Reality and Challenges of Adapting Financial Technologies in Islamic Banks: An Overview of The Arab Countries

Abstract

This study aims to explain what Financial Technology (Fin-tech) is, its advantages, and current financial platforms of Fin-tech for Islamic banks. The current study used descriptive methodology to analyze the reality and challenges of Fin-tech in Islamic banks. The study reached several conclusions including: that Fin-tech is important for financial inclusion in Islamic banks as it helps to reach all parts of the world, and all segments of society. Also, that although Islamic banks while suffering from a weak structure, they managed to open electronic windows for advanced services, rather than using traditional windows, where mobile banking was one of the most important advancements in this area. Finally, Islamic banks managed to establish several platforms for Fin-tech based on Islamic Sharia', which are still growing. On the other hand, some problems relating to adapting Fin-tech in Islamic banks in the Arab countries included mainly: the overall weak financial and organizational structures of Islamic banks which limit their ability to keep pace with other industries globally. The study recommended Islamic banks to work on rechanneling their funds into developing their technological infrastructure, the need to further develop financial platforms, additional training and education on crypto-currencies, and further discussions on how to develop these in accordance with Islamic Sharia'.