Fintech and Islamic financial institutions: Applications and challenges

Fintech is revolutionizing the way consumers react to financial services offered, the channels of service delivery by financial institutions, and the process of regulating a series of emerging technologies by the regulators. Large, generally conventional, banks are believed to have strong technology infrastructure to support such a massive change, while Islamic financial institutions, with relatively smaller size and clustered operation, may find Fintech as a new challenge. Despite numerous published sources on Islamic banks’ exposure to Fintech, resources on the broader domain of Islamic financial institutions are relatively smaller. This chapter emphasizes this gap and points out how Islamic banks and their allied siblings are exposed to Fintech. We discuss points of convergence between Fintech and Islamic finance by taking examples from applications currently in existence. We also discuss relevant challenges.