Digital Transformation in Islamic Banking

Purpose: The purpose of the study was to give a critical overview of the digital transformation in Islamic Banking. General Statements: The study uses a descriptive approach to provide an overview of the technologies in digital transformation in Islamic banking, the challenges encountered in its adoption for the Islamic banking industry, the risks, and the benefits that come with it. Discussion: Customer value and satisfaction are the major rationale for digital banking in the Islamic banking sector and are evidently seen by the digital transformations in its sector. Islamic banking has experienced tremendous growth in digital transformation with innovations such as mobile applications and internet banking, distributed ledger technology, and end-to-end digital payment platforms. However, while these transformations have created efficiency in Islamic banking operations, they have brought risks related to cybersecurity, which is a major threat. Conclusion: Guided by Sharia principles, digital transformations continue to grow, and their impact significantly contributes to consumer satisfaction.