Heliyon 8 (2022) e10385

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Heliyon
journal homepage: www.cell.com/heliyon

Review article

Fintech in islamic finance literature: A review☆

Muneer M. Alshater a, *, Irum Saba b, Indri Supriani c, Mustafa Raza Rabbani d
a
Faculty of Business, Philadelphia University, Amman, Jordan
b
Institute of Business Administration, Karachi, Pakistan
c
Department of Economics, Faculty of Economics and Business, Universitas Brawijaya, Indonesia
d
Department of Economic and Finance, College of Business Administration, University of Bahrain, Zallaq, Bahrain

A R T I C L E I N F O A B S T R A C T

Keywords: This study reviews Islamic FinTech research development from 2017 to 2022. The study adopts a hybrid approach
Islamic FinTech combining bibliometric and content analysis to reveal the current research trend of Islamic FinTech research.
Crowdfunding Using the Scopus database, we retrieve 85 documents and analyze them using RStudio and VOSviewer. The
Payments
content analysis categorizes the research output in Islamic FinTech into four distinct streams. The study finds
Blockchain
Cryptocurrency
potential for cointegrating FinTech into Islamic finance to benefit the unbanked and small-medium-size busi-
P2P lending nesses, the adoption of FinTech in Islamic finance will also help the government improve financial inclusion,
conquer financial crises, such as COVID-19, and achieve SDGs for a sustainable nation. However, the lack of legal
regulation and the lower financial literacy becomes the primary obstacle to the development of FinTech in Islamic
finance.

1. Introduction
FinTech (Financial Technology) is an emerging field within finance. It
refers to the use of technology to enable incremental or drastic im-
provements in financial services (Alshater and Othman, 2020; Thakor,
2020). The Financial Stability Board (2019) defines FinTech as “Tech-
nologically enabled financial innovation that could result in new business
models, applications, processes, or products with an associated material
effect on financial markets and institutions and the provision of financial
services”. Islamic FinTech is no different else than being compliant with
shariah and a special focus on Islamic compliant institutions or Islamic
countries (Alshater and Othman, 2020). The term “Islamic” stands to
differentiate between conventional and shariah-compliant FinTech oper-
ators. This differentiation is rational due to the many differences in
FinTech business models between the two systems. For example, profit
interest-based P2P lending, one of the most thriving business models in
FinTech, is fundamentally rejected in the Islamic finance system due to
(riba) being a primary prohibition in the system.
As Islamic Finance is now a $3 trillion industry with growing demand,
this puts a context of what Islamic FinTech might witness soon, given the
industry is already on the rise (Islamic Finance Development Report,
2019). Thus, studying the emerging industry dynamics becomes more
critical as FinTech aims are in line with the primary shariah objectives for
financial transactions. According to Thakor (2020), FinTech aims to
unveil cheaper ways to overcome financial contracting frictions and
lower the cost of financial services to improve consumer welfare; in a
similar vein, D. K. C. Lee and Teo (2015) defined FinTech's five princi-
ples: low-profit margin, light asset, expandability, innovation, and easy
compliance, which all are in line with shariah principles.
Fintech history starts as early as 1866, Consumer International (2017)
divided the FinTech developmental period into three phases. The first
phase between 1866 to 1967 was marked by trans-Atlantic cable and
telegraph as a means of financial communications. Between 1967 and
2008, the second phase saw the emergence of online banking and ATMs
where financial institutions started incorporating information technol-
ogy into financial products and services. The third phase, from 2008
onwards, is marked by the use of high-tech by newer entrants with
different characteristics, creating a new competitive landscape for
financial institutions. Palmi
e et al. (2020) state that the emergence rep-
resented an industry-wide system-level change that led to the inception
of new actors and the convergence of competencies. This intensive rise of
FinTech at the industry level, especially in major economies such as the
US, UK, China, and Germany, motivated researchers to investigate Fin-
Tech related topics from different dimensions. From the conventional

☆
This article is a part of the "Islamic finance in a post-COVID world" Special issue.
* Corresponding author.
E-mail address: muneermaher@gmail.com (M.M. Alshater).

https://doi.org/10.1016/j.heliyon.2022.e10385
Received 26 December 2021; Received in revised form 21 April 2022; Accepted 15 August 2022
2405-8440/© 2022 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
M.M. Alshater et al.
perspective, the literature is growing at a fast pace, so do various types of
reviews (Al-Sartawi et al., 2022; Li and Xu, 2021; Sangwan et al., 2020;
Suryono et al., 2020; Utami et al., 2021), in contrast from Islamic
perspective the pace is much slower, which motivated us to conduct this
study, as few reviews tried to catch up the progress including
non-directly related topics e.g (Rabbani et al., 2020). Our study is more
comprehensive in nature and scope as it focuses on reviewing all relevant
and published articles tackling compliant innovative technological ap-
plications concentrating on Islamic financial institutions.
This study makes several contributions to the existing literature. (1) It
is the first study to illustrate the basic characteristics of publications in
the Islamic FinTech domain, including the annual progress, the most
influential articles, and keywords co-occurrence, beside the development
of the research streams over the years. (2) Further, the study does a
comprehensive overview of the research publications in Islamic FinTech
and each category under it. (3) The study adopts a hybrid method
combining bibliometric methods and content analysis to review 85
studies from 2017–2022 (4) Finally, it provides an overview of the cur-
rent special environment of Islamic FinTech and the challenges faced by
besides providing suggested future research directions.
The remainder of this paper is organized as follows. Section 2 in-
troduces the data collection and research methodology. Section 3 pre-
sents the bibliometric results. Section 4 presents the content analysis. We
conclude the paper in section 5.
2. Review methodology
2.1. Methodology and study framework
The study uses various methods such as bibliometric analysis, content
analysis and SLR to provide a Quanti-qualitative perspective of Islamic
FinTech research development. Bibliometric is a quantitative analysis
that enables the researchers to discover the emerging trend of collabo-
ration networks and identify the intellectual structure of a certain field of
study (Liu et al., 2020; Donthu et al., 2021). This method is useful for
mapping the Islamic FinTech research based on statistical analysis.
Moreover, this study uses content analysis and SLR as it allows the
researcher to categorize the literature, analyze the gaps in existing
studies, and offer recommendations for the research topic (Paul and
Criado, 2020). The SLR used is based explicitly on the Preferred
Reporting Items for Systematic reviews and Meta-Analyses (PRISMA), a
well-suited method to synthesize the research finding from the most
impactful selected studies in this research field. We follow the PRISMA
guideline proposed by Moher et al. (2009) who divided PRISMA into four
main steps: identification, screening, eligibility assessment, and identi-
fication of the findings. This method assure transparency on how the data
is collected and the final number of papers included for review. We
employ RStudio software to achieve the following research objectives
(RO1.1 and RO1.2), whereas (RO1.3 and RO2) are addressed using
VOSviewer software. Following are the outlined objectives:
RO1. To evaluate the current publication trend of Islamic FinTech.
as answers to RO1 are rather quantitative in nature, hence, further
sub objectives are categorized as follow:
RO1.1. To present the performance of publication and citation
annually.
RO1.2. To identify the most influential studies based on the number
of citations.
RO1.3. To investigate the collaboration network globally.
RO2. To identify the main research themes from existing studies on
Islamic FinTech.
RO3. To analyze the primary result and limitations of the selected
studies.
2
Heliyon 8 (2022) e10385
RO4. To detect research gaps and provide recommendations for future
research.
2.2. Data source and collection
This study curated the data from the Scopus database, a well-known
and comprehensive database covering various social disciplines
including business and finance fields (Guckenbiehl et al., 2021). Alshater
et al. (2020) state that the Scopus database contains a greater number of
Islamic finance research than other databases such as Web of Science,
while it also indexes more well-validated studies than those solely
appearing on Google Scholar, EBSCO, or ProQuest. Moreover, several
previous review studies on Islamic economics, banking, and finance,
primarily relied on Scopus e. g Paltrinieri et al. (2020), M. K. Hassan,
Aliyu, et al. (2020), and Foglie and Panetta (2020). Figure 1 shows data
collection steps for bibliometrics and SLR with PRISMA. The biblio-
metrics analysis is used in this study to answer the RO1 and RO2,
whereas SLR-PRISMA is adopted to address the RO3 and RO4.
The first step of collecting the data is the identification of keywords
for the data curation process. The vast development of Islamic FinTech
literature which spans through multiple disciplines, including technology
and religion, resulted in challenges in identifying the right keywords. As
Lee and Shin (2018) described, there are six business models of FinTech,
including lending, capital market, insurance services, wealth manage-
ment, payment, and crowdfunding. In detail, Laidroo et al. (2021)
identified seven activities of FinTech, including, (1) Payment activity
refers to the online and mobile payment model; (2) Deposit and lending
activity which covers the crowdfunding model, peer-to-peer lending,
microlending, and consumer financing model; (3) Investment manage-
ment activity which covers Robo-advice, social trading, and automated
advice model; (4) Distributed ledger technology activity which covers
digital currency and blockchain model; (5) Banking infrastructure ac-
tivity covering user interface and open banking model; (6) Analytics
activity; and (7) Insurance.
Given the consideration of previous explanation, the selected key-
words in this study were identified by conducting a pre-simulation to
assure that the keywords cover most of the existing studies related to
Islamic FinTech. Moreover, the selection of keywords also referred to
previous scientometric research by various researchers who tried to
cluster the knowledge in this area, for example, Liu et al. (2020), sug-
gested including the words P2P, crowdfunding, blockchain, crypto-
currency, robo-advisors, and mobile payment, as they are related to
FinTech business model.
Guided by the previous literature, therefore, the study applied several
important search keywords including, “Fintech” OR “Financial Tech-
nologies” OR “Financial Technology” “finance technology” OR “Islamic
Fintech” OR “Blockchain” OR “Digital Finance” OR “P2P” OR “P2P
Lending’ OR “Credit Scoring” OR “Robo Advisor” OR “Insurenctech” OR
“Smart Contract*” OR “Bitcoin” OR “Crowdfunding” OR “Crypto* OR
“Financial Inclusion” in the Article Title, Abstract, Keyword. These key-
words were further combined with another set of keywords, namely.
“Islam*” OR “Shariah” OR “Shari'ah” to represent Islamic FinTech. In
result, at the first stage of data curation, we obtain 265 documents.
Moreover, as this study strive to investigate the existing studies on Fin-
Tech within the Islamic view, we conducted another data search using
“Financial Inclusion” in the Article Title, Abstract, Keyword, followed by
two search field by using “Islam*” OR “Shariah” OR “Shari'ah”, AND
followed by “fintech” OR “finance technology” OR “financial technologies”
OR “digital finance” in the Article Title, Abstract, Keyword, to collect
related articles. Thus, at the second stage of data curation, we obtained
11 documents. The data of this study retrieved the data from the Scopus
database in February 2022 and resulted in 276 documents.
The second step is data screening. The selected articles from the
previous step are filtered based on specific criteria described in Figure 1.
Hence, 159 out of 276 documents were excluded as it does not satisfy our
M.M. Alshater et al. Heliyon 8 (2022) e10385

Keywords identification; 2 stage of search fields

Identification
within “Article title, Abstract, Keywords”

Records identified from Records removed before screening;

Scopus Databases on without set time limit for
February 2022: n = 276 publication: n = 0

Records excluded: n = 159

The inclusion criteria:
Screening

1. Subject area: Business,

Records screened based on Management and Accounting;
inclusion criteria: n = 276 Economics, Econometrics and
Finance; Social sciences; and
Decision sciences.
2. Document type: article &
review
3. Source type: Journals
4. Language: English
Eligibility

Full-text articles assessed for Full-text articles excluded with

eligibility: n = 117 reasons: n = 32

Studies included in review: n =

Included

85

Figure 1. Prisma flow diagram showing article selection process.

screening criteria; this step leaves 117 potentially relevant studies. Pre-
vious SLR studies on Islamic banking and finance, such as Narayan and
Phan (2019), Khan et al. (2020), and Foglie and Panetta (2020) sug-
gested only including the articles published by highly ranked
peer-reviewed journals, measured by an A and A* rank indexed by ABDC
journal list or two star and above on the ABS list however, due to the
limited number of articles in Islamic FinTech published in these outlets,
this study relied only on the Scopus database for selecting documents.
The third step is reviewing the articles to satisfy the eligibility of
inclusion in the review, by reviewing the full text of the paper. The cri-
terion in this step refers to the article's content where we followed
Lundberg et al. (2006) in hiding the article's identity suggestion,
including journals and authors' names, to avoid subjectivity in manual
refinement, also using the following inclusion criterion: (1) Studies
related to Islamic FinTech; (2) Studies discussing the role and impact of
Islamic FinTech in business, Islamic economics, philanthropy, banking,
stock market, and halal industry; and (3) Studies investigate one of the
business models of Islamic FinTech. While the exclusion criterion is: (1)
Studies discuss other topics as the study's objectives, while Islamic Fin-
Tech has a small part of the study; and (2) Studies that did not offer
substantial insights into Islamic FinTech. The full-text analysis has
excluded 32 articles from 117, leaving 85 articles for the final evaluation.
The final step is categorizing and summarizing literature findings. In
this step, we extracted the substantial findings of previous studies and
presented them in tables and discuss them. Moreover, we analyze the
research gaps, limitations, and identify the direction for future research,
for early career researches in fintech and Islamic fintech.
3. Results
The Statistical analysis of Islamic FinTech publications is measured
using bibliometrics analysis to answer RO1 and RO2. Publication trend is
frequently used to present the current development of a discipline and
scientific output (Liu et al., 2020). The general performance analysis is
presented to address RO1, whereas RO2 is answered by utilizing
co-occurrence author keyword and co-word analysis on the article's title
and abstract.
3.1. General performance
3.1.1. Analysis of the overall growth trend
This section explains the data utilized in this study. According to our
dataset, the first publication related to Islamic FinTech was in 2017.
Since then, 85 articles have been published by 52 journals. Moreover,
205 authors have worked on FinTech related articles, out of whom 10
have worked independently, while the rest have collaborated in con-
ducting the research. The collaboration index is relatively high at 2.83
points. Hence, the high percentage of multi-authored documents and
collaboration index is associated with the interdisciplinary nature of Is-
lamic FinTech with other disciplines such as business and economics,
finance, law, shariah, and information technology.
Figure 2 reflects the yearly trend of Islamic FinTech publications and
citations between 2017 to 2022. In terms of citation performance, the
trend remained stagnant during 2017–2019, the 85 articles on Islamic
FinTech have been cited 332 times. In sum, this study expects that the
total publication and citation of Islamic FinTech would significantly in-
crease in the next five years given the increasingly moving average trend
and the massive escalation of Islamic FinTech in terms of asset and
performance.
3.1.2. Analysis of the influential articles
Table 1 present the most cited articles based on the criteria of a
minimum of ten citations from the Scopus database. This current study
measured the impact of the articles based on global citation. Global ci-
tations assess the performance of an article based on the total citations
from a variety of disciplines and articles (Agbo et al., 2021). According to
Table 1, the article authored by Mensi et al. (2020) has the highest ci-
tations among the articles published by Scopus indexed journals. This
study examines the relationship between bitcoin, the Islamic stock
market, and Sukuk.

3
M.M. Alshater et al. Heliyon 8 (2022) e10385

300
212
250
200
150
100 43
39
31 34
50 18
13 11
2 4
0 same time, the most widely used keywords are bitcoin, cryptocurrencies,
2017 2018 2019 2020 2021
Total Document Total Citation
Figure 2. The number of growth and trend of published articles and cita-
tion 2017–2022.
3.1.3. Analysis of the collaboration network
Paltrinieri et al. (2020) stated that identifying the co-authorship
analysis will help researchers build their research collaboration and
result in higher quality papers. It offers a broad and cross-countries
perspective. The distance between nodes represents the linkage be-
tween the countries, and the smaller distance indicates the higher linkage
and the strong relationship between them (Van Eck and Waltman, 2014).
Figure 3 describes the research collaboration amongst countries on Is-
lamic FinTech with a minimum of one publication. It also illustrates that
the country's collaboration network was divided into five clusters.
Malaysia was cited as the centre of collaboration with the United States,
Indonesia, Bangladesh, Japan, and Finland's research partnership in the
green cluster. This result implies that these countries have published a
similar topic of discussion on Islamic FinTech. Furthermore, the short
distance nodes between Malaysia United Arab Emirates (UAE) (in the
cluster red) indicated that these countries tend to conduct joint research
partnerships. Malaysia and the United Kingdom are also present the
closer nodes. Thus, the collaboration network between these two coun-
tries is of relative strength.
Moreover, the red cluster consists of eight countries with similar topic
interests, namely, France, India, Oman, Palestine, Luxemburg, Russian
Federation, and UAE. Furthermore, Australia, China, Pakistan, South
Korea, the United Kingdom, and Vietnam were found in cluster blue.
These countries have a strong connection with Malaysia, Saudi Arabia,
and Italy as their research partners. Besides, in the yellow cluster, Can-
ada, Greece, Italy, Malta, and Morocco tend to have a common research
topic. Finally, Saudi Arabia, Kuwait, Tunisia, and Bahrain were found in
the purple cluster. In conclusion, research related to FinTech and the
Islamic finance industry has spread globally and attracted researchers
from various countries, including non-Muslim majority countries.
3.2. Research main theme
The most discussed topics in Islamic FinTech research are presented
using keyword co-occurrence analysis. The mapping analysis visualises
the most common topic based on the co-occurrences of keywords (Baker
et al., 2020). Figure 4. describes the keyword occurrence: author key-
words by setting the minimum occurrence of word is two times. Based on
the figure, this study confirms that there are four clusters. The most
frequently used keywords in the red cluster are FinTech, Islamic finance,
0
Islamic bank, financial inclusion, riba, and customer retention. At the
3
2022
blockchain, gold, Malaysia, smart contract, and COVID-19 in the yellow
cluster. In the blue cluster: cryptocurrency, shariah compliance, trust,
precious metal, security, system and technology, and SEM become the
highly used keywords. Lastly, in the green cluster: Crowdfunding, Islamic
crowdfunding, Indonesia, TAM, and SME are the most appear keywords.
Based on the keyword's occurrence, the red cluster is related to the
adoption of FinTech in Islamic financial institutions while the yellow
cluster mainly examines the correlation between FinTech's products and
the Islamic stock market. The studies on the blue cluster cover the studies
related to the shariah compliance and customer's trust in FinTech. Lastly,
the green cluster analysis of the technology acceptance of FinTech in
SMEs.
This study also offers analysis of the trending topics over the years.
Van Eck and Waltman (2014) underlined that co-word analysis on the
article's title and abstract could be constructed and visualized to reveal
the research main theme clusters based on research topic similarities. The
darker nodes and links designate the past topics. By analysing the key-
words, as shown in Figure 5 studies related to the concept of financing
and payment in the Islamic FinTech platform are the oldest topics. While
the most recent topics on Islamic FinTech covers studies related to
financial inclusion, social implication, role, intention, benefit, and
COVID-19. Moreover, intention, ease, sample, factor, and determinant
also dominated the latest topic. Hence, it can be concluded that research
exploring the contribution of FinTech and the intention to adopt FinTech
in the Islamic finance industry has become a recently discussed topic.
4. Content analysis of Islamic FinTech publications
This section is divided into two sections. The first section addresses
the RO3 which categorize the literature into four distinct streams
namely: (1) Financial technology (consists of two sub-streams: Customer
perception on Islamic FinTech and Islamic FinTech's current develop-
ment and its impact on Islamic finance institutions); (2) Islamic FinTech
and distributed ledger technology (consist of two sub-streams: Crypto-
currency and Blockchain), (3) Financial inclusion; and (4) Islamic Fin-
Tech and deposit-lending (consist of two sub-streams: P2P Lending and

Table 1. Top influential articles on islamic FinTech

Author Title GC
(Mensi et al., 2020) Does bitcoin co-move and share risk with Sukuk and world and regional Islamic stock markets? Evidence using a time-frequency approach 26
(Rabbani et al., 2020) FinTech, blockchain and Islamic finance: An extensive literature review 21
(Haider et al., 2020) An artificial intelligence and NLP based Islamic FinTech model combining zakat and Qardh-Al-Hasan for countering the adverse impact of 21
COVID 19 on SMEs and individuals
(M. K. Hassan, Rabbani, Challenges for the Islamic Finance and banking in post COVID era and the role of Fintech 19
et al., 2020)
(Rosavina et al., 2019) P2P lending adoption by SMEs in Indonesia 17
(Rehman et al., 2020) Do Islamic indices provide diversification to bitcoin? A time-varying copulas and value at risk application 16
(Siswantoro et al., 2020) The requirements of cryptocurrency for money, an Islamic view 11
(Lahmiri and Bekiros, 2019) Decomposing the persistence structure of Islamic and green crypto-currencies with nonlinear stepwise filtering 10
(Abdullah and Oseni, 2017) Towards a sharı’ah compliant equity-based crowdfunding for the halal industry in Malaysia 10

Note: GC ¼ Global citation.

4
M.M. Alshater et al.
Figure 3. Collaboration network map of countries.
Crowdfunding). The second section explains the research gap and future
research recommendations to answer the RO4.
4.1. Content analysis
4.1.1. Stream 1: financial technology
This stream consists of 20 articles that can be divided into two sub-
streams: Customer perception on Islamic FinTech, its current develop-
ment, and its impact on Islamic finance institutions.
The first sub-stream is related to customer perception. Most of the studies
measure customer perception of Islamic FinTech through customer
intention on using Islamic FinTech (Darmansyah et al., 2020; Oladapo
et al., 2021); customer's acceptance (I. M. Shaikh et al., 2020); customer's
satisfaction (Baber, 2019); customer's retention (Baber, 2020b, 2020c);
and customer's trust (M. Ali et al., 2021). FinTech in Islamic finance in-
stitutions provides four types of services: payments, crowdfunding,
advisory, financing, and compliance (Baber, 2020b). Several key factors
are affecting customers' intention to use Islamic FinTech based on pre-
vious studies:
First, shariah compliance. There is still debate amongst the scholars
and practitioners about whether religiosity drives the customers to use
Islamic banking, a study by Baber (2020b) and Marzuki and Nurdin
(2020) proved that Islamic banking customers have a strong concern
toward shariah-compliance of FinTech products. Moreover, Baber (2019)
correctly argues that shariah-compliance of FinTech services becomes a
crucial factor in customer satisfaction. Thus, to maintain the customer's
loyalty and satisfaction, the quality and performance of Islamic banking,
specifically mobile banking, should improve immensely. Hence, the re-
sults of these studies call attention to enhancing the roles of the shariah
supervisory board in ensuring the services meet Islamic principles.
Second, is the ease of use. An interesting study by Darmansyah et al.
(2020) concludes that the technology acceptance model becomes the
most significant factor influencing customers’ intention in using FinTech,
particularly in P2P services. In detail, I. M. Shaikh et al. (2020) ascer-
tained that perceived ease of use and usefulness play an important role in
shaping customer intention. In the same vein, Baber (2019) also argued
that apps design has massively increased customer satisfaction in using
Islamic FinTech. Besides, M. Ali et al. (2021) pointed out that the secure
Islamic FinTech apps and operations increase customer trust in accessing
Islamic FinTech. Hence, the key implication drawn from these studies is
the importance of user experience in using Islamic FinTech. Thus, Fin-
Tech providers should pay more attention to improving FinTech apps and
websites quality by considering the customer needs and prevailing
innovations.
Third, is customer knowledge. Oladapo et al. (2021) put forth that
customers' knowledge of Islamic FinTech is significantly related to the
increasing customer's intention to utilise FinTech. Moreover, the result is
also supported by Baber (2020c), who assured that providing adequate
information regarding Islamic principles will enhance the customer's
satisfaction. These studies clarify that banking practitioners and opera-
tors should regularly attend training, seminars, and conferences to
5
Heliyon 8 (2022) e10385
update their capacity to offer customers comprehensive knowledge
related to FinTech.
The second sub-stream addressed Islamic FinTech development and its
impact on Islamic finance institutions. Rabbani et al. (2020) conducted a
systematic literature review to synthesize Islamic fintech; they found that
three dominant topics have been widely discussed: Islamic FinTech op-
portunity and challenges, cryptocurrency/blockchain shariah compli-
ance, and the law/regulation aspect of fintech innovations. this study
underlined that FinTech offers more cost-effective financial services than
traditional finance and banking. Based on a country level Muryanto et al.
(2021) stated that Indonesia, as the largest Muslim population country,
has massive potential to elevate the economic growth by utilizing Islamic
FinTech. Moreover, this study also describes several challenges in Islamic
FinTech's development, including weak regulation, inefficient permit
procedures, and a higher rate of illegal FinTech practices. Another study
Almulla and Aljughaiman (2021) documented that the massive growth of
FinTech firms negatively affects conventional and Islamic banks' per-
formance, measured by the declining ROA and ROE rates. These studies'
findings illustrate the possibility of financial institutions shifting from
banking to FinTech firms, highlighting disruptive technology's negative
impact on traditional financial institutions.
On the other hand, numerous studies have investigated FinTech
practices adoption's impact on Islamic finance institutions' performance,
specifically Islamic banks and microfinance institutions. Mustafa Raza
Rabbani and Khan (2020) underlined that FinTech could significantly
decrease the operational cost of Islamic banking, which will allow it to
offer more competitive products. Moreover, Selim (2020) ascertained
that implementing FinTech in foreign currency transactions by Islamic
banks would increase their market share. In return, Islamic banking can
provide non-interest rate transactions in real-time and without riba.
Moreover, Altwijry et al. (2021) conducted an interesting discussion
regarding the shariah-based FinTech money creation. This study empha-
sized the validity and credibility of Islamic banking to adopt FinTech in
their services, answering a debate about whether Islamic banking is
necessarily creating money to support their business. This study un-
derlines that Islamic bank should fully enhance their ability to adapt
Sharıah-compliant FinTech.
Moreover, in the case of Islamic microfinance, S. A. Shaikh (2021)
explained that FinTech would enable Islamic microfinance to obtain a
broader range of fund providers, increase transparency, decline the
transaction cost, support the customer's monitoring process, and increase
the accuracy in screening criteria. However, research by X. Wang et al.
(2021) reported that the Islamic bank's investment in FinTech has not yet
been effective; this indicates that there are still areas that require
improvement. The result of this study is also supported by Nastiti and
Kasri (2019), who declared that the policy-maker should make a stren-
uous effort to establish a supportive investment environment for an Is-
lamic bank to adopt FinTech. In short, the adoption of FinTech will
elevate the development and efficiency of Islamic financial institutions,
which will lead to the improvement of Islamic finance institutions' role in
economic growth. Hence, a solid collaboration amongst the stakeholder
is crucial.
Despite the massive growth of Islamic FinTech, one of the biggest
obstacles in its way is the lack of specific legal law from policymakers.
Nurhasanah and Rahmatullah (2020) from Indonesia revealed that the
Islamic FinTech providers are still behind in terms of regulation, law, and
operational rules compared with their conventional counterparts. The
uncertainty of the legal law of Islamic FinTech has also resulted in the
weak security of customers' data and the increasing number of illegal
FinTech. Moreover, the ineffective role of shariah supervisors as regu-
lating authorities has also become the primary reason that hinders the
growth of FinTech's start-up (Ilyas et al., 2020; Tajudin et al., 2020). In
the Malaysian case, the government has set a specific target to digitalize
the financial industry, which breaks down to the liberation of specific
areas, including insurance, trading assistance, Robo-advisory, and P2P
lending. By analyzing the development of FinTech start-ups in Malaysia
M.M. Alshater et al.
Table 2. Financial technology.
Paper Info Purpose
Customer Perception on Islamic FinTech
(Baber, 2020b) This paper investigates the impact of
FinTech applications and crowdfunding
on customer retention in Islamic
banking.
(Marzuki and This paper examines the influencing
Nurdin, 2020) factors of customers to use Islamic
FinTech services.
(Baber, 2019) This research assesses the correlation
between FinTech service quality
towards customer satisfaction in Islamic
banking.
(M. Ali et al., This research aims to reveal the
2021) influence factors of perceived benefits
and perceived risk on Islamic FinTech,
and what impact customers' trust and
intention to use Islamic FinTech.
(Darmansyah This paper analyses the determinant
et al., 2020) factors of behavioral intention in using
Islamic FinTech in Indonesia.
(I. M. Shaikh This paper investigates the influencing
et al., 2020) factors of Islamic FinTech acceptance in
Islamic banking.
(Oladapo et al., This research investigates the
2021) perception of Islamic bank customers in
Malaysia and Saudi Arabia regarding
the adoption of Islamic FinTech.
(Baber, 2020c) This study shed light on the impact of
FinTech on customer retention in an
Islamic bank.
Methodology
A quantitative approach
based on structured
questionnaires.
A quantitative approach
based on structured
questionnaires
A quantitative approach
based on questionnaires.
Partial-least squares
structural equation
modeling (PLS-SEM) based
on questionnaires.
Structural Equation
Modelling (SEM) approach.
SEM approach.
PLS-SEM based on
questionnaires.
A quantitative approach
based on non-probability
sampling.
6
Heliyon 8 (2022) e10385
Results Dropout
* Islamic FinTech provide four types of The empirical study sample is based on
services, namely, payments, advisory, Malaysia and the United Arab Emirates;
finance, and compliance. thus, the result of this study cannot be
* The finance application of FinTech does generalized.
not have a significant impact in forming
customer satisfaction.
* Crowdfunding services have massively
increased due to attracting start-up who
provide new ways of raising funds.
* Shariah-compliant is the most important This study was specifically conducted in
factor in adopting Islamic FinTech. Indonesia. Thus, the suggestions might not
* Social environment has less impact in be applicable to other societies.
attracting the customer's intention to use
Islamic FinTech products.
* Emphasized that shariah-compliant The result of this study cannot be
services become one of the most critical generalized since it is only utilized
factors affecting customer satisfaction. Malaysian customers' data.
* FinTech app designs, reliability, and
fulfilment of transactions and promises
significantly impacted customer
satisfaction.
* Emphasized that economic benefit has This study focused on perceived risk and
the strongest impact in shaping perceived benefit. TPB and Technology Acceptance
benefit for Islamic FinTech users. Model (TAM) should be adopted to
* Legal risk has become the most investigate the customer intention in
prominent factor that affects perceived FinTech.
risk on Islamic FinTech.
* Islamic FinTech users are more
concerned about perceived risk compared
to perceived benefits.
* Trust in Islamic FinTech was negatively
affected by perceived risk and positively
impacted by perceived benefits.
* Trust has become the key important
factor influencing the intention to use
Islamic FinTech.
* The adoption of FinTech in Islamic This study covers only Indonesian users;
finance institutions should pay more thus, the practical implication cannot be
attention to non-financial benefits that generalized.
will obtain by the customers.
* Perceived ease of use, usefulness, and
social norm become the most prominent
factor forming behavioural intention to
use three types of Islamic FinTech
services: payment, crowdfunding, and
peer-to-peer lending (P2P).
* Customer innovativeness has become The respondents of this study are from
the most crucial factor that facilitates upper educational background, (under-
Islamic FinTech acceptance. graduate and post-graduate levels). Thus,
* Bank managers consider the customer's the result cannot be generalized for
perception of FinTech innovation by uneducated customers.
involving them in product research and
development.
* Knowledge, attitude, and social norms This study underlines that the result for
become the most prominent factors Malaysian and Saudi Arabian is different.
influencing Islamic FinTech. Thus, the practical implication of this study
* The determinant factors of customers' might be inefficient for other countries.
perception are different between Malaysia
and Saudi Arabia.
* This study highlighted the importance of
customers' knowledge regarding Islamic
FinTech; thus, the practitioners and the
operators should provide a
comprehensive and good image of Islamic
banks.
* The adoption of FinTech in Islamic This study would be more useful if it had
banking has significantly impacted discussed the result comprehensively and
shaping customer retention by offering applicable for practitioners, particularly
payment, advisory, and shariah Islamic bank managers.
compliance services.
* Islamic banks should provide easy and
convenient FinTech services and religious
information such as the time of prayer.
(continued on next page)
M.M. Alshater et al.
Table 2 (continued )
Paper Info Purpose
Islamic FinTech development and its impact on Islamic Finance Institutions
(Rabbani et al., This study aims to assess the current
2020) development of Islamic FinTech
literature.
(Muryanto et al., This study assesses the prospects and
2021) challenges of Islamic FinTech
development in Indonesia.
(Almulla and This paper examines the impact of
Aljughaiman, FinTech firms and services on Islamic
2021) and conventional banks' performance.
(Rabbani and This study discusses the impact of
Khan, 2020) FinTech on Islamic banking
development in Bahrain.
(Selim, 2020) This paper examines the adoption of
FinTech to eliminate interest rates or
riba in foreign currency transactions by
Islamic banking.
(Altwijry et al., This study aims to construct Sharıʿah-
2021) based FinTech Money Creation Free
model for Islamic banking.
(S. A. Shaikh, This study proposes a hybrid model of
2021) Islamic microfinance and FinTech to lift
the efficiency and contribution of
Islamic microfinance.
(X. Wang et al., This study investigates the effect of IT
2021) investment on the performance of
conventional and Islamic banks
performance.
(Nastiti and This study assessed the effectiveness of
Kasri, 2019) branchless banking (FinTech)
regulation on Indonesian Islamic banks.
(Nurhasanah and This study investigates the existing law
Rahmatullah, and regulation of Islamic FinTech
2020) protection in Indonesia.
Methodology
A systematic review on 113
article sources from SSRN,
Research Gate. Google
Scholar, and others.
A qualitative method based
on statute and conceptual
approach.
GMM regression.
Qualitative and literature
review.
A qualitative method based
on hadith.
literature review, content
analysis, and semi-
structured interview.
Mathematic model and
empirical estimation based
on micro panel data.
Generalized method of
moments (GMM)
regression.
Liner regression with
generalized least square
estimation.
Juridical-normative with a
qualitative approach
7
Heliyon 8 (2022) e10385
Results Dropout
* This study highlights three common This study does not clearly state the data
topics discussed in the Islamic FinTech selection criteria, which become crucial in a
research area: Islamic FinTech systematic review to avoid the researcher's
opportunities and challenges, biases. Moreover, this study does not
cryptocurrency/blockchain shariah provide recommendations for the
compliance, and law/regulation. government or future research directions
* Islamic FinTech enhances financial for researchers.
institution performance by increasing
efficiency, transparency, and customer
satisfaction at an affordable cost.
* The regulatory framework should be
designed to support the improvement of
Islamic FinTech, specifically for Muslim
customers.
* Indonesia has become a promising This study focuses on Islamic FinTech in
country in terms of Islamic FinTech Indonesia. Thus, the finding does not
development. represent other countries.
* Indonesia urgently needs an Act with
specific regulations centralized and legal
to escalate Islamic FinTech's development
significantly.
* This study affirmed that the massive The research will be more insightful if it
growth of FinTech firms has significantly contrasts the performance of Islamic banks
decreased the Islamic and conventional that have implemented FinTech with those
bank's performance, measured by return that have not.
on asset and return on equity rates.
* FinTech has a significant impact in This study does not provide a
enhancing the Islamic bank's performance comprehensive discussion of existing
and efficiency by reducing operational literature.
costs.
* FinTech, artificial intelligence, and
blockchain will re-shape Islamic banking
development.
* Islamic banking should provide foreign This study focused on the mathematical
currency transactions by integrating model of eliminating riba on foreign
FinTech interest-free foreign exchange currency transactions by Islamic banks.
bank machines (IffexBM), which allows However, the discussion on quantitative
the transaction at the current time analysis and how it will be implemented
without any markup prohibited in Islam. lacks explanation.
* The implementation of IffexBM will
increase the market share of Islamic
banking.
* The collaboration between FinTech and The study lacks a comprehensive
Islamic banking will engage the explanation in implementing the model.
customer's trust and confidence towards
the shariah compliance of Islamic banking.
* The implementation of FinTech should This paper does not undertake the opinions
be backed by non-financial support in the of shariah and IT expert to assess the
pre-financing stage, financing stage, and credibility of the model based on shariah
post-financing stage which will offer compliances and technology security.
deeper understanding and improve the
community's financial literacy, especially
for the poor and unbanked people.
* FinTech provides a solid solution in
boosting the sustainability of Islamic
microfinance.
* This study argues that Islamic banking This study is focusing on three countries,
has misallocation in investing in FinTech. namely Sri Lanka, Bangladesh, and
* Investing in FinTech does not present Pakistan. Thus, the result cannot be
significant benefits for Islamic banking generalized.
regarding intellectual capital and
competitive advantage.
* The cointegration of FinTech in Islamic The study claimed that the ineffective
banking does not yet support by solid contribution of FinTech is caused by the
regulation and a productive environment. small number of Islamic banks that have
adopted it; however, it did not address
potential solutions.
* It argues that there is a lack of clear and This study critically discussed the legal
comprehensive regulation for Islamic protection of Islamic FinTech in Indonesia.
FinTech. Thus, Islamic FinTech still A future cross-country study should be
adopts conventional FinTech's regulation. conducted.
* The existing regulation failed to avoid
customer data misuse in illegal instances.
(continued on next page)
M.M. Alshater et al.
Table 2 (continued )
Paper Info Purpose Methodology
(Razak et al., This study analyzes the need for shariah Qualitative approach.
2020) regulation for Islamic FinTech in
Malaysia.
(Tajudin et al., This study offers practical implications A qualitative approach
2020) for the stakeholders in elevating Islamic based on literature reviews,
FinTech performance by asses four conceptual analysis, and
FinTech start-ups in Malaysia and case study.
Finland.
and Finland, this study tells us that special committees and legal laws are
required to drive Islamic FinTech development. Table 2 further sum-
marizes the prior literature in this stream.
4.1.2. Stream 2: Islamic FinTech and distributed ledger technology
This stream consists of 33 studies and is divided into two sub-streams:
Cryptocurrency (25 articles) and Blockchain (8 articles). The list of ar-
ticles in this stream is presented in Table 3.
The first sub-stream is about the cryptocurrency literature; it mainly
discusses the role of cryptocurrency from a shariah centric perspective
and the risk-return tradeoff of cryptocurrencies (Ajouz et al., 2020;
Hammad, 2018; Lietaer, 2017; Oziev and Yandie, 2018; Saleh et al.,
2020; Siswantoro et al., 2020; Virgana et al., 2019; M. Abubakar et al.,
2019; N. Khan et al., 2020; Lahmiri and Bekiros, 2019; Lahmiri et al.,
2020; Mensi et al., 2020; Rehman et al., 2020). Islamic finance does not
consider money as a subject matter of trade but as a medium of exchange.
However, the introduction of digital currencies has renewed the debate
on the status of money and its dynamics, especially within the context of
digital currency, i.e., cryptocurrency. In this regard, Oziev and Yandie
(2018) critically analyzed bitcoin's nature and features and identified no
contradiction of bitcoin with Islamic laws. Much has been written about
the status of money and its role in the overall economy after the seminal
work of Nakamoto in 2008 (Figuera and Tortorella Esposito, 2019;
Mohamad and Sifat, 2017; Oberauer, 2018).
Nevertheless, cryptocurrencies are heavily criticized for their func-
tional point of view for the following main reasons (Abozaid, 2020; Y. S.
Abubakar et al., 2018). First, all the products within the nomenclature of
cryptocurrency are derived from financial engineering without being
backed by real economic assets; thus, it does not fit within Islamic
finance. Islamic finance proposes financial intermediation based on real
tangible assets, which naturally strengthen the economy and make it
more resilient during economic turmoil. Secondly, Islamic finance does
not allow transactions based on interest and speculation (M. K. Hassan
et al., 2019). Also, recent studies show that cryptocurrencies are ineffi-
cient (Bariviera, 2017; Nadarajah and Chu, 2017; Tiwari et al., 2018),
highly volatile and speculative (Cheah and Fry, 2015; Elsayed et al.,
2020; Katsiampa, 2017), very sensitive to macroeconomic factors (Demir
et al., 2018; P. Wang et al., 2020), and lacks flexibility and acceptability
(Hanif, 2020), it cannot be used as a medium of exchange on the ground
because of its speculative nature (Baur et al., 2018). Thirdly, crypto-
currencies are also used in illegal activities such as money laundering and
purchasing drugs and weapons (Hammad, 2018). Cryptocurrencies are
type of digital currencies that are generally not asset-backed or issued by
any central bank, so it doesn't have the same features of fiat money. Lastly
and very importantly, due to the aforementioned factors, cryptocurren-
cies are not directly backed by any country or regulatory body, unlike fiat
money which has implications for monetary policy. If central bank
money no longer defines the unit of account for most economic activities
8
Heliyon 8 (2022) e10385
Results Dropout
* This study underlines that there are at This study only represents Malaysian
least three types of k regulation for Islamic context.
FinTech, including improving the
qualifications of the shariah advisory
council.
* FinTech players' ability to maintain and The result of this study may have been more
improve customer engagement, service applicable if it included more variety of
quality, cohesive company's culture in Islamic FinTech companies from Muslim
various geography, and adaptive Majority countries. Furthermore, this study
innovation become the prominent factor does not propose a model for establishing a
in FinTech expansion. sustainable FinTech company.
* This study calls attention to utilizing
zakat, waqf, and sadaqah as additional
funds for Islamic FinTech.
* The Shariah Committee has a significant
role in assuring the shariah compliances of
Islamic FinTech.
and if crypto assets instead provide those units of account, the central
bank's monetary policy becomes irrelevant. Moreover, most developing
countries are heavily dependent on foreign currency reserves to meet
their fiscal deficit and debt obligation. This provides an analogy to
cryptocurrency and may disconnect the monetary policy in local currency
from the local economy. This dilemma will remain in developing coun-
tries if a global digital currency is not introduced.
Siswantoro et al. (2020) investigated a class of 23 different crypto-
currencies and asserted that cryptocurrencies are highly volatile and
cannot become alternative fiat money in Muslim countries. Specifically,
Kirchner (2021) ascertained that the shariah compliances of crypto-
currency still become a debate amongst the shariah scholars. From an
Islamic law perspective, the classification of cryptocurrency still needs
further analysis. Hammad (2018) reported similar findings. However, if
the cryptocurrency is backed by any precious metal such as gold, it will
increase its acceptance rate and adaptability in Muslim populated
countries. Ajouz et al. (2020a) analyzed the recently emerged Precious
Metal Backed Cryptocurrency (PMBC) and found that more than 63.55%
of respondents will accept PMBC as a mode of transaction for their future
payments. In other studies, Ajouz et al. (2020b) proposed a model for
implementing the PMBC mechanism, and Ajouz et al. (2020c) assessed
the shariah compliances of PBMC. These studies highlighted that PMBC
provided shariah compliances standards to perform the function of
money while operating as a peer-to-peer payment system.
In a similar vein, Saleh et al. (2020) and Virgana et al. (2019)
maintained the view that payment methods based on cryptocurrencies
are legitimate, as they reduce the transactions cost and are backed by
shariah as fiat money. Similar to the analogy of cryptocurrency, Lietaer
(2017) proposed a model of global digital currency i.e., ‘Trade Reference
Currency’, and will be backed by tangible assets such as gold, silver, oil,
etc., and the bearer will bear storage cost. Over the last decade, the family
of cryptocurrencies has witnessed tremendous growth, with more than
USD 2 trillion in total market value.
With the advent of cryptocurrency and developments around block-
chain, technology experts, industry professionals along shariah scholars
have been working to introduce FinTech in shariah-compliant financing
products and services. In this regard, M. Abubakar et al. (2019) argued
that cryptocurrencies have three competitive advantages over other
forms of money, namely, (1) It is based on a unique decentralized
financial system; (2) It's controlled issuance; (3) to surmount inflation.
Consequently, X8 AG1 and OneGram2 launched the shariah-compliant
cryptocurrencies backed by gold and stable fiat currencies such as USD,
euro, etc.
1
https://www.x8currency.com/x8x/.
2
https://onegram.org/.
M.M. Alshater et al. Heliyon 8 (2022) e10385

Table 3. Islamic FinTech and distributed ledger technology.

Paper Info Purpose Methodology Results Dropout

Cryptocurrency
(Oziev and The paper discusses the nature and status Theoretical and * Defined the status and influence of The novelty of the paper is very limited
Yandie, 2018) of cryptocurrency from the perspective of descriptive analysis. cryptocurrency within mainstream without providing any practical
Shariah. currencies. implications and future research gaps.
* Cryptocurrency can be used as money if
it fulfils the requirement of shariah.
(Hanif, 2020) This research evaluates certain currencies' Literature review. * The existing currency systems are not The research should involve Islamic
ability, including fiat money, banking, effective in escalating socio-economic scholars to enrich the discussion from
and cryptocurrency, to achieve socio- development. various perspectives.
economic objectives based on shariah * Cryptocurrency does not yet meet the
principles. shariah-compliance criteria as it does not
back by real assets.
(Siswantoro et al., This paper discusses the relevance of A mixed methodology of * Cryptocurrencies are highly volatile. This study employed very limited period
2020) cryptocurrency as money in the context of Descriptive literature and * They cannot be used as an alternative to from September 2017 to January 2019
Islam finance. GARCH approach. fiat money. which might not provide robust results.
(Kirchner, 2021) This research analysis the shariah- Qualitative approach: * Cryptocurrency can be associated with This discussion of this study will be more
compliance of cryptocurrency from the Literature review and case an alternative tool for payment if it is appealing by addressing the current
historical and modern view. study. regarded as commodity. regulation and report related to shariah
* Cryptocurrency can be classified as compliances of cryptocurrency.
money without any delay in payment, riba
and interest.
* Cryptocurrency can be used as the
Islamic bond.
(Ajouz et al., This study examines the metal-backed Partial least squares * This paper constructs eight factors for The study tested innovation diffusion
2020a) cryptocurrency from the shariah structural equation the adoption of metal-backed theory only in Malaysia and further cross-
perspective. modeling (PLS-SEM) based cryptocurrency. country studies should be conducted.
on questionnaires. * Six factors influence the adoption of
metal-backed cryptocurrency.
(Ajouz et al., This study proposes a Precious Metal In-depth interview. * PMBC provides a convenient and secure The result should address more of the
2020b) Backed Cryptocurrency (PMBC) online platform for financial transactions. challenges in implementing the proposed
mechanism. * Regulation and governance become model.
primary challenges in implementing
PMBC.
(Ajouz et al., This study analyses the shariah Semi-structured interview * PMBC is argued to become a solution for The discussion of this study will be more
2022) compliances of PMBC. shariah-compliant cryptocurrency, which comprehensive by providing the updated
financial experts and shariah scholars regulation related to cryptocurrency in
validate. various Muslim countries to present the
current state of legalization.
(Saleh et al., This paper assesses the Islamic approach A qualitative approach * Cryptocurrency is a legitimate payment The results cannot be generalized since it
2020) towards the distillation of transection based on semi-structured method. is based on only 8 interviews and are
based on cryptocurrency. interviews. * It reduces the cost of a transaction. concentrated in Nigeria and Malaysia.
* It is compliant with shariah as any other
fiat money.
(Virgana et al., The paper proposes a conceptual model of Theoretical and conceptual * Cryptocurrency can be used as a medium The paper does not provide any model,
2019) Islamic cryptocurrency. approach. of exchange if it does not involve interest, rather discusses the literature vaguely
not used for illegal activities. without any implication towards Islamic
cryptocurrencies.
(Lietaer, 2017) This study presents a shariah-based digital Theoretical and conceptual * The global trade-based digital currency This study lacks depth analysis on shariah
currency. approach. will be backed by major commodities such compliance based on fiqh, Quran, and
as gold, silver, oil, etc. hadith to enrich the discussion.
* This currency lies within the scope of
countertrade; thus, no new legislation is
required.
(M. Abubakar This paper discusses the role of Qualitative and descriptive * Cryptocurrency advantage due to The finding of this study would be more
et al., 2019) cryptocurrency in the development of approach. decentralization, limited issuance, and impactful if the researchers conducted an
Islamic finance. mitigating inflation. in-depth interview to gather the scholar's
* Shariah scholars should be proactive in perspective.
designing the standards and regulations to
incorporate them into Islamic finance.
(N. Khan et al., This paper structured and tokenized Theoretical and conceptual * Identified key challenges faced in the This paper mostly focused on murabaha
2022) Sukuk based on blockchain. approach. issuance of Sukuk Sukuk, we are not sure if such a structure
* Discussed several blockchain is viable also for other types of Sukuk.
taxonomies to identify the best blockchain
application focusing on Islamic finance.
* Conducted a case study on Sukuk
tokenization through smart contracts for
murabaha Sukuk.
(Uddin et al., This study evaluates the role of MGARCH-DCC, wavelet * Bitcoins returns are volatile but tend to This study argued that bitcoin offers
2020) cryptocurrency as a hedging instrument. methods. come back around their mean in the long diversification benefits for DJIM both in
run. the short and long-run investment period.
* It provides diversification benefits across However, the authors should briefly
address the shariah compliance in

(continued on next page)

9
M.M. Alshater et al.
Table 3 (continued )
Paper Info Purpose
(Lahmiri et al., This research examines the randomness,
2020) power-law correlations, and chaos among
the prices of common stock indices from
the European zone, green (low Carbon),
family business, and Islamic stocks.
(W. M. A. Ahmed, This research investigates the sensitivity
2021) of Islamic stock towards the volatility
price of bitcoin.
(Rehman et al., This paper assesses whether Islamic stock
2020) indices provide diversification
opportunities to cryptocurrency investors.
(Mensi et al., This paper focuses on the risk-return
2020) characteristics of bitcoin with Islamic
equity and capital markets.
(Hasan et al., This study analyzes the impact of
2021) cryptocurrency policy uncertainty toward
several investment instruments, including
gold, bitcoin, DJ Islamic index, Sukuk,
WTI returns, and the US dollar.
(M. K. Hassan, This study analysis the shariah compliance
Karim, et al., of bitcoin and cryptocurrencies.
2020)
(Aloui et al., This paper investigates the differences
2021) between Islamic gold-backed
cryptocurrencies and their counterpart.
(Lahmiri and This paper investigates the decomposition
Bekiros, 2019) of the persistence structure of green and
Islamic cryptocurrencies.
(Nugroho, 2021) This study examines volatility spillover
between gold-backed cryptocurrencies
and gold, particularly during COVID-19.
(Chkili et al., This study examines the differences
2021) between the Islamic stock market and
bitcoin in facing an economic slowdown.
(Bahloul et al., This paper analyzes whether bitcoin,
2021) Islamic index, and gold provide “safe-
haven” instruments during COVID-19.
(Echchabi et al., This study investigates the determining
2021) factors of Muslims to invest in Bitcoin.
Methodology
Empirical mode
decomposition.
Quantile regression
approach.
ARFIMA-FIGARCH model.
Wavelet coherence (WTC),
Cross-wavelet
transformation (XWT),
Wavelet value at risk
(VaR).
Ordinary least square,
quantile regression, and
quantile-on-quantile
regression.
Qualitative approach.
Multivariate GJR-GARCH
Multi-step resolution
approach.
GJR-GARCH method
under corrected DCC
(cDCC).
DCC-FIGARCH model.
Empirical method
following Baur and Lucey's
(2010) and Baur and
McDermott's (2010)
SEM method.
10
Results
all equity markets, including Dow Jones
Islamic Market Index (DJIM).
* Prices fluctuations in the long (short) run
are (anti) persistent.
* The price volatility of bitcoin
significantly shapes the Islamic stock
market behavior both in emerging and
developed market during normal, bear,
and bullish markets states.
* Times varying dependence of DJIUK,
DJIJP, and DJICA with bitcoin.
* VaR of bitcoin is higher than Islamic
indices.
* Islamic indices provide diversification
benefits to bitcoin investors.
* Strong co-movement of Islamic equity
and capital market with bitcoins at low
frequencies.
* The diversifications benefit of Islamic
assets with bitcoin depends on time and
frequency.
* Bitcoin, the US dollar, and WTI return do
not function as hedgers for the
uncertainties of policy for
cryptocurrencies during the bearish and
bullish market.
* The higher uncertainties of
cryptocurrency policies will lead to a
higher return of gold, Sukuk, and the DJ
Islamic index.
* A legal regulation should declare
whether bitcoin and cryptocurrencies are
shariah compliant.
* Islamic cryptocurrencies are less
sensitive to macroeconomics risks.
* Islamic cryptocurrencies have a positive
correlation with gold while conventional
cryptocurrencies are negatively
correlated.
* The returns of Islamic and green
cryptocurrencies possess anti-persistent
dynamics.
* Their volume, price, and volatility reflect
high persistence as compared to
conventional cryptocurrencies.
* The connectedness between gold and
gold-backed cryptocurrency (GC-gold)
increased over time during COVID-19.
* There is a significant difference in
behaviour between conventional and
Islamic GC-gold.
* Islamic GC-gold is more resistant to
COVID-19's impact compared to
conventional counterparts.
* Bitcoin performs better than Islamic
stock, shown by the constantly increasing
diversification benefit.
* Economic instability causes a higher cost
in performing hedging strategies.
* Islamic stock indexes and bitcoin were
significantly affected by the COVID-19 crisis.
* Bitcoin act as a weak hedge and not a safe-
haven asset.
* Perceived ease of use, compatibility,
awareness, and facilitating conditions are
crucial factors in forming Omani
communities' intention to invest in
Bitcoin.
Heliyon 8 (2022) e10385
Dropout
investing in Bitcoin instruments to offer
more comprehensive suggestions.
The paper was more focused on European
equity markets along with the
cryptocurrency market than Islamic
equity markets.
The study will be more impactful by
examining the differences between
Muslim and non-Muslim countries, as
bitcoin still becomes a debate amongst the
shariah scholars.
One of the research limitations is that it
does not represent the volatility spillover
between Islamic stock and bitcoin in
emerging markets and Asia countries by
using Dow Jones Islamic Market Asia and
DJIM World Emerging Markets Index data.
The discussion on result analysis would be
more insightful by presenting the shariah-
compliance of DJIM relates to it is a
possibility as the hedger for bitcoin in the
short-term investing period.
The discussion of the finding of this study
would be more insightful if the analysis
coupled with further explanation on the
impact of screening criteria in Islamic
investment instruments.
The finding of this study would be more
attractive by investigating the regulation
of bitcoin and cryptocurrency in various
countries: Muslim vs. non-Muslim
countries.
This study focused on the comparison of
Islamic and conventional gold-backed
cryptocurrencies from a quantitative
perspective. The result analysis should be
analyzed by engaging directly with the
shariah compliance principles perspective.
This study employed a narrow period data
which covers less than one year's data for
each variable. Hence, the result might not
be robust.
The study uses data covering the period
from 15 February 2019 to 10 August
2020. Thus, the finding of this study will
be more insightful if the study compares
the volatility pre-and during COVID-19.
This study presented the economic
downturn during COVID-19. However,
the result will be more impactful if the
study included range data during GFC
1998 and 2008.
The discussion will be more insightful if
the study presents a brief comparison
between bitcoin and Islamic stock.
This study only presented Muslims in
Oman.
(continued on next page)
M.M. Alshater et al. Heliyon 8 (2022) e10385

Table 3 (continued )
Paper Info Purpose Methodology Results Dropout
Blockchain
(Chong, 2021) This research discusses the advantage and Qualitative approach. * Blockchain offers a transparent financial This study will be more comprehensive by
challenges of implementing blockchain in transaction in Islamic financial services, conducting an in-depth interview with
Islamic finance. which will boost trust between the parties. financial and IT experts.
* The lack of blockchain regulation and
shortage of algorithmic protocol to
validate the smart-contract decision
become the main challenges that hinder
the development of Islamic FinTech.
(Delle Foglie This study investigates the impact of Case study analysis. * Sukuk tokenization enables sharing and This approach fails to take the perspective
et al., 2021) blockchain technology, particularly smart tracking the ownership, which degrades of stakeholders and experts regarding the
contracts, and tokenization on the Sukuk the uncertainty of ownership. issue.
industry. * Blockchain technology has significantly
depressed the risk of gharar and maysir in
Sukuk issuance.
(Alaeddin et al., This study analyses the opportunity and Qualitative approach: * Blockchain increases the work efficiency The discussion will be more insightful by
2021) challenges in adopting blockchain survey. in conducting financial services, which addressing the practical contribution to
technology in Islamic finance will prompt the contribution of Islamic conquering the challenges.
instruments. finance towards society, specifically in a
crisis such as COVID-19.
* Lack of experts, contradictory fatwas and
regulations, the absence of shariah
supervision, and shariah standards are the
major challenges in blockchain adoption.
(Busari and This paper aims to explore the challenges Qualitative approach. * Blockchain technology has the potential This study is based on doctrinal literature
Aminu, 2021) and opportunities in adopting smart to improve the reliability of Sukuk and interview with local smart contract
contracts to improve the efficiency of transactions between the parties. issuance. Hence, the result does not fully
Sukuk issuance. * The lack of global shariah standards and present the general issues on a global
limited national regulation becomes the level.
key challenges in adopting blockchain on
Sukuk.
* The application of blockchain on Sukuk
issuance is still in the infant stage. Thus,
there is no robust evidence that proves
blockchain has a significant impact in
increasing the effectiveness of Sukuk
issuance.
(M. H. Ali et al., This study proposes a framework for Qualitative approach. * This study addresses five challenges The discussion of this study will be more
2021) blockchain adoption in the halal food related to the halal Supply Chain (SC) food impactful by involving the expert's
industry. industry that can be solved by blockchain perspective to obtain a comprehensive
technology. challenge faced by the halal food industry.
(Al-Sakran and This paper analyzes how the adoption of A qualitative and * The implementation of blockchain and This study does not address the limitation
Al-Shamaileh, blockchain and smart contract quantitative approach. smart contracts on Islamic finance, in adopting blockchain and smart contract
2021) technologies shapes profit-loss-sharing particularly on musharakah contracts, technology.
investment schemes. significantly increases transparency and
customers' trust, and participation.
* This study proposed e-negotiation
models for the investor and entrepreneurs
in achieving fair agreement on the
musharakah contract.
(Abdeen et al., This study proposed a platform for Qualitative approach. * This study builds upon blockchain-based This study does not discuss the challenges
2019) implementing blockchain on takaful mudharabah and wakalah/wakalah waqf in adopting blockchain on takaful
services. models. services.
* Implementation of blockchain on takaful
services has had a positive impact
resulting in enhanced confidence and
transparency, and communal
involvement.
(Mohd Nor et al., This study examines the contribution of A qualitative approach * This study encourages Islamic social The result of this study cannot be
2021) blockchain technology in enhancing zakat based on an interview with finance to adopt blockchain technology to generalized as it is involved Malaysian
management. zakat stakeholders and improve management performance. zakat stakeholders and receivers and
SEM approach. * Trust in technology, perceived payers.
usefulness of technology, and behavior in
using technology become the crucial
factors that influence the acceptance of
blockchain usage in zakat.

Several studies have assessed the empirical nature of cryptocurrencies
along with Islamic equity and capital markets to understand the risk-
return tradeoff and whether they provide diversification and hedging
opportunities. For example, Uddin et al. (2020) consider the role of bit-
coins as hedging instruments in portfolio management. Using a
comprehensive daily dataset of Islamic, convention, and sustainable as-
sets, they reported that bitcoin values are mean-reverting in the long run,
however, bitcoin provides portfolio diversification benefits to all equity
markets both in the short and long run. Lahmiri et al. (2020) also observe
the long-term persistence in the fluctuation of bitcoin prices along with

11
M.M. Alshater et al.
European and Islamic markets. Another research by W. M. A. Ahmed
(2021) analysis the sensitivity of the Islamic stock market towards the
dynamic volatility of bitcoin in developed and emerging markets and
found a similar behavior of Islamic stock in two types of markets during
normal, bear, and bull markets states. Similarly, Rehman et al. (2020)
studies the risk dependence structure of bitcoin along with the Islamic
equity market for the period of 2010–2018 and found that the value at
risk of bitcoin is higher than those of Islamic equity markets, which
naturally implies that investors from cryptocurrency market should add
Islamic equity funds to reduce the overall risk of their portfolio. Besides,
Mensi et al. (2020) analyzed bitcoins' co-movement and risk structure
with the Islamic equity and bond market and provided mixed results.
They find strong co-movement of bitcoin in the same direction at a lower
frequency with Islamic equity and bond, suggesting lower (higher)
diversification benefits for the long run (short-run) investors. Lastly,
empirical evidence during the policy uncertainty period, Hasan et al.
(2021) portrayed the positive and significant relationship between
cryptocurrency policy uncertainty towards gold, Sukuk, and the DJ Is-
lamic index return, which indicates the existence of diversification
benefit between those assets during bearish, normal, and bullish market
period. Besides, this study also mentioned that the existence of shariah
screening criteria on Sukuk and the DJ Islamic index improves the
resistance of Islamic investment instruments towards uncertainty and the
economic meltdown period.
Few studies have also assessed the differences between Islamic and
conventional cryptocurrencies. The shariah compliance of bitcoin and
cryptocurrency still has become a debate amongst Islamic scholars and
stakeholders (M. K. Hassan, Karim, et al., 2020). Aloui et al. (2021) found
that Islamic cryptocurrencies positively correlate with yellow metal.
However, this relationship is negative and weak for conventional cryp-
tocurrencies. Likewise, Lahmiri & Bekiros (2019) reported that green and
Islamic cryptocurrencies showed anti-persistence in their returns while
the volume, prices, and volatility exhibit a higher pertinence dynamic
than its counterpart. During economic meltdown due to COVID-19
(Nugroho, 2021), Islamic gold-backed cryptocurrency (GC-gold) has
shown better performance than conventional GC-gold, which is indicated
by the resistance of Islamic GC-gold to COVID-19's impact. Moreover,
Chkili et al. (2021) found that bitcoin provides a safer asset for investors
during economic downturns than Islamic stock. Thus, it is suggested that
investors add bitcoin to their investment portfolio to reduce the risk.
These findings imply significant differences between Islamic and con-
ventional ones; the logical reason is the existence of screening criteria
standards in Islamic cryptocurrencies. Furthermore, the behavior of Is-
lamic and conventional cryptocurrencies was also influenced by investor
sentiment, where the investor in an Islamic portfolio should follow spe-
cific rules based on shariah compliance, including the prohibition of any
speculation activities.
In contrast with the previous studies, a research by Bahloul et al.
(2021) ascertained that during the COVID-19 crisis period, bitcoin and
Islamic stock indexes had a similar volatility pattern, and the two types
of investment instruments did not offer safe-haven investment. Hence,
it can be concluded that bitcoin has a similar characteristic with other
investment instruments, and the massive amount of information related
to bitcoin will gradually decrease the Muslim perspective regarding the
uncertainty (gharar) of bitcoin. Moreover, However, the legal regula-
tion related to shariah compliances of bitcoin should be designed to
evaluate and improve its legality from an Islamic perspective. Another
interesting study conducted by Echchabi et al. (2021) examined the
predicting factors that affect Muslims in Oman to invest in Bitcoin and
found that perceived ease of use, compatibility, awareness, and facili-
tating conditions plays a vital role in shaping the investor's intention.
Importantly, this study underlines that the respondents believe they
have a sufficient understanding and awareness of the Bitcoin concept,
its benefits, and the strategies utilized to administer a Bitcoin account.
Research that empirically assesses the investor behavior using a
quasi-qualitative approach is still scarce; this topic becomes significant
12
Heliyon 8 (2022) e10385
to investigate to obtain comprehensive knowledge regarding Muslim
intention to adopt bitcoin.
The second sub-stream is blockchain. Blockchain has become one of the
most popular technologies behind cryptocurrencies. This stream discuss
the implementation of blockchain technology on various Islamic finan-
cial services, including the Sukuk industry, musharakah scheme, takaful,
and zakat (Delle Foglie et al., 2021; Al-Sakran and Al-Shamaileh, 2021;
Abdeen et al., 2019; Mohd Nor et al., 2021). Blockchain classifies and
records the transaction, which is connected to every party. Thus, the
adoption of blockchain in finance will enhance the transparency and
traceability of every single financial transaction. Hence, it increases the
accountability in financial services, which in turn, promotes trust be-
tween the parties (Chong, 2021). Furthermore, Delle Foglie et al. (2021)
and Busari and Aminu (2021) demonstrated that the adoption of smart
contract and tokenization on Sukuk would support the development of
Sukuk by reducing operational cost, assuring shariah compliance,
strengthening standardization, removing the ambiguities from shariah
interpretations, and speed-up the transaction process (N. Khan et al.,
2022). Despite the numerous advantages of implementing blockchain
technology in Islamic financial services, the lack of legal regulation
related to blockchain, the absence of shariah standard of Islamic FinTech,
and the complexity of Islamic finance principles become the primary
factors that prevent the escalation of blockchain integration in Islamic
financial institutions (Alaeddin et al., 2021).
M. H. Ali et al. (2021) explained that blockchain has huge potential in
elevating the Supply Chain (SC) benefits for the halal food industry by
increasing SC transparency, food quality, traceability, and avoiding food
fraud. In the same vein, Al-Sakran and Al-Shamaileh (2021) underlined
that integrating blockchain into the musharakah financial scheme will
automatically enable the parties to conduct e-negotiation. This study
illustrated the e-negotiation model by allowing the entrepreneur and
investors to come to an agreement. The entrepreneurs should input their
information, including the purpose of investment, professional back-
ground, and previous business projects. Thus, the blockchain will auto-
matically ensure the shariah compliance of business activities, assess
business risk, and provide relevant information for the investor to decide
their participation in the business.
In addition, Mohd Nor et al. (2021) stated that the usage of block-
chain technology could be improved by socializing and educating the
community regarding the significant advantages and convenience of
utilizing blockchain on Islamic social finance such as zakat. This effort is
predicted to lead to a massive improvement in zakat collection and dis-
tribution for society. Moreover, Abdeen et al. (2019) emphasized that a
certificate from a legal authority that describes the specific roles of in-
vestors, entrepreneurs, and operators is urgently essential to manage and
control the safety and shariah-compliance of transactions in the Block-
chain expected to intensify the participation in Islamic finance. Based on
the findings of these studies, it can be ascertained that blockchain tech-
nology will increase customer engagement in Islamic finance (Abdeen
et al., 2019). In consequence, it promotes the contribution of the Islamic
finance instrument itself to economic growth. Studies also examined the
correlation between blockchain and the capital market. Table 3 further
summarizes the prior literature in this stream.
4.1.3. Stream 3: financial inclusion
This stream consists of 13 studies as described in Table 4, it is about
the role of Islamic FinTech in financial inclusion. A discussion on some of
the most important papers are presented as follows:
Islamic social finance tools such as zakat, sadaqah, waqf, Islamic
microfinance, and micro takaful models lead to financial inclusion
(Macchiavello, 2017; Zauro et al., 2020). Islamic social finance tools have
a positive impact on financial inclusion. The extensive use of Islamic
social finance tools lead to less inequality of income in Muslim countries
(Zulkhibri, 2016). The use of financial technology has increased the
reach of Islamic financial institutions to the last man standing in the
queue with social finance such as zakat, waqf, and Islamic microfinance
M.M. Alshater et al.
Table 4. Financial inclusion.
Paper Info Purpose
(Rabbani, Ali, This study provides a solution to the
et al., 2021) economic crisis caused by COVID-19
by optimizing Islamic financial
instruments.
(M. K. Hassan, This study aims to evaluate the role of
Rabbani, et al., FinTech in mitigating the crisis
2020) caused by COVID-19's effects on
Islamic financial institutions.
(Aziz et al., This study examines earlier research
2021) findings to determine the correlation
between digital banking and financial
inclusion.
(Ezzahid and This manuscript tries to analyze the
Elouaourti, impact of digital banking on financial
2021) inclusion in Morocco.
(Rabbani, This research examines the adoption
Bashar, et al., of FinTech in the Islamic financial
2021) system to conquer the COVID-19
crisis.
(Hudaefi, This paper discussed the role of
2020) Islamic FinTech in promoting
Sustainable Development Goals
(SDGs) in the Indonesian context.
(Baber, 2020a) The study compares the financial
performance of the countries in terms
of financial inclusion and FinTech.
(Aminah et al., This study examines the role of
2020) FinTech and Islamic banks in
achieving economic inclusion in
Indonesia.
Methodology
Qualitative based on theoretical
approach considering the COVID-19
situations.
Qualitative approach.
Descriptive research
Principal component analysis method
and probit model method.
Qualitative based on content analysis.
Qualitative and literature review.
Qualitative and descriptive approach.
Descriptive analysis with secondary
data and literature studies.
13
Heliyon 8 (2022) e10385
Results Dropout
* There are four stages of economic Ten cutting-edge Islamic financial
crisis due to COVID-19. instruments will significantly accelerate
* Ten innovative Islamic financial economic recovery at every crisis stage;
instruments will significantly escalate zakat and sadaqah are proven to be the
the economic recovery in every crisis potential funding sources for
stage; specifically, zakat and sadaqah are underprivileged communities.
proven to be the potential source of
funds for the marginalized communities.
* The use of Islamic FinTech instruments One of the limitations of this study is
post COVID-19 can be categorized into that it does not provide potentially
three categories: zakat, qardh al-hassan, applicable programs.
and sadaqah are suitable for short-term
energy support; FinTech-based
crowdfunding, the UNDP's Global
Islamic Finance, Impact Investing
Platform, and smart contracts are
suitable for recovery in the medium-
term; and finally, waqf, social SUKUK,
and smart contracts are suitable for
long-term recovery and resilience.
* Digital banking and financial inclusion This study relied on bibliometrics
have a significant and positive general analysis, which failed to
correlation to social and economic consider the content analysis of the
development. previous studies.
* The adoption of mobile banking has The study's finding might have been
expanded the financial accessibility for more insightful if financial inclusion
unbanked people at a lower cost. was also measured by the social and
* Mobile banking does not have a quality impact of digital banking.
prominent role in improving the
financial inclusion of women and older
people. Moreover, education on
financial technology for women and
older people is crucial to elevate the
understanding and the optimal usage of
mobile banking.
* This study argued that implementing An in-depth interview with shariah
FinTech in Islamic finance institutions scholars and scholars can be used to
would prompt the role of Islamic finance develop the suggested system in this
in combating the COVID-19 crisis. study.
* This study proposed a system, divided
the impact of COVID-19 into three
terms, and provided the most suitable
Islamic finance instruments that can be
utilized on each term.
* Islamic FinTech should open up with
innovation to improve its contribution
to the community.
* Islamic FinTech has elevated SDGs The study's approach fails to bring
achievement in Indonesia, particularly comprehensive and objective
SDG 1, SDG 2, and SDG 10. discussion. Thus, the result of this study
* Islamic FinTech has a massive impact might be biased and lead to positivist
in boosting financial inclusion by perspectives.
offering a fund source for
underdeveloped sectors such as
agriculture and small and micro-
enterprises.
* Islamic FinTech is more focused on This study needs to use more indicators
women empowerment both financially that reflect the level of financial
and socially compared to conventional inclusion to present a more accurate
FinTech. result.
* Islamic FinTech has more contribution
in achieving financial inclusion than
conventional ones.
* Conventional FinTech has greater
performance and larger market share
than Islamic ones.
* The collaboration between Islamic This study does not discuss an empirical
FinTech and Islamic banks has example of Islamic FinTech's impact.
significantly increased the accessibility
rate of small-business lending services
for unbanked communities.
(continued on next page)
M.M. Alshater et al.
Table 4 (continued )
Paper Info Purpose
(Banna et al., This study aims to investigate the
2021) roles of Digital Financial Inclusion
(DFI) on Islamic banks' stability
during COVID-19's crisis.
(Haider et al., This research tries to offer the
2020) integration model of zakat and qardh-
al-hassan with Artificial Intelligence
(AI) and Natural Language Processing
(NLP) to overcome the COVID-19
crisis.
(Tajudin et al., This study assesses the potential tools
2020) to support the underserved
community by optimizing Islamic
financial instruments through
FinTech.
(S. A. Shaikh, This study aims to create a hybrid
2021) microfinance model by integrating
different Islamic commercial and
social finance institutions utilizing
FinTech to increase its impact.
(Razak et al., This manuscript analyzes the urgent
2020) need for Islamic-compliant regulation
for FinTech applications in the
Islamic finance industry.
Methodology
Panel-Corrected Standard Errors
(PCSE), Two-Stage Panel Least
Squares-Instrumental Variables
(2SLS-IV), and Two-Step System
Generalized Method of Moments
(2SGMM) dynamic panel estimation.
Qualitative approach.
Qualitative approach based on
literature review, conceptual analysis,
and case study.
Mathematical model and an empirical
estimation.
Qualitative approach.
14
Heliyon 8 (2022) e10385
Results Dropout
* DFI is argued to have a positive effect The findings of this study cannot be
in promoting the stability of Islamic generalized as it is adopted 65 Islamic
banking and reducing the fault risk. banks from six countries, including
* DFI has an enormous effect in Malaysia, Qatar, Sudan, Bangladesh,
degrading the number of unbanked Indonesia, and Pakistan. Moreover, the
people, which in turn, increases the number of banks sample in each country
social-economy access to the financial does not balance; thus, the result might
institutions, particularly in the time of not present the current fact in other
COVID-19's crisis. countries such as Qatar that has the
* The importance of DFI's impact in smallest number of banks as the
increasing the Islamic banking research data.
performance called attention to
increasing digital financial literacy by
providing seminars, workshops, and
campaigns.
* The higher number of smartphone
users, the lower number of unbanked
populations.
* The adoption of AI and NLP is argued This study presents an interesting topic
significantly prompt zakat and qardh-al- by addressing the potential integration
hassan's contribution to enhancing between Industry 4.0 and Islamic
economic recovery. finance. However, the result of the study
* AI and NLP help Islamic financial will be more impactful by presenting the
institutions reach wider beneficiaries applicative model of the integration.
and lenders, improve the accuracy of the
decision-making process, and identify
the most effective program for the
beneficiaries. As a result, the financial
inclusion rate for the poor is escalating.
* Islamic FinTech has become the most This study interviewed Islamic FinTech
potent tool to degrade the unbanked practitioners from two countries, which
Muslim population by providing the made the discussion comprehensive.
customer's needs in the fastest and This study will be more insightful by
cheapest way. offering the customer's perspective on
* FinTech players should build customer Islamic FinTech.
engagement, improve service quality,
and professionalize operations to obtain
a more significant market share.
* Islamic FinTech can alleviate the
financial inclusion problem in
underprivileged populations by utilizing
several instruments, such as zakat, waqf,
and sadaqah.
* Implementing FinTech in Islamic The result of this study will be more
microfinance will help reach out to a appealing by discussing the
broader range of unbanked implemented model of FinTech in other
communities and the poor. Islamic financial institutions as a study
* The sustainability of Islamic case.
microfinance and FinTech must be
increased through non-financial factors,
including repayment incentives,
commitment, and an investment in
knowledge and skills.
* Artificial intelligence will significantly
improve the efficiency of the financing
program by lowering administrative
costs and assisting in the client
screening process to ensure their
financial and economic stability.
* FinTech and Islamic finance have The findings of this study will be more
evolved into the ideal solutions for applicable if it also provides a brief list
addressing the issue of financial of items that should be addressed in
inclusion by offering a risk-sharing FinTech regulation and its comparison
system and wealth distribution. with the existing regulation.
* The existing regulation was
insufficient to accommodate the related
activities; hence, strict regulation is
urgently required to implement FinTech
in Islamic financial institutions.
* In Islamic FinTech, the shariah
supervisory board should also consist of
a technology expert to guarantee that
the FinTech services adhere to Islamic
principles.
M.M. Alshater et al.
(H. Ahmed and Salleh, 2016). This statement also supported by Aziz et al.
(2021) who investigated the correlation between digital banking and
financial inclusion and found that digital banking has a positive corre-
lation to financial inclusion. Moreover, Ezzahid & Elouaourti (2021)
explained that digital banking plays a prominent role in reducing the
number of unbanked by providing financial access in a convenient way
and competitive price.
Other studies further investigate the role of FinTech in enhancing the
contribution of the Islamic social economy and financial institutions
during COVID-19. Mustafa Raza Rabbani et al. (2021) proposed a model
of utilizing Islamic finance as an instrument in combating the COVID-19's
impact and revealed that Islamic FinTech will accelerate the collection
and distribution of funding for the community in the short, medium, and
long term. The role of Islamic FinTech and its adoption by the Islamic
financial institutions will offer remarkable solution for economic activ-
ities due to COVID-19. Rabbani, Ali, et al. (2021) divided the four-stage
economic model in combating COVID-19, namely, business and eco-
nomic damage, financial contagion, bottom formation, and post
COVID-19 effects. In addition, for each stage of the epidemic, this study
also recommends ten unique Islamic financial services. In detail, M. K.
Hassan, Rabbani, et al. (2020) offers four potential Islamic finance in-
struments merged with FinTech in combating the economic downturn
due to COVID-19, namely, Islamic cryptocurrency, a blockchain-based
system for zakat and qardh-al-hasan, smart contracts, and smart Islamic
banking. In a broader context, Hudaefi (2020) argued that implementing
FinTech services in Islamic financial institutions has huge potential in
elevating the social and economic welfare of the unbanked population by
distributing funding for their small and underdeveloped business sectors;
which will support the government in achieving the Sustainable Devel-
opment Goals (SDGs), particularly SDG 1 no poverty, SDG 2 zero hunger,
and SDG 10 reduce inequality. Interestingly, Baber (2020a) pointed to
other advantages of having FinTech in Islamic finance, as the improve-
ment of women's quality of life as it is focused on empowering women
both financially and socially.
Previous studies highlighted the importance of implementing Fin-
Tech in Islamic financial institutions for financial inclusion. Interestingly,
Aminah et al. (2020) stressed that despite the crucial impact and massive
potential in escalating the contribution of Islamic finance towards
financial inclusion, the adoption of FinTech itself had been significantly
proven in leading the Islamic banking market share to the upward trend.
Furthermore, Banna et al. (2021) and Syed et al. (2020) also revealed
that the adoption of FinTech in Islamic banking has a crucial role in
promoting banking stability, specifically during the economic downturn
caused by COVID-19, specifically by minimizing the cost of services,
maximizing profit, and promoting the efficiency of banks. Hassan (2015)
suggests the possibility of including poor Muslims in mainstream finan-
cial services through innovative approaches. Islamic microfinance can be
viable if it is delivered with FinTech, as it can lead to financial inclusion
and is based on the principle of Islamic solidarity. He argues that
FinTech-based microfinance can generate enormous employment and
economic prosperity for the poor. Correspondingly, Hidayat (2019) also
concludes that financial inclusion is an excellent idea for the poor and
marginalized. However, it can only be achieved through the help of Is-
lamic banks and non-banking financial corporations (NBFCs). Islamic
banks need to collaborate with Islamic microfinance institutions to
achieve financial inclusion. Shinkafi et al. (2020) and Zulkhibri (2016)
report similar findings, arguing that Islamic banks and financial in-
stitutions have an essential role in the financial inclusion of the poor and
marginalized. As Islamic banking is based on the principle of compassion,
solidarity, and economic justice, it can help achieve financial inclusion by
bringing more innovative financial services through FinTech (Rabbani
and Khan, 2020).
Islamic financial institutions have an essential role to play in the
country's financial inclusion. The findings of the study conducted by
Banna et al. (2020) suggest that barring a few countries in the Middle
East and MENA region, most of the selected countries have some
15
Heliyon 8 (2022) e10385
inconsistent trends in the Islamic banking sector. It further concludes that
financial inclusion is linked with the efficiency of Islamic banks. The
study is a post-crisis analysis. It concluded that Islamic banks are still
bearing the consequences of the financial crisis; therefore, Islamic banks
should focus more on financial inclusion, and banks with a sound and
high level of the inclusive financial environment should have high effi-
ciency. Moreover, Tajudin et al. (2020) also emphasized that adopting
FinTech improves the performance of Islamic financial institutions in two
ways. First, it escalates the living standard of the underserved commu-
nity. Second, it becomes an effective way to strengthen the intimacy
between the customer and service provider through broader customer
knowledge regarding social finance. In addition, S. A. Shaikh (2021),
Aydin and Iqbal (2017) and Macchiavello (2017) also underlined that
Islamic financial institutions such as Islamic microfinance, banks, and
credit unions have an essential role to play in achieving financial inclu-
sion through the use of technology.
Financial inclusion and the role of Islamic finance must be viewed
differently in Muslim and non-Muslim countries (Sain et al., 2018). The
study is conducted in Australia, and it concludes that FinTech has nothing
to do with financial inclusion and in Australia alone, despite the wide-
spread use of financial technology, there are 3.1 million of the adult
population who are financially excluded. They further draw a conclusion
that the Muslim population is finically excluded due to their religious
beliefs because Islam prohibits riba and Australia is not governed by the
Islamic financial system. Baber (2020a), Kannaiah et al. (2017), and
Abubecker et al. (2019) support these findings, one being that the Mus-
lims in Non-Muslim countries are financially excluded and are not able to
get valuable financial services due to their religious beliefs. Adewale and
Haron (2017) support the argument that religion being an impediment to
financial inclusion.
From another perspective, Kannaiah et al. (2017) and Kim et al.
(2018) discuss the relationship between financial inclusion and the
economic growth of a country. They gather panel data from 55 OIC
countries and conclude by applying panel VAR, IRF's and granger cau-
sality tests. Pg Md Salleh (2015), Brekke (2018), and Zauro et al. (2016)
analyzed financial inclusion and individual characteristics with regard to
the specific countries. Jan et al. (2018), Aydin and Iqbal (2017), and A. E.
E. S. Ali (2017) say that financial inclusion is bout justice in Islamic
finance. It is the right of every individual to have access to valuable
financial services. Banna et al. (2020), and Arsyianti and Kassim (2018)
analyze the role of Islamic banking in financial inclusion and how Islamic
banking can be used as a tool for financial inclusion. Having access to the
key financial services is the major indicator of the economic well-being,
quality of life, and standard of living of the population all across the globe
(Banna et al., 2020; Sain et al., 2018). Not only that having access to
these valuable financial services helps a person to make an online pay-
ment, access to credit and offers, investments, and getting banking and
other financial services (Aldoseri and Worthington, 2017). According to
the Global Findex databases 2017, the situation in Organization of Is-
lamic Cooperation (OIC) countries remains worse as adults participating
in the financial system or having no access to the financial services re-
mains low as compared to the high-income countries. Despite the huge
penetration of Islamic banks and financial services in these countries, the
level of financial inclusion remains significantly low (Baber, 2020a).
There are 41% adults with the contribution in the financial system in OIC
countries as compared to the 92% in the high-income countries. The
report further stresses that around 75% of the world's unbanked popu-
lation lives in developing countries. The unbanked population of the
world is dominated by the Muslim countries with countries like Pakistan
and Bangladesh with 5.2% and 3.7% of the worlds unbanked population
respectively.
There is a strong opportunity for Islamic FinTech to fill this gap by
providing access to financial services to this segment of people and
bringing confidence in the financial system through technology.
Financial inclusion can be achieved by combining technology with Is-
lamic finance and Islamic FinTech is the way to go forward (Kim et al.,
M.M. Alshater et al.
2018). There are also studies on the role of Islamic versus conventional
finance in financial inclusion (Nawaz, 2017). Albaity et al. (2019)
concluded that Islamic FinTech is based on the principles of ethics and
morality and this characteristic makes it more fit for financial inclusion.
S. Khan et al. (2019) stressed that Islamic finance has some financial
services like zakat which automatically leads to financial inclusion. This
view is also confirmed from the findings of Sain et al. (2018), which
concludes that Islamic financial services combined with technology can
lead to financial inclusion. On the other hand, there are credible studies
like Baber (2020a) which concluded that there is no inter-relationship
between FinTech adoption and financial inclusion. Voluminous
studies have been proved that the integration of FinTech will uplift the
number of banked population and boost the Islamic finance perfor-
mance. Notwithstanding, the low quality of education, particularly for
women and elder people in utilizing FinTech; the presence of risks such
as network disruption and account securities, and the lower number of
smartphone users; and lack of firm regulation related to FinTech
become the prominent factors in preventing the massive adoption of
FinTech in Islamic economics, finance, and banking. Therefore, the
findings of existing studies suggest the need for the stakeholder to
establish an impactful effort in creating a conducive environment for
integrating FinTech in Islamic social-economy and financial in-
stitutions. Organizing regular seminars, campaigns, workshops, and
training sessions in increasing digital financial literacy, which in turn,
prompt the effectiveness of mobile banking usage specifically for the
unbanked community, small business owners, undereducated people,
women, and elder people (Banna et al., 2021; Ezzahid and Elouaourti,
2021). More importantly, a national and international standard for Is-
lamic FinTech regulation is urgently needed to improve the integration
of FinTech and Islamic financial institutions, as well as the qualification
of shariah board members, particularly in technological aspects, to
ensure that FinTech in the Islamic finance industry is regulated in
accordance with shariah principles (Razak et al., 2020).
4.1.4. Stream 4: Islamic FinTech and deposit-lending
There are 19 previous studies on this stream, which can be divided
into two sub-streams, namely, peer-to-peer (P2P) lending (4 articles) and
crowdfunding (15 articles). Prior studies on P2P lending stress the
challenge and potential development of Islamic P2P lending. To a large
extent, this sub-stream discusses the current Islamic P2P platform
development situation.
The first sub-theme is p2p lending. P2P lending is a platform that enables
borrowers to acquire a source of funds from the lender through the
internet (Rosavina et al., 2019). The conventional concept of p2p differs
from the Islamic concept, as lending can not be interest based, thus it is a
sort of peer to peer financing which took the name of lending while it is
indeed a shariah complaint financing in concept. P2P lending is one of the
financial services provided by FinTech, it is predicted to become the most
convenient financial platform for the unbanked community. Specifically,
Rosavina et al. (2019) investigate several influencing factors in using the
Islamic P2P platform. This study ascertained that the rejection from
banking institutions leads the customer to find other financing alterna-
tives, such as P2P lending that offers a more extended payment period,
shariah-based loans, and profit loss sharing schemes.
In general, the P2P lending platform is predicted to become a “new
banking service” with several additional advantages presented by the
speed, efficiency, and channels better than the traditional bank (Sa'ad
et al., 2019). This phenomenon leads to an unwanted situation, the
weakness of the banking system's contribution to economic development.
However, rather than viewing the P2P lending platform as a competitor,
the integration and collaboration between Islamic P2P lending and Is-
lamic banks would promote the positive development trend of the
business cycle, especially for the small business sector. Several studies
investigate the possibility of optimizing the P2P platform. Sa'ad et al.
(2019) proposed a model and argued that the MSC model is innovative
and provides equal benefits for the parties: business owners, investors,
16
Heliyon 8 (2022) e10385
and P2P companies. This model relied on the musharakah contract, where
the business owners and investors agree to run the business and share the
profit and loss-sharing equally based on the capital contributed. At the
same time, the P2P company gains a fixed fee as the agent that connects
the two parties.
Related to the previous discussion regarding the musharakah contract,
Aprita and Adhitya (2020) emphasized that the profit and loss sharing
scheme is effective in specific business models, and the scheme's imple-
mentation should be done by ensuring transparency between the parties.
This study underlines that the P2P platform should create an
upstream-downstream ecosystem that provides financial services and
solutions for non-payment financing cases. Moreover, this study also
suggested that P2P lending platforms collaborate with notaries or legal
parties to promote safety and speed up transactions. From another
perspective, Muhammad et al. (2021) demonstrated several significant
factors that affect the failure of the P2P lending platform. This study
pointed out that the higher level of debt and financing ratio and the weak
support from the government will lead to the failure of the P2P platform.
Most importantly, this study showed that the stricter Islamic principles
applied by the P2P platform would reduce the probability of failure faced
by the P2P platform. Therefore, this study calls on P2P players to improve
the quality borrower selection criteria and lending prudence and run the
platform under shariah compliance.
Another interesting study by W. Ali et al. (2018) proposes a concep-
tual framework that predicts the intention to adopt FinTech in SMEs'
Peer-to-Business (P2B) financing platform. This study highlights two
prominent factors that arguably influence the adoption of the P2B plat-
form. First, an internal factor is derived from cost, brand, security,
perceived ease of use, and usefulness; second, external factors cover so-
cial influence and facilitating conditions. In addition, this study also
highlights that the study on the intention to adopt P2P and P2B platforms
by SMEs from an Islamic perspective is still underexamined. Therefore,
this study suggests that extensive research is urgently needed to explain
the predicting factors of SMEs adopting FinTech platforms.
The second sub-theme in this stream is crowdfunding. Crowdfunding is
the broader concept derived from crowdsourcing, which aims to collect
financing from many individuals for social, profitable, or cultural pro-
jects (Mollick, 2014). The literature has defined crowdfunding as an open
call, essentially through the Internet, for the provision of financial re-
sources either in the form of donations or in exchange for some form of
reward and voting rights to support projects based on social, profitable,
or cultural motives (Mollick, 2014; Schwienbacher and Larralde, 2010).
Historically, the first crowdfunding-based projects were initiated in 1800
to fund the Statue of Liberty's pedestal. In 2000, a website named Arist-
Share was designed to provide a platform for artists to raise funds. The
World Bank (2013) categorized crowdfunding based on four main types.
First, donation-based crowdfunding is purely based on donation and phi-
lanthropy; thus, there is no compensation for the party who provides the
funds. Second, debt-based crowdfunding is based on debt-based contracts.
The crowd lender provides the financing to small businesses or startups
and receives a fixed interest and principal payment at a stipulated time.
Third, reward-based crowdfunding is when the provider of funds receives
an appreciation or reward in the form of a gift or acknowledgment for
supporting the project. Lastly, equity-based crowdfunding is purely based
on the profit and loss sharing mode of financing and is more aligned with
venture capital.
Previous literature on crowdfunding within the context of Islamic
finance has mainly proposed crowding as a solution to the halal industry,
the book publishing industry, startup companies, agricultural activities,
and reviving waqf (Abdullah and Oseni, 2017; Ishak et al., 2021; Hen-
dratmi et al., 2020; Saiti, Musito, et al., 2018; Zain et al., 2019). A few
studies also focused on the development of crowdfunding and its
awareness (Saiti, Musito, et al., 2018; Shofiyyah et al., 2019).
To begin with, Abdullah and Oseni (2017) argue that equity crowd-
funding inherently follows Islamic laws amid its structure of profit and
loss sharing. However, scrutiny of its governance structure, business
M.M. Alshater et al.
Table 5. Islamic FinTech and deposit-lending.
Paper Info Purpose
Peer-to-Peer (P2P) Lending
(Rosavina et This study investigates the
al., 2019) determinant factors of P2P lending
adoption by SMEs.
(Sa'ad et al., This study proposes a new model of
2019) P2P financing based on the
musharakah smart contract (MSC).
(Muhammad et This study investigates the potential
al., 2021) factors which affect the failure of
Islamic P2P lending platforms.
(Ali et al., This study proposes a conceptual
2018) framework for designing the
strategic framework for FinTech
adoption in SMEs in Bahrain.
Crowdfunding
(Abdullah and This study develops a framework and
Oseni, 2017) guidelines for adopting a
crowdfunding platform for halal
SMEs based on shariah-compliant and
Malaysian laws and policies.
(Ishak et al., This study explores the use of
2021) mudharabah based crowdfunding as
the financial source of the book
publishing industry.
(Hendratmi et This research proposes a website
al., 2020) model for startup companies to gain
financial support based on Islamic
crowdfunding contracts.
(Saiti, Afghan, This study investigates the
et al., 2018) possibility for the agricultural sector
to acquire funding support through
salam-based crowdfunding.
(Hapsari et al., This study aims to explore the
2022) expert's opinion and
recommendation regarding
implementing crowdfunding as the
source of funds for waqf land.
Methodology
Content analysis based on a semi-
structured interview with SMEs.
Qualitative method.
SEM approach.
Qualitative method.
Qualitative methods based on
cum-interview and literature
review.
Literature review and semi-
structured interview.
Focus group discussion and in-
depth interview with the experts,
including 16 CEO, two
crowdfunding providers, fiqh,
and technology platform expert.
Library research on existing
studies, Afghanistan's bank
report, and a semi-structured
interview with Islamic scholars.
Semi-structured interview.
17
Results
* The main drivers of P2P lending for SMEs are
lower interest rates, longer repayment terms,
Sharia-compliant loans, profit sharing, and
rejection from traditional institutions such as
banks.
* MSC has become an innovative contract that
combines Islamic financial services and
technology.
* This study proposed an MSC model involving
three parties: business owners, investors, and
P2P companies.
* The collaboration between Islamic banking,
non-banking institutions, and FinTech
platforms will allow SMEs to obtain stable
financial services.
* The failure of Islamic P2P lending has been
significantly attributed to the higher debt
percentage, a more significant proportion of
financing, and a lack of government support.
* The study emphasized that the likelihood of
Islamic P2P lending failing decreases
significantly with increasing sharia compliance
in FinTech operations.
* Shariah board plays a critical role in
preventing the failure of P2P lending by
ensuring its sharia compliance.
* This study identified internal and external
factors influencing behavioral intention to
utilize Islamic P2P financing platforms.
* In Islamic FinTech, TAM has become the most
suitable theory for assessing the customer's
acceptance of blockchain technology.
* The shariah compliance of crowdfunding in
Malaysia should be evaluated extensively
regarding the products and services offered.
* This study recommended that the Securities
Commission draft a new policy for establishing
a shariah-compliant crowdfunding platform for
the halal sector.
* Mudhrababah-based crowdfunding offers a
financial solution for the book publishing
industry, specifically for self-publishers and
small publishers.
* This study proposed a model and described
the mechanism of mudhrababah-based
crowdfunding in the book publishing industry,
which consists of three parties: the publisher,
the funders, and the platform.
* Close monitoring and transparency is
suggested to prevent the risk of mudharabah-
based crowdfunding schemes.
* Islamic crowdfunding offers a financial
solution for small business enterprises and
start-up.
* The website platform has a crucial role in
shaping the advancement of crowdfunding
transactions as it can cross-geographical
investors.
* Salam-based crowdfunding has emerged as a
solution for the agricultural sector's access to
financial resources with the fewest restrictions
possible.
* The cost of the fund is inexpensive; thus, the
investor can secure a competitive dividend.
* Crowdfunding is regarded as an essential and
advantageous instrument for waqf land
development as a source of financing.
* Education on waqf is cited as one of the most
critical components in raising public awareness
Heliyon 8 (2022) e10385
Dropout
This study was limited to SMEs in
Bandung, West Java; thus, the result
of this study does not adequately
represent the situation in all 34
provinces of Indonesia.
This study does not provide a
comprehensive discussion on the
concept and application of the MSC
model.
This study might have more
significant implications if it involved
P2P stakeholders across the country.
This study offers a theoretical
contribution by providing a research
framework that future studies can use
to identify determinant factors of P2P
lending adoption. However, it does
not offer a significant practical
contribution.
This study concentrated on Malaysian
crowdfunding, particularly the
mudarabah contract. Thus, the result
could not be applied to other contracts
or jurisdictions.
The suggestion of this study would have
been more applicable if this study had
discussed further how to minimize the
risk of applying the proposed model.
One of the limitations of this
explanation is that it has not yet been
considered the financial institutions,
i.e., banks, which are also involved in
the payment system.
This study would have been more
valuable if it had included experts
from various continents to present a
broad input.
This study lacks reviewing the
empirical evidence and study case of
existing CWM in Muslim majority
countries.
(continued on next page)
M.M. Alshater et al. Heliyon 8 (2022) e10385

Table 5 (continued )
Paper Info Purpose
(Afroz et al., This study assesses the probability of
2019) implementing crowdfunding as
renewable energy and low-carbon
funding source for Malaysian
households.
(Zain et al., This research aims to resurrect waqf
2019) in Thailand by utilizing a
crowdfunding mechanism.
(Kazaure et al., This study examines the determinant
2021) factors that influencing online
crowdfunding adoption by SMEs
owners in Northwestern Nigeria.
(Salim et al., This manuscript assesses the
2021) influencing factor of intention to
accept crowdfunding by young
entrepreneurs.
(Baber, 2020b) This research investigates the impact
of FinTech implementation in
Islamic banking on customer
retention in Malaysia and the UAE.
(Saiti, Musito, This paper analyzes the differences
et al., 2018) between conventional and Islamic
crowdfunding and presents the ideal
crowdfunding contract model.
(Ishak and This study investigates the potential
Rahman, 2021) in implementing crowdfunding
based on mudharabah with the
support of FinTech.
(Rahman et al., This paper proposes a model for
2020) implementing Islamic
crowdfunding-based equity for
startups and small businesses.
(Shofiyyah et This research examines the main
al., 2019) issues in crowdfunding, namely,
willingness, motivation, and
awareness to donate.
(Baber, 2021) This study analyzes the factor affecting
the adoption of crowdfunding
platforms based on TAM.
Methodology Results
about crowdfunding waqf land (CWM). As a
result, the education program on waqf should
be implemented in various organizations,
including schools, mosques, government
offices, and social groups.
A quantitative approach based * The adoption of crowdfunding to realize
on questionnaires. renewable energy and low-carbon households
is an effective solution to high initial costs and a
lack of the best possible price in implementing
green energy.
* Proposes a model for implementing
crowdfunding for sustainable energy at the
household level.
Qualitative method. * The level of public trust in crowdfunding and
the existence of legal administration and
regulation of waqf and crowdfunding
significantly impact the program's success.
PLS-SEM method. * The Technology Acceptance Model (TAM)
theory significantly influences how SMEs
intend to use the online crowdfunding platform
as a source of funding.
* Social media promotion and education related
to crowdfunding should intensify as it
effectively prompts the SME's intention to
adopt crowdfunding.
PLS-SEM method. * The intention of the young entrepreneur is
significantly shaped by perceptions of
usefulness, ease of use, self-efficacy, Islamic
platform, and financial accessibility.
* Social influence does not have a substantial
impact on youth intentions.
* The crowdfunding system is argued to have
evolved into the best financing option for young
entrepreneurs from a risk and intervention cost
perspective.
Quantitative approach by using * The use of FinTech by Islamic banks improves
primary data from 535 the efficiency of consumer financial
customers. transactions. As a result, the more satisfied
customer, the longer they stay with the bank.
* The integration of the crowdfunding financing
system with an Islamic bank significantly
increases the possibility for the business owner
to find a new source of funding and hastens the
distribution of zakat and sadaqah.
Qualitative method. * Partnership based on mudharabah and P2P
lending based on murabaha promise an
adequate alternative in promoting economic
development.
* Islamic P2P crowdfunding mainly faced
specific problems, including shariah-compliant
issues, fraud cases, regulatory issues, project
assessment, and secondary market.
Semi-structured interview with * The integration of crowdfunding based
thematic analysis. on mudharabah contracts, specifically equity-
based, carries higher risk, particularly for the
funders.
* The law and regulations that ensure the
security and legality of crowdfunding are still
insufficient.
SEM method. * Crowdfunding allows entrepreneurs to
acquire capital more quickly and affordably.
* Business owners tend to feel insecure when
they share the business idea online due to the
possibility of being copied.
Qualitative method via * The crowdfunding mechanism has shown
interview. tremendous potential, indicated by the high
willingness to donate. However, the
actualization of crowdfunding remains low.
* Non-economy and social return become the
most important motivation for donating in
crowdfunding.
SEM method. * Shariah regulation has a tremendous impact
on broadening the market share for the Islamic
crowdfunding platform.
Dropout
This study addresses that cost
becomes the most prominent factor
limiting the household's use of
renewable energy. Thus, discussing
the estimated cost of implementing
the model will provide valuable
information for practitioners.
This paper will be more interesting if
it undertakes the opinions of shariah
scholars.
This study concentrates on
Northwestern Nigeria. Consequently,
the finding might be irrelevant for
other countries and communities.
This study will be more insightful by
adding the impact of digital or social
media marketing on youth
entrepreneurs' intention to accept
crowdfunding as the younger
generation are active social media
users.
The conceptual framework of this
study will be more comprehensive by
adding TAM and UTAUT theory. As a
result, the discussion will be more
insightful regarding the customer's
acceptance of adopting new
technology.
A weakness of this finding is the lack
of an expert's viewpoint.
This study only involved Malaysian
experts; thus, the finding might not
represent the other country's
condition.
This study was conducted in Malaysia.
Therefore, the result might not apply
to other countries.
This approach fails to consider the
quantitative data, which can
strengthen the discussion and findings
of this study.
Other countries cannot fully adopt the
suggestion of this study as it is focused
on Malaysia.

18
M.M. Alshater et al. Heliyon 8 (2022) e10385

Figure 4. Keyword analysis.

model, and products offered under the umbrella of equity crowdfunding
is required. In detail, Ishak et al. (2021) assess the possibility of imple-
menting mudharabah-based crowdfunding for the book publishing in-
dustry, specifically self-publishers and small publishers. This study
proposes a framework of mudharabah crowdfunding consisting of three
parties: First, the publishers, as the mudharib (who have the professional
capability of producing and publishing books), should offer detailed and
transparent information regarding the business plan and profit estima-
tion. Second, the platform is the agent who bridges the publisher and
funders; the platform's responsibilities include marketing the books and
promoting the publisher to obtain more funding sources. Third, the
funders, such as the rab al-Mal, should have a clear and comprehensive
understanding of the loss and return from the contracts and business
activities.
Equity crowdfunding can be a good source of external financing,
especially for halal SMEs, which struggle to get financing from financial
institutions. Likewise, Hendratmi et al. (2020) proposed an innovative
crowdfunding model by developing a website that will not only provide a
good source of generating funds but also help connect geographically
diversified investors. In a similar vein, Saiti, Afghan, et al. (2018) sug-
gested Salam-based crowdfunding for the agriculture industry to have ac-
cess to funds. Moreover, a few studies also recommended crowdfunding

Figure 5. Topics concern over the past years.

19
M.M. Alshater et al. Heliyon 8 (2022) e10385

Table 6. Future research direction.

Research Stream No. Future Research Questions References

FinTech 1. Does Islamic FinTech have a similar impact on Islamic and conventional banking (Baber, 2020c)
performance?
2. A comparative study on banking performance that providing and not providing FinTech (Almulla and Aljughaiman, 2021)
services.
3. How the theory of planned behavior contributes to Islamic FinTech services adoption? Author's suggestion
4. Problems, solutions, and a strategic priority for Islamic FinTech: Analytic Network Process Author's suggestion
approach.
5 How does Islamic FinTech promote Sustainable Development Goals? Empirical evidence (Hudaefi, 2020)
Cryptocurrency: Islamic perspective, 6. Previous literature on the permissibility of cryptocurrencies shows diverse opinions and (Abozaid, 2020; Y. S. Abubakar
Development, and Performance interpretations on its nature and status under Islamic laws. Thus, future studies are required et al., 2018; Hammad, 2018)
to propose a uniform and standardized framework towards the permissibility of
cryptocurrency.
7. N. Khan et al. (2022) propose the conceptual model on tokenization of Sukuk, however, it is (N. Khan et al., 2022)
limited to murabaha Sukuk. But we are not aware whether such a model can be applied to
other types of Sukuk.
8. Is there a contagion effect between Islamic and conventional cryptocurrencies? Author's Suggestion
9. What are the social impacts of Sukuk tokenization? (Delle Foglie et al., 2021)
10. The predicting factors of customer's behavioral intention to adopt bitcoin technology: SEM- Author's Suggestion
PLS approach.
11. Comparison of adoption rate of cryptocurrency in a country introducing digital fiat money
Financial inclusion 12. What are the challenges of financial inclusion beyond the adoption of financial technology by Author's Suggestion
the masses?
13. How does financial inclusion affect the financial well-being of a society and the economic Author's Suggestion
growth of a country?
14. How Qardh-Al-Hasan, zakat, waqf, and Islamic microfinance affect the economic growth of a (Zauro et al., 2020)
poor and vulnerable section of society and its role in financial inclusion?
15. How FinTech based Qardh-Al-Hasan, zakat, waqf, and Islamic microfinance can be utilized to Author's Suggestion
help COVID 19 affected poor and help in financial inclusion?
16. How do the theory of planned behavior and the theory of production function contribute to (Arsyianti and Kassim, 2018)
financial inclusion?
17. Impact and role of Islamic banking in achieving financial inclusion. (Khmous and Besim, 2020)
18. Financial inclusion and financial growth; are they related? Author's Suggestion
19 What role Islamic microfinance institutions can play in achieving the objective of financial (Nabi et al., 2017)
inclusion?
20. Zakat and financial inclusion nexus: Empirical evidence from the Muslim countries around (S. Khan et al., 2019)
the world.
21. Role of Islamic Microcredit and Microfinance in financial inclusion of poor. (A. Hassan, 2015)
Blockchain 22. What is the risk-return trade-off between blockchain-based and Sukuk and traditional Sukuk? (N. Khan et al., 2022)
23. What are the future challenges of blockchain adoption in Islamic finance institutions. Author's suggestion
24. How to integrate Blockchain into various Islamic finance business models. Author's suggestion
Crowdfunding & P2P Lending 25. Factors influencing the adoption of P2P lending evidence based on TAM theory. (W. Ali et al., 2018)
26. P2P lending: a competitor or collaborator for the banking industry? Author's suggestion
27. The intention to adopt crowdfunding amongst the youth entrepreneur with the role of social Author's suggestion
media as the moderating factor.
28. Factors determining behavioral intention to use Islamic P2P lending: Empirical evidence (Rosavina et al., 2019)
29. Evaluating the opportunities and challenges in implementing crowdfunding. Author's suggestion
30. Qualitative research based on Focus Group Discussion on “What are the determinants of (Muhammad et al., 2021)
Islamic P2P lending potential failure?”
31. Credit risk assessment on Islamic P2P lending platforms that adopted blockchain technology: (Al-Sakran and Al-Shamaileh,
A conceptual model. 2021)

based on the waqf model, especially in non-Muslim countries (Zain et al.,
2019). Furthermore, by conducting semi-structured interviews with the
experts, Hapsari et al. (2022) also found that crowdfunding offers a sus-
tainable fund source to develop waqf lands. In another case, Afroz et al.
(2019) declare that implementing crowdfunding for financing solar energy
in Malaysian households is possible. This study underlines that the most
profound factors affecting the model's acceptance are income, household
size, and knowledge about climate change. In a nutshell, the findings of
these studies agree that Islamic crowdfunding contributes substantially to
escalating business performance in various fields of business. Especially for
small-medium-sized enterprises, the owners can obtain additional fund
resources based on shariah contracts, such as mudarabah, musyarakah, and
salam. Hence, it is suggested that the government take significant action to
optimize crowdfunding platforms as a source of funds.
The development of the crowdfunding market depends on the market
structure and economic development, advancement in the regulatory
framework, and IT infrastructure. Moreover, Kazaure et al. (2021)
described that social media and crowdfunding information also signifi-
cantly shape SME owners' intention to obtain additional funding support
from online crowdfunding, which boosts the massive growth of crowd-
funding platforms among business people. Similarly, Salim et al. (2021)
assess the determining factors of young entrepreneurs' intention to obtain
business funds from the crowdfunding system in Malaysia. This study
highlights that perceived ease of use and usefulness play a vital role in

20
M.M. Alshater et al.
influencing young entrepreneurs' intention to accept crowdfunding.
Hence, crowdfunding is expected to increase SMEs' performance and
promote economic growth. Another research by Baber (2020b) found
that integrating FinTech, particularly crowdfunding, into the Islamic
banking system will escalate the business cycle of social entrepreneurship
and micro-finance and build a firm platform for the global Islamic phi-
lanthropy system. Global crowdfunding is growing at 44%, with total
assets of USD 290 billion to USD 418 billion from 2016 to 2017,
respectively (Ziegler et al., 2020).
Despite this unprecedented growth, the crowdfunding market is also
subject to some limitations especially within the framework of Islamic
jurisprudence. Foremost and the important one is the regulatory im-
pediments that further restrict its growth. For example, a crowdfunding
model is required for credit insurance to eliminate the credit risk. Since
Islamic equity crowdfunding is based on the mudharabah model, it is a
matter of concern whether the profit distribution mechanism follows the
law of the country. Islamic crowdfunding is strictly allowed for busi-
nesses that are deemed permissible in Islam and not allowed to have a
conventional lending approach i.e., involvement of interest (Saiti,
Musito, et al., 2018). Lastly, frauds and scams are the major threats in
establishing a stable crowdfunding market regardless of its structure and
model (Ishak and Rahman, 2021). Besides, from the business owner's
perspective, by involving in an online crowdfunding platform, the pos-
sibility of their business ideas will be copied higher. Thus, they are
reluctant to share their detailed information online. Hence, they tend to
become more hesitant to obtain funding from online crowdfunding
(Rahman et al., 2020). Consequently, there is a dire need for awareness
among all the stakeholders and institutionalize it at the macro-level,
including establishing shariah regulation for crowdfunding platforms
(Shofiyyah et al., 2019; Baber, 2021). Table 5 further summarizes the
prior literature in this stream.
4.2. Future research direction
This section discusses the general features of the literature based on
bibliometrics and content analysis; to draw the research gap from the
previous studies.
First, the total of number of papers reviewed using content analysis is
85 documents, divided into five streams. In detail, Islamic FinTech and
deposit-lending consisting of cryptocurrency and blockchain sub-streams
became the most discussed topics with 39% (33 out of 85 papers). The
general analysis of the FinTech topic and the financial inclusion topic has
attracted around 23%, followed by Islamic FinTech related to deposit and
lending, consisting of two sub-streams, namely P2P lending and crowd-
funding sub-streams (22%). Moreover, financial inclusion has become
the least popular topic studied by researchers, as only 13 papers (15%)
have been found in the Scopus database. Specifically, in terms of sub-
theme topics, P2P lending has become the most underexamined topic,
with only four publications in this field.
In the disruptive era, industry 4.0, automation, and artificial intelli-
gence, including Robo advisors in finance, have shown unprecedented
growth with the possibility of replacing human resources (X. Wang et al.,
2021). However, Islamic investment has specific criteria that should
follow shariah compliance, thus, calling attention to this topic. Second,
the current development of Islamic FinTech studies was heavily con-
ducted in Asian countries with Muslim majorities, including Malaysia,
Indonesia, Pakistan, and Nigeria. Therefore, it is suggested that studies
on these topics could be extended to other Muslim countries in the MENA
beside some other non-Muslim majority countries.
Lastly, the research method. Previous studies on crowdfunding, P2P
lending, blockchain, and financial inclusion were mainly qualitative.
These investment instruments are at the initial stage of integrating with
Islamic finance. Thus, it required more quantitative and conceptual anal-
ysis regarding the models and shariah compliance. On the other hand, the
existing studies on the FinTech stream mainly discussed quantitative
methods based on secondary or primary data. Moreover, in recent years,
21
Heliyon 8 (2022) e10385
the prior studies on this stream have investigated the determinant factors
of intention in using FinTech, as visualized in Figures 4 and 5.
Table 6 provides a list of future research directions.
5. Conclusion
This study portrayed a comprehensive literature development on Is-
lamic FinTech sourced from the Scopus databases, covering a period from
2017 to 2022. The study identified four streams that dominated the
discussion of Islamic FinTech literature based on content analysis using
the SLR-PRISMA approach. In detail, financial technology (customer
perception towards Islamic FinTech, 8 articles, and Islamic FinTech
development and its impact on Islamic Finance Institutions, 12 articles);
Islamic FinTech and distributed ledger technology (Cryptocurrency 25
articles, and Blockchain, 8 articles), financial inclusion (13 articles); Is-
lamic FinTech and deposit-lending (P2P Lending, 4 articles, and
Crowdfunding, 15 articles).
By conducting a content analysis on each stream, we reveal that the
cointegration of FinTech in Islamic finance has enormous potential in
elevating socio-economic development, particularly for the underdevel-
oped community, unbanked people, and small-medium-sized businesses.
In addition, the adoption of FinTech in Islamic finance will support the
government in improving financial inclusion, conquering financial crises,
such as COVID-19's crisis, and achieving SDGs for a sustainable nation.
However, the lack of laws, legal regulations and the lower financial lit-
eracy become the primary obstacles preventing the development of
FinTech in Islamic finance. Additionally, based on the previous research's
results, this study underlined that the shariah compliance of crypto-
currency and blockchain is still inconclusive with tendency toward
rejection of cryptocurrency as a meduim of exchange.
Aside from its theoretical and practical implications, this study has a
limitation as it only utilized papers indexed by Scopus.
Declarations
Author contribution statement
Muneer M. Alshater Conceived and designed the experiments;
Analyzed and interpreted the data; Contributed reagents, materials,
analysis tools or data; wrote the paper.
Indri Supriani: Conceived and designed the experiments; Analyzed
and interpreted the data; Contributed reagents, materials, analysis tools
or data; wrote the paper.
Irum Saba & Mustafa Raza Rabbani: Analyzed and interpreted the
data; wrote the paper.
Funding statement
This research received no specific prior grant from any funding
agency in the public, commercial, or not-for-profit sectors.
Data availability statement
Data included in article/supp. material/referenced in article.
Declaration of interests statement
The authors declare no conflict of interest.
Additional information
No additional information is available for this paper.
M.M. Alshater et al. Heliyon 8 (2022) e10385

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