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FinTech Innovation and Islamic Finance: A Thematic Literature Review

Author

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  • Shahzadi Kanwal

    (School of Business and Computing, OLC Europe Ltd)

Abstract

Financial technology (FinTech) has emerged as a transformative force in global financial systems, reshaping traditional financial intermediation through digital innovation. Within Islamic finance, FinTech presents both significant opportunities and complex challenges, particularly in relation to Shariah compliance, ethical finance, and financial inclusion. Despite the rapid expansion of FinTech research, systematic synthesis focusing on its intersection with Islamic finance remains limited. This study conducts a Scopus-based systematic literature review using PRISMA guidelines and thematic analysis to examine FinTech innovation with specific relevance to Islamic finance. Drawing on peer-reviewed studies published between 2015 and 2024, the review identifies five dominant themes: regulatory innovation, blockchain and decentralised finance, financial inclusion, incumbent institutional adaptation, and artificial intelligence-driven finance. The findings reveal that while FinTech innovation aligns strongly with Islamic finance objectives such as risk-sharing, transparency, and inclusion, significant gaps persist in regulatory harmonisation, Shariah governance, and empirical impact assessment. The study contributes by offering an integrated conceptual framework for Islamic FinTech innovation and outlining a future research agenda aligned with the ethical and institutional foundations of Islamic finance.

Suggested Citation

  • Shahzadi Kanwal, 2025. "FinTech Innovation and Islamic Finance: A Thematic Literature Review," Journal of Islamic Banking, Economics and Policy, Islamic Finance Review Ltd, vol. 2(1), pages 66-85, December.
    • Handle: RePEc:epz:jibepj:v:2:y:2025:i:1:p:66-85
    DOI: 10.63740/eeccex16
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    Keywords

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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