Islamic Fintech: Disruption of Islamic Finance or Digitalization of Conventional Financial Practices?

Abstract

The development of financial technology (fintech) has significantly transformed the contemporary financial industry by enabling payments, financing, investment, and fund transfers through rapid and flexible digital platforms. In Islamic economics, this transformation has given rise to Islamic fintech, which seeks to integrate digital technology with Islamic principles. While Islamic fintech is often regarded as an innovation capable of expanding financial access and improving efficiency, it also raises a critical question: does it truly disrupt the paradigm of Islamic finance, or does it merely digitalize conventional financial practices through Sharia-compliant contracts and Islamic identity? This study analyzes the position of Islamic fintech by examining the relationship between digital technology, Sharia compliance, business models, profit orientation, financial inclusion, consumer protection, and maqashid al-shariah. A qualitative approach is employed through a critical literature review of Islamic fintech, Islamic finance, digital finance, Islamic economics, and maqashid al-shariah. The findings indicate that Islamic fintech can become a genuine instrument of disruption when technology promotes justice, transparency, productive financing, consumer protection, and social welfare. However, when digitalization only changes transaction channels without transforming economic orientation and social impact, Islamic fintech risks becoming conventional finance under a Sharia-based identity. Therefore, evaluation should move beyond sharia compliance toward sharia impact, with maqashid al-shariah serving as a substantive evaluative framework.