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<p>Despite the rapid growth of Islamic FinTech, Islamic banks face significant challenges in integrating digital technologies while maintaining Sharia compliance, with only 38% possessing robust digital monitoring systems. This study examines how financial technology influences Islamic banking transaction effectiveness and Sharia compliance within Jordan’s Islamic banking sector. Drawing on data from a stratified random sample of 283 employees across seven Islamic banks, the research explores the impact of four key FinTech dimensions: infrastructure investment, staff technological competence, regulatory technology implementation, and digital compliance monitoring systems. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to analyze the relationships between these variables and two outcomes—transaction effectiveness and Sharia compliance. The findings reveal that financial technology significantly enhances transaction effectiveness, with infrastructure investment exerting the strongest influence. Most FinTech dimensions also positively affect Sharia compliance, although digital compliance monitoring systems did not show a significant impact. These results suggest that technological tools must be accompanied by appropriate institutional and jurisprudential support to ensure religious alignment. By integrating the Technology Acceptance Model and Institutional Theory, the study provides empirical evidence and offers insights into digital transformation in Islamic finance. The findings provide practical guidance for improving operational efficiency and religious compliance in Islamic banks through targeted technological strategies.</p>

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The role of fintech in improving Islamic banking transactions and Sharia compliance: evidence from Jordan

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2026年7月9日

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  • Ahmad Hisham Alnajjar

摘要

Despite the rapid growth of Islamic FinTech, Islamic banks face significant challenges in integrating digital technologies while maintaining Sharia compliance, with only 38% possessing robust digital monitoring systems. This study examines how financial technology influences Islamic banking transaction effectiveness and Sharia compliance within Jordan’s Islamic banking sector. Drawing on data from a stratified random sample of 283 employees across seven Islamic banks, the research explores the impact of four key FinTech dimensions: infrastructure investment, staff technological competence, regulatory technology implementation, and digital compliance monitoring systems. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to analyze the relationships between these variables and two outcomes—transaction effectiveness and Sharia compliance. The findings reveal that financial technology significantly enhances transaction effectiveness, with infrastructure investment exerting the strongest influence. Most FinTech dimensions also positively affect Sharia compliance, although digital compliance monitoring systems did not show a significant impact. These results suggest that technological tools must be accompanied by appropriate institutional and jurisprudential support to ensure religious alignment. By integrating the Technology Acceptance Model and Institutional Theory, the study provides empirical evidence and offers insights into digital transformation in Islamic finance. The findings provide practical guidance for improving operational efficiency and religious compliance in Islamic banks through targeted technological strategies.