Digital Transformation in Islamic Finance: A Critical and Analytical View PDF
Preview Digital Transformation in Islamic Finance: A Critical and Analytical View
‘The book can be considered a guiding companion for those who are concerned about fintech.’ Dr Mohd Daud Bakar, Founder of Amanie Group & International Islamic Finance Advisor ‘The book provides students, academics, scholars, and practitioners with a detailed description of theoretical and philosophical speculations on digital transformation in Islamic finance.’ Abu Umar Faruq Ahmad, Chair, Shariah Governance Curriculum Review Committee, AAOIFI ‘The book offers an important insight as to how technology is going to shape the future of finance.’ Professor Dr Mohammad Hashim Kamali, Founding CEO, International Institute of Advanced Islamic Studies (IAIS), Malaysia DIGITAL TRANSFORMATION IN ISLAMIC FINANCE The ongoing digital transformation is shaping the Islamic mode of fnancial intermediation and the impact on the faith-based fnancial mode has been mul- tifaceted. This has raised a host of interesting questions: what is the degree of penetration of Islamic fnance in the fntech industry? Are Islamic fnancial insti- tutions (IFIs) or banks ready to embrace fntech? Is fntech an enabler or barrier to achieve the intended purpose of Islamic fnance? Will technology narrow the division between Islamic and conventional fnance in the future? These are existential questions for Islamic fnance and the book endeavors to examine the impact of fnancial technology on the industry. The book assesses various fntech business models and how they could be a threat or an opportunity. It also examines whether fntech provides IFIs an edge to serve clients following the Shariah norms and how the adoption of fntech in the Islamic mode is required for meeting the maqasid Al Shariah. The book discusses applicability of fntech like blockchain, digital currency, big data, and AI to diferent branches of Islamic fnance. This book will interest students, analysts, policymakers, and regulators who are working on Islamic fnance, fnancial economics, Islamic economics, and development fnance. Yasushi Suzuki is a Professor at Ritsumeikan Asia Pacifc University, Japan. Mohammad Dulal Miah is an Associate Professor at the University of Nizwa, Oman. Islamic Business and Finance Series Series Editor: Ishaq Bhatti There is an increasing need for western politicians, fnanciers, bankers, and indeed the western business community in general to have access to high quality and authoritative texts on Islamic fnancial and business practices. Drawing on expertise from across the Islamic world, this new series will provide carefully chosen and focused monographs and collections, each authored/edited by an expert in their respective feld all over the world. The series will be pitched at a level to appeal to middle and senior manage- ment in both the western and the Islamic business communities. For the manager with a western background the series will provide detailed and up-to-date brief- ings on important topics; for the academics, postgraduates, business communi- ties, manager with western and an Islamic background the series will provide a guide to best practice in business in Islamic communities around the world, including Muslim minorities in the west and majorities in the rest of the world. Institutional Islamic Economics and Finance Edited by Ahsan Shafq Islamic Finance in the Financial Markets of Europe, Asia and America Faiza Ismail The Informal Economy and Islamic Finance The Case of Organization of Islamic Cooperation Countries Shabeer Khan Digital Transformation in Islamic Finance A Critical and Analytical View Edited by Yasushi Suzuki and Mohammad Dulal Miah For more information about this series, please visit: www.routledge.com/ Islamic-Business-and-Finance-Series/book-series/ISLAMICFINANCE DIGITAL TRANSFORMATION IN ISLAMIC FINANCE A Critical and Analytical View Edited by Yasushi Suzuki and Mohammad Dulal Miah First published 2023 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2023 selection and editorial matter, Yasushi Suzuki and Mohammad Dulal Miah; individual chapters, the contributors The right of Yasushi Suzuki and Mohammad Dulal Miah to be identifed as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identifcation and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Suzuki, Yasushi, editor. | Miah, Mohammad Dulal, editor. Title: Digital transformation in Islamic fnance : a critical and analytical view / edited by Yasushi Suzuki and Mohammad Dulal Miah. Description: First Edition. | New York, NY : Routledge, 2023. | Series: Islamic business and fnance series | Includes bibliographical references and index. | Identifers: LCCN 2022036670 | ISBN 9781032200910 (hardback) | ISBN 9781032200934 (paperback) | ISBN 9781003262169 (ebook) Subjects: LCSH: Finance—Islamic countries. | Banks and banking— Technological innovations—Islamic countries. | Financial institutions— Technological innovations—Islamic countries. Classifcation: LCC HG187.4 .D54 2023 | DDC 332.091767—dc23/ eng/20221006 LC record available at https://lccn.loc.gov/2022036670 ISBN: 9781032200910 (hbk) ISBN: 9781032200934 (pbk) ISBN: 9781003262169 (ebk) DOI: 10.4324/9781003262169 Typeset in Bembo by codeMantra CONTENTS List of figures xi List of tables xiii List of contributors xv Foreword xix Preface xxiii Acknowledgements xxv Introduction 1 Yasushi Suzuki and Mohammad Dulal Miah Part I Theoretical and philosophical speculations on digital transformation in Islamic finance 13 1 Digital transformation in Islamic finance: a critique of perfectionist’s views on Islamic fintech 15 Yasushi Suzuki and Mohammad Dulal Miah 2 A typology of financial business models on digital transformation (‘DX’): expected impacts on commercial banks 44 Yasushi Suzuki and Mohammad Dulal Miah 3 Fintech, technomania, and persistent socio-civilizational challenges 64 Mohammad Omar Farooq and Muhammad Dulal Miah viii Contents Part II Empirical studies 81 4 Business risk mitigation through “Value-Chain Integrated” financing in Islamic Peer-to-Peer Lending in Indonesia: PT Qazwa Mitra Hasanah’s experience 83 Sigit Pramono, Dikry Paren, M. Iqbal Ramadhan and Muhammad Razikun 5 Prospects and opportunities of Islamic crowdfunding in Bangladesh 101 S. M. Sohrab Uddin, Rima Akter and Md Imran Hossain Anik 6 Empirical assessment on digital transformation in Islamic banking 118 Abideen Adeyemi Adewale and Rifki Ismal 7 Fintech in Islamic banking in Bangladesh: opportunities and threats 142 Md. Joynal Abedin, Syed Mahbubur Rahman and Riyashad Ahmed 8 Exploring digital banking patronage in the Netherlands 154 Muhammad Ashfaq, Abdul Rauf, Mai Tran and Rashedul Hasan 9 Can Islamic FinTech best serve the migrants’ interest in remittance services? The South and Southeast Asian perspective 172 S. M. Sohrab Uddin and Tasfika Khanam 10 The impact of central bank digital currency (CBDC) on the operations of Islamic Banks 190 A.K.M. Kamrul Hasan 11 Takafultech reflects the Maqasid al-Shariah ethos in takaful 203 Amirul Afif Muhamat and Norfaridah Ali Azizan 12 Digital transformation and IFRS 17 accounting issues in takaful industry: the case of Indonesia 218 Ersa Tri Wahyuni Contents ix 13 Dilemma and challenges for fntech application in Waq f administration/regulation in contemporary Muslim majority countries: a case of Bangladesh 235 A. K. M. Kamrul Hasan 14 Breaking the barriers of Zakat management system through Islamic Fintech: the case of Bangladesh 251 S. M. Sohrab Uddin and Afroza Sultana 15 An inquiry into the application of artifcial intelligence on Fatwa 273 Ali Polat, Shoaib Khan and Usman Bashir Conclusion 288 Yasushi Suzuki and Mohammad Dulal Miah Index 297
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