ISLAMIC DIGITAL BANKING BASED ON MAQASID AL-SHARIAH FOR FINANCIAL INCLUSION

Abstract

The expansion of information and communication technology (ICT) has confronted the banking and financial industry towards the era of digitalization. This digitalization has brought advantages to the people nowadays to make the banking transaction easier in term of time-saving and easy to access compared to over-the-counter transaction (at the branch), in which the people need to waste their time for waiting their turn to make a simple transaction like withdraw and deposit money and reaching the people who are unbanked in order to them enjoy the banking and financial products and services. In this context, as most of the community in Malaysia are Muslim, the regulator (Bank Negara Malaysia) needs to concern with the value of Shariah and the element of financial inclusion that should be adopted in the development of digital banking. So, this will lead to the development of Islamic digital banking based on Maqasid al-Shariah for financial inclusion that able to cater the current market needs. However, the model of Shariah compliant digital banking is important to be introduced in order to achieve the true spirit of Maqasid al-Shariah for financial inclusion. This article is aimed to develop a framework of Islamic digital banking based on Maqasid al-Shariah for financial inclusion. This research employs a qualitative approach as this research is conducted through interview with experts for the development and verification of the proposed framework. The proposed framework has been found to be feasible for the implementation in accordance with the ongoing advancements in the digital age.