Islamic
banks from six countries, including
Malaysia, Qatar, Sudan, Bangladesh,
Indonesia, and Pakistan. Moreover, the
number of banks sample in each country
does not balance; thus, the result might
not present the current fact in other
countries such as Qatar that has the
smallest number of banks as the
research data.
(Haider et al.,
2020)
This research tries to offer the
integration model of zakat and qardh-
al-hassan with Artificial Intelligence
(AI) and Natural Language Processing
(NLP) to overcome the COVID-19
crisis.
Qualitative approach. * The adoption of AI and NLP is argued
significantly prompt zakat and qardh-al-
hassan's contribution to enhancing
economic recovery.
* AI and NLP help Islamic financial
institutions reach wider beneficiaries
and lenders, improve the accuracy of the
decision-making process, and identify
the most effective program for the
beneficiaries. As a result, the financial
inclusion rate for the poor is escalating.
This study presents an interesting topic
by addressing the potential integration
between Industry 4.0 and Islamic
finance. However, the result of the study
will be more impactful by presenting the
applicative model of the integration.
(Tajudin et al.,
2020)
This study assesses the potential tools
to support the underserved
community by optimizing Islamic
financial instruments through
FinTech.
Qualitative approach based on
literature review, conceptual analysis,
and case study.
* Islamic FinTech has become the most
potent tool to degrade the unbanked
Muslim population by providing the
customer's needs in the fastest and
cheapest way.
* FinTech players should build customer
engagement, improve service quality,
and professionalize operations to obtain
a more significant market share.
* Islamic FinTech can alleviate the
financial inclusion problem in
underprivileged populations by utilizing
several instruments, such as zakat, waqf,
and sadaqah.
This study interviewed Islamic FinTech
practitioners from two countries, which
made the discussion comprehensive.
This study will be more insightful by
offering the customer's perspective on
Islamic FinTech.
(S. A. Shaikh,
2021)
This study aims to create a hybrid
microfinance model by integrating
different Islamic commercial and
social finance institutions utilizing
FinTech to increase its impact.
Mathematical model and an empirical
estimation.
* Implementing FinTech in Islamic
microfinance will help reach out to a
broader range of unbanked
communities and the poor.
* The sustainability of Islamic
microfinance and FinTech must be
increased through non-financial factors,
including repayment incentives,
commitment, and an investment in
knowledge and skills.
* Artificial intelligence will significantly
improve the efficiency of the financing
program by lowering administrative
costs and assisting in the client
screening process to ensure their
financial and economic stability.
The result of this study will be more
appealing by discussing the
implemented model of FinTech in other
Islamic financial institutions as a study
case.
(Razak et al.,
2020)
This manuscript analyzes the urgent
need for Islamic-compliant regulation
for FinTech applications in the
Islamic finance industry.
Qualitative approach. * FinTech and Islamic finance have
evolved into the ideal solutions for
addressing the issue of financial
inclusion by offering a risk-sharing
system and wealth distribution.
* The existing regulation was
insufficient to accommodate the related
activities; hence, strict regulation is
urgently required to implement FinTech
in Islamic financial institutions.
* In Islamic FinTech, the shariah
supervisory board should also consist of
a technology expert to guarantee that
the FinTech services adhere to Islamic
principles.
The findings of this study will be more
applicable if it also provides a brief list
of items that should be addressed in
FinTech regulation and its comparison
with the existing regulation.
M.M. Alshater et al. Heliyon 8 (2022) e10385
14
15. (H. Ahmed and Salleh, 2016). This statement also supported by Aziz et al.
(2021) who investigated the correlation between digital banking and
financial inclusion and found that digital banking has a positive corre-
lation to financial inclusion. Moreover, Ezzahid Elouaourti (2021)
explained that digital banking plays a prominent role in reducing the
number of unbanked by providing financial access in a convenient way
and competitive price.
Other studies further investigate the role of FinTech in enhancing the
contribution of the Islamic social economy and financial institutions
during COVID-19. Mustafa Raza Rabbani et al. (2021) proposed a model
of utilizing Islamic finance as an instrument in combating the COVID-19's
impact and revealed that Islamic FinTech will accelerate the collection
and distribution of funding for the community in the short, medium, and
long term. The role of Islamic FinTech and its adoption by the Islamic
financial institutions will offer remarkable solution for economic activ-
ities due to COVID-19. Rabbani, Ali, et al. (2021) divided the four-stage
economic model in combating COVID-19, namely, business and eco-
nomic damage, financial contagion, bottom formation, and post
COVID-19 effects. In addition, for each stage of the epidemic, this study
also recommends ten unique Islamic financial services. In detail, M. K.
Hassan, Rabbani, et al. (2020) offers four potential Islamic finance in-
struments merged with FinTech in combating the economic downturn
due to COVID-19, namely, Islamic cryptocurrency, a blockchain-based
system for zakat and qardh-al-hasan, smart contracts, and smart Islamic
banking. In a broader context, Hudaefi (2020) argued that implementing
FinTech services in Islamic financial institutions has huge potential in
elevating the social and economic welfare of the unbanked population by
distributing funding for their small and underdeveloped business sectors;
which will support the government in achieving the Sustainable Devel-
opment Goals (SDGs), particularly SDG 1 no poverty, SDG 2 zero hunger,
and SDG 10 reduce inequality. Interestingly, Baber (2020a) pointed to
other advantages of having FinTech in Islamic finance, as the improve-
ment of women's quality of life as it is focused on empowering women
both financially and socially.
Previous studies highlighted the importance of implementing Fin-
Tech in Islamic financial institutions for financial inclusion. Interestingly,
Aminah et al. (2020) stressed that despite the crucial impact and massive
potential in escalating the contribution of Islamic finance towards
financial inclusion, the adoption of FinTech itself had been significantly
proven in leading the Islamic banking market share to the upward trend.
Furthermore, Banna et al. (2021) and Syed et al. (2020) also revealed
that the adoption of FinTech in Islamic banking has a crucial role in
promoting banking stability, specifically during the economic downturn
caused by COVID-19, specifically by minimizing the cost of services,
maximizing profit, and promoting the efficiency of banks. Hassan (2015)
suggests the possibility of including poor Muslims in mainstream finan-
cial services through innovative approaches. Islamic microfinance can be
viable if it is delivered with FinTech, as it can lead to financial inclusion
and is based on the principle of Islamic solidarity. He argues that
FinTech-based microfinance can generate enormous employment and
economic prosperity for the poor. Correspondingly, Hidayat (2019) also
concludes that financial inclusion is an excellent idea for the poor and
marginalized. However, it can only be achieved through the help of Is-
lamic banks and non-banking financial corporations (NBFCs). Islamic
banks need to collaborate with Islamic microfinance institutions to
achieve financial inclusion. Shinkafi et al. (2020) and Zulkhibri (2016)
report similar findings, arguing that Islamic banks and financial in-
stitutions have an essential role in the financial inclusion of the poor and
marginalized. As Islamic banking is based on the principle of compassion,
solidarity, and economic justice, it can help achieve financial inclusion by
bringing more innovative financial services through FinTech (Rabbani
and Khan, 2020).
Islamic financial institutions have an essential role to play in the
country's financial inclusion. The findings of the study conducted by
Banna et al. (2020) suggest that barring a few countries in the Middle
East and MENA region, most of the selected countries have some
inconsistent trends in the Islamic banking sector. It further concludes that
financial inclusion is linked with the efficiency of Islamic banks. The
study is a post-crisis analysis. It concluded that Islamic banks are still
bearing the consequences of the financial crisis; therefore, Islamic banks
should focus more on financial inclusion, and banks with a sound and
high level of the inclusive financial environment should have high effi-
ciency. Moreover, Tajudin et al. (2020) also emphasized that adopting
FinTech improves the performance of Islamic financial institutions in two
ways. First, it escalates the living standard of the underserved commu-
nity. Second, it becomes an effective way to strengthen the intimacy
between the customer and service provider through broader customer
knowledge regarding social finance. In addition, S. A. Shaikh (2021),
Aydin and Iqbal (2017) and Macchiavello (2017) also underlined that
Islamic financial institutions such as Islamic microfinance, banks, and
credit unions have an essential role to play in achieving financial inclu-
sion through the use of technology.
Financial inclusion and the role of Islamic finance must be viewed
differently in Muslim and non-Muslim countries (Sain et al., 2018). The
study is conducted in Australia, and it concludes that FinTech has nothing
to do with financial inclusion and in Australia alone, despite the wide-
spread use of financial technology, there are 3.1 million of the adult
population who are financially excluded. They further draw a conclusion
that the Muslim population is finically excluded due to their religious
beliefs because Islam prohibits riba and Australia is not governed by the
Islamic financial system. Baber (2020a), Kannaiah et al. (2017), and
Abubecker et al. (2019) support these findings, one being that the Mus-
lims in Non-Muslim countries are financially excluded and are not able to
get valuable financial services due to their religious beliefs. Adewale and
Haron (2017) support the argument that religion being an impediment to
financial inclusion.
From another perspective, Kannaiah et al. (2017) and Kim et al.
(2018) discuss the relationship between financial inclusion and the
economic growth of a country. They gather panel data from 55 OIC
countries and conclude by applying panel VAR, IRF's and granger cau-
sality tests. Pg Md Salleh (2015), Brekke (2018), and Zauro et al. (2016)
analyzed financial inclusion and individual characteristics with regard to
the specific countries. Jan et al. (2018), Aydin and Iqbal (2017), and A. E.
E. S. Ali (2017) say that financial inclusion is bout justice in Islamic
finance. It is the right of every individual to have access to valuable
financial services. Banna et al. (2020), and Arsyianti and Kassim (2018)
analyze the role of Islamic banking in financial inclusion and how Islamic
banking can be used as a tool for financial inclusion. Having access to the
key financial services is the major indicator of the economic well-being,
quality of life, and standard of living of the population all across the globe
(Banna et al., 2020; Sain et al., 2018). Not only that having access to
these valuable financial services helps a person to make an online pay-
ment, access to credit and offers, investments, and getting banking and
other financial services (Aldoseri and Worthington, 2017). According to
the Global Findex databases 2017, the situation in Organization of Is-
lamic Cooperation (OIC) countries remains worse as adults participating
in the financial system or having no access to the financial services re-
mains low as compared to the high-income countries. Despite the huge
penetration of Islamic banks and financial services in these countries, the
level of financial inclusion remains significantly low (Baber, 2020a).
There are 41% adults with the contribution in the financial system in OIC
countries as compared to the 92% in the high-income countries. The
report further stresses that around 75% of the world's unbanked popu-
lation lives in developing countries. The unbanked population of the
world is dominated by the Muslim countries with countries like Pakistan
and Bangladesh with 5.2% and 3.7% of the worlds unbanked population
respectively.
There is a strong opportunity for Islamic FinTech to fill this gap by
providing access to financial services to this segment of people and
bringing confidence in the financial system through technology.
Financial inclusion can be achieved by combining technology with Is-
lamic finance and Islamic FinTech is the way to go forward (Kim et al.,
M.M. Alshater et al. Heliyon 8 (2022) e10385
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