Fintech Adoption in Islamic Banking: Implications for Achieving Sustainable Development Goals

Abstract

In the increasingly modern era, the digitization of the banking industry has been developing rapidly. Banks that fail to adapt to technological advancements tend to experience declining competitiveness, which encourages financial institutions to leverage digital technologies in their operations. Along with this development, several emerging financial technologies, such as Securities Crowdfunding (SCF) and Peer-to-Peer (P2P) finance, have gained significant attention. This study analyzes these technologies separately to examine their potential application within Islamic banking. This research employs a quantitative approach using correlation and one-directional analysis to address the research questions. The findings aim to explain Islamic banks’ perspectives on digital transformation and to identify the strategic direction adopted by Islamic banks in their digitalization efforts. The results reveal that, in general, the implementation level of emerging digital technologies in Islamic banking remains relatively low. An exception is mobile banking, which has been widely implemented due to the availability of established public infrastructure. It is expected that the findings of this study will encourage Islamic banks, particularly in Indonesia, to increase capital investment in digital innovation in order to enhance competitiveness with conventional banks and strengthen the sustainability of Islamic banking in the digital era.