ISSN: 2225-8329
Open access
Fintech is rapidly growing, which leads to the development of new business models. Blockchain, artificial intelligence (AI), robotics, and other novel business models have become a big challenge to the banking industry in Malaysia, which includes both conventional and Islamic finance. Fintech is a promising option that can be tailored to the demands of people from different walks of life. The Fintech industry is still in its infancy, but it has enormous potential for rapid expansion. However, in order to harness such potential and make effective use of it, a conducive ecosystem is required. This study presents empirical evidence on the factors driving the emergence of Fintech in Islamic financial institutions in Malaysia, as well as those that may promote or inhibit its use in the future. A study of 311 employees from Islamic financial institutions in Malaysia was conducted and quantitative results demonstrated that favourable ecosystem is the most important issue driving Fintech growth in the Malaysia Islamic institutions followed by favorable skill set, funding, security, and stability. Nevertheless, government regulation, difficulty in transitioning to new technology, cost, and technology limits are all stumbling blocks for Fintech development in Islamic banking in Malaysia. As a result, government regulation is required to establish conducive policy for assuring the technology's long-term viability and expansion. Furthermore, the results suggest that the financial sector would be the most disrupted by Fintech. This current trend may aid decision-makers in assessing the technology's potential for use, enabling them to make strategic decisions in order to improve the firm and its capabilities
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In-Text Citation: (Jaafar et al., 2021)
To Cite this Article: Jaafar, M. N., Muhamat, A. A., Hatta, M. F. bin M., & Alwi, S. F. S. (2021). Fintech Development in Financial Institutions Industry: An Empirical Study on Malaysia Islamic Banks. International Journal of Academic Research in Business and Social Sciences, 11(3), 487–499.
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