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Risk Management in Islamic Banking: The Impact of Financial Technologies through Empirical Insights from the UAE

Author

Listed:
  • Mohamed Al Hammadi

    (Department of Agricultural Economics, Finance and Accounting, Faculty of Law and Financial Economy, Universidad de Córdoba, 14071 Córdoba, Spain)

  • Juan Antonio Jimber-Del Río

    (Department of Agricultural Economics, Finance and Accounting, Faculty of Law and Financial Economy, Universidad de Córdoba, 14071 Córdoba, Spain)

  • María Salomé Ochoa-Rico

    (Research Departament, Faculy of Bussiness Administration, Universidad Ecotec, Samborondón 092302, Ecuador)

  • Orlando Arencibia Montero

    (Faculty of Economy, VSB—Technical University of Ostrava, 17 listopadu 2172, CP 70800 Ostrava, Czech Republic)

  • Arnaldo Vergara-Romero

    (Research Departement, Universidad Bolivariana del Ecuador, Durán 092405, Ecuador)

Abstract

Financial technology (fintech) innovations are transforming banking globally. Their adoption poses new opportunities and risks for Islamic banks with unique requirements. This study examines fintech’s implications for risk management effectiveness in United Arab Emirates Islamic banks. A conceptual model incorporates factors like fintech adoption, emerging capabilities, digital maturity, and IT security influencing outcomes. Primary data were collected via survey from nine UAE Islamic banks and analyzed using PLS-SEM. Results show that fintech adoption and capabilities positively impacted effectiveness, while digital transformation alone did not. The findings also show that the regulatory environment did not moderate relationships as hypothesized. The findings provide empirical evidence on optimizing risk management through responsible fintech enablement and oversight alignment in the UAE context.

Suggested Citation

  • Mohamed Al Hammadi & Juan Antonio Jimber-Del Río & María Salomé Ochoa-Rico & Orlando Arencibia Montero & Arnaldo Vergara-Romero, 2024. "Risk Management in Islamic Banking: The Impact of Financial Technologies through Empirical Insights from the UAE," Risks, MDPI, vol. 12(2), pages 1-15, January.
    • Handle: RePEc:gam:jrisks:v:12:y:2024:i:2:p:17-:d:1324511
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