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The Disruption of Islamic Finance by Fintech: The Role of Digital Platforms in the Malaysian Islamic Banking Landscape

Author

Listed:
  • Shazali bin Shaharudin

    (Faculty of Accountancy, University Technology MARA, Cawangan Melaka, Kampus Alor Gajah, Melaka, Malaysia)

  • Muhammad Mukhlis bin Abdul Fatah

    (Faculty of Accountancy, University Technology MARA, Cawangan Melaka, Kampus Alor Gajah, Melaka, Malaysia)

  • Mohd Yassir bin Jaafar

    (Faculty of Accountancy, University Technology MARA, Cawangan Melaka, Kampus Alor Gajah, Melaka, Malaysia)

  • Nurshazwana binti Mohd Helmi

    (Faculty of Accountancy, University Technology MARA, Cawangan Melaka, Kampus Alor Gajah, Melaka, Malaysia)

  • Muhammad Aiman bin Mohd Yunus

    (Faculty of Accountancy, University Technology MARA, Cawangan Melaka, Kampus Alor Gajah, Melaka, Malaysia)

  • Miza Amirah binti Saedin

    (Faculty of Accountancy, University Technology MARA, Cawangan Melaka, Kampus Alor Gajah, Melaka, Malaysia)

Abstract

New financial technology solutions are transforming traditional banking services at lightning speed and introducing fresh possibilities and hurdles in global banking markets. Malaysia’s Islamic banking sector is transforming their business through Fintech by providing modern digital systems that make banking easier for staff and customers. Electronic changes pose risks to Shariah rule compliance as well as customer privacy while the financial sector deals with unmet regulations. This paper shows how Fintech helps to change Islamic banking in Malaysia by using digital tools to bring more people into banking, make processes simpler, and ensure financial products follow Islamic law. Using discussions and content analysis, this paper looks at what professionals consider as important changes, obstacles, and growth possibilities within the Islamic banks. Our findings reveal that using modern tech platforms such as blockchain, Artificial Intelligence (AI) and digital wallets can improve Islamic finance’s development, but it require strong regulations to safeguard against safety threats and keeping the legal matters straightforward. The report presents practical guidelines for Islamic banks, fintech providers, and government officials to shape a robust Islamic financial technology environment that improves market competition and develops public financial knowledge and access.

Suggested Citation

  • Shazali bin Shaharudin & Muhammad Mukhlis bin Abdul Fatah & Mohd Yassir bin Jaafar & Nurshazwana binti Mohd Helmi & Muhammad Aiman bin Mohd Yunus & Miza Amirah binti Saedin, 2025. "The Disruption of Islamic Finance by Fintech: The Role of Digital Platforms in the Malaysian Islamic Banking Landscape," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(6), pages 1738-1744, June.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-6:p:1738-1744
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    References listed on IDEAS

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    1. Ibrahim Musa Unal & Ahmet Faruk Aysan, 2022. "Fintech, Digitalization, and Blockchain in Islamic Finance: Retrospective Investigation," FinTech, MDPI, vol. 1(4), pages 1-11, November.
    2. Mustafa Raza Rabbani & Shahnawaz Khan & Eleftherios I. Thalassinos, 2020. "FinTech, Blockchain and Islamic Finance: An Extensive Literature Review," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 65-86.
    3. Aprilia Candra Purnama Wati & Muhammad Yazid, 2023. "Blockchain Technology in Financial Transactions under Sharia Banking Practice," EkBis: Jurnal Ekonomi dan Bisnis, UIN Sunan Kalijaga Yogyakarta, vol. 7(2), pages 81-91.
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