Islamic Finance in the Digital Age: Fintech as a Civilizational Tool

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

The article is written in a clear and understandable manner but more as a normative essay of what should be done rather than an academic research paper. As such, the originality and its contribution to scholarship are not fully clear. The title is very strong and thus demanding, and the content is not following up.

Connections are made between Islamic finance and the digital age by referring to trends like CBDCs and private digital assets, and section 6 – Fintech as a Civilizational Tool in Islamic Finance – is also touching the subtheme of Fintech as a Civilizational Tool, but overall, as mentioned, the text is opening up themes it does not analyze, research, or solve them. For example, “IFI can indeed lead as the beacon of righteous and socially-inclusive SFSs globally if well-managed” (p.2) opens up a possible theme, but the author does not examine what “well-managed” means in analytical or empirical terms. Similarly, “it is high time that we deliberate on how Islamic regulations can accommodate these new forms of money and payment” (p.2), but it does not deliberate it. Similar potential leads are to be found throughout the paper. I suggest connecting the themes to literature that is either related to these themes in the field of Islamic finance, or even conventional finance, providing the readers insights into current deliberations and empirical evidence, and opening the space for future studies.

It is claimed that the paper “investigates the connection between Islamic finance and fintech within the context of civilizational renewal. It examines the ways in which fintech can be employed as an instrument to facilitate the objectives of Islamic finance, including facilitating justice, financial inclusion, and social welfare” (p.2). However, in practice the paper provides definitions and normative assertions without substantiating the claims with original research or with appropriate existing literature. It also states as an objective that it will “contribute to the existing literature in the field of Islamic fintech by offering both theoretical and practical understanding” (p.3).While the theoretical aspect might be considered to be partially fulfilled, the practical is omitted. “The study outcomes are likely to help the researchers, practitioners, and policymakers...” (p.3) is overpromising given that there is no real study of any specific issue in particular. Again, I see the potential of this paper in providing connections to existing literature (theoretical and empirical).

As mentioned, claims and statements like “what is right and fair for ‌‌everyone”, “to share money in a fair manner, and to make sure that everyone is doing well”, “conventional finance has been focused on efficiency, profit maximization, and shareholder value, Islamic finance places the economic activity within an ethical and civilizational framework”, “Islamic fintech can rejuvenate the ethical aspect of finance by introducing the elements of transparency, fairness, and inclusivity to the digital platforms” make the article read like a manifesto instead of a research paper. These and similar statements should be reduced (if not eliminated) or substantiated with empirical studies.

Overall, given the broad scope of the topic, I would suggest to significantly expand the literature. Also, I strongly feel that repeated normative statements and statements of superiority of Islamic finance over conventional finance, including the statements of capacity of Islamic fintech to ensure transparency, fairness, and inclusivity, must be either toned down or supported by literature and empirical evidence in order to be acceptable as an academic text.

Author Response

Thank you very much for taking the time to review this manuscript and for your constructive feedback. We appreciate the insightful comments from all reviewers, which have significantly strengthened the manuscript. We have carefully considered all suggestions and have made substantial revisions where appropriate. 

Reviewer 2 Report

Comments and Suggestions for Authors

The paper is very good a review article and I think it is a good starting point for further original research. 

 

• What is the main question addressed by the research?
As I said earlier, the research (and research question) is very interesting, because it tries to highlight ways how technology in the field of finance (Fintech) can help Islamic finance to achieve its primary goal: to be a just alternative to the conventional financial system. Islamic finance has been accused of mimicking conventional financial contracts and therefore having a lack of substance. This problem is addressed by the paper in the introduction. The paper successfully argues, after introducing major pillars in Islamic finance and developments in Fintech, in section 5 (The Role of Fintech in the Evolution and Expansion of Islamic Finance), how developments in technology can help to return to the essence of Islamic finance and how it can become a real alternative in finance.

• Do you consider the topic original or relevant to the field? Does it address a specific gap in the field? Please also explain why this is/ is not the caste.
The manuscript dives into the major issue of Islamic finance - how to "islamise" it again, i.e. how to return to the core principles of Islamic finance (prohibition of riba-interest, gharar and maysir) and implement these prohibition in modern finance. As, theory of Islamic finance emphasizes socio economic justice (the authors presented this in section 2), the use of technology, e.g. crowdfunding, P2P lending, can help to democratise the process of financing and help to increase the usage of partnership-based contracts in today's Islamic finance. This is a very important point, according to me, and is one of the major values of this manuscript.

• What does it add to the subject area compared with other published material?
The paper goes a step further and highlights the need for Islamic finance to be sustainable and not look only on the profit side. The paper has a clear argumentation in section 6, by analysing trends in Islamic finance and Fintech. Especially the question of trust can be solved by using smart contracts etc., which is in line with general research.

• What specific improvements should the authors consider regarding the methodology?
The Methodology is clear and based on state-of-the-art research in the field of Islamic finance and Fintech. Combining knowledge in both fields makes the paper attractive, not only for scholars, but also for practitioners. In future publications, a concrete empirical study (Islamic fintech start-ups, for example) should be carried out in order to verify the hypotheses mentioned in the paper. 

• Are the conclusions consistent with the evidence and arguments presented and do they address the main question posed? Please also explain why this is/is not the case.
Conclusion answers the question from the introduction and there is a clear line in the argumentation.

• Are the references appropriate?
The references are very up-to-date and mention major research in Islamic finance in Fintech. 
• Any additional comments on the tables and figures.
No

Author Response

Please find attached point-by-point responses on your comments.

Author Response File: Author Response.pdf

Reviewer 3 Report

Comments and Suggestions for Authors

Be careful with acronyms, v frustrating!

Support dated definitions with contemporary references, please.

Ok, my frustration with this paper is that whilst it provides a chronological journey through the development of Islamic Finance as 'alignment' with evolution of Fintech it reads as a narrative and leads to a conclusion that in combination these two will lead to restored ethicality and empowerment of the disadvantaged. This is an ambitious claim and as a contribution to the academy it should be providing something more conceptual than claims that fintech is a solution rather than a component in a complex financial ecosystem. This addition is not extensive but goes beyond description of financial tools and systems to place them in a context/ecosystem which shows the working of the claim: conceptualisation rather than claim.

 

 

Author Response

My comments are attached.

Author Response File: Author Response.pdf

Reviewer 4 Report

Comments and Suggestions for Authors

The manuscript addresses a timely and important topic, the intersection of Islamic finance and fintech and it provides a useful high-level overview of key domains (CBDCs/digital money, blockchain/tokenisation, AI, open banking, regtech). However, in its current form the paper reads largely as a broad narrative survey and would benefit from substantial tightening and a clearer scholarly contribution. In particular, I recommend (i) defining and operationalising “fintech as a civilizational tool” with explicit evaluative criteria (e.g., how specific fintech design choices advance maqāṣid/maṣlaḥah and reduce riba/gharar/exploitation); (ii) adding a brief methods note explaining how “significant scholarly and business reports” were identified and selected; (iii) strengthening the originality by presenting a concrete analytical framework (ideally a table/figure mapping fintech functions to maqasid objectives, risks, and governance controls) and applying it in one or two deeper case analyses (e.g., CBDC programmability/privacy/negative interest features; AI credit scoring and bias/explainability; smart-contract governance for tokenised sukuk); (iv) verifying and precisely stating all quantitative claims (transactions vs value; users vs consents; time periods) with robust citations; and (v) editing for academic tone and clarity by reducing repetitive statements and moderating promotional/advocacy language. Addressing these points would significantly improve the manuscript’s rigour, readability, and publishability.

Author Response

My comments are attached.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

The paper has improved in quality, and all additions are useful.

The article is now clearly defined as a narrative literature review supplement by industry analysis. This actually strengthens my comment that the literature supporting the narratives should be enlarged and overall narrative approach improved. This could be done by means of a clearer sources/references selection criteria.

The potential for a richer narrative is clearly shown in section 3. “Modern Money, Digital Assets, and Shari’ah Implications”, where CBDCs are represented by means of their benefits and without literature that might be critical to this narrative (even from conventional perspective) implying approval, while decentralized cryptocurrencies are represented as controversial. In both cases, the references and highlighted issues remain scarce. The discussion could include issues like state surveillance of transactions, dangers to civil liberties, etc. See https://doi.org/10.61093/fmir.7(4).54-66.2023, http://dx.doi.org/10.1016/j.ribaf.2022.101736. The introduction of digital currencies, and especially CBDCs deserves a wider overview of the discussion of issues and how CBDC compare to private DCs. We have no insights into the state of concepts being discussed, contradictions, unsolved issues. And while the concerns are covered in the statement “IFIs have to decide whether new monetary instruments like CBDCs and stablecoins are in line with Shari’ah law” (p.5) a richer overview of the issues would increase the quality of the paper and the narrative.

The major and most important addition was done in 6. Fintech as a Civilizational Tool and it has contributed much to the quality of the paper.

The text still has a significant number of claims related to advantages of Islamic finance and fintech related to justice and welfare that are not supported by evidence. I suggest a strong down-toning of these claims to better reflect a scholarly approach, or to provide references and empirical evidence to support them. Statements like “to make sure that everyone is doing well”, “what is right and fair for everyone”, “While conventional finance has been focused on efficiency, profit maximization, and shareholder value, Islamic finance places the economic activity within an ethical and civilizational framework.”, “IFI can indeed lead as the beacon of righteous and socially-inclusive SFSs globally if well-managed.” in its current form are non-scientific, but if used as a starting point for an overview of literature and ongoing discussions, they could serve well.

Author Response

Dear Reviewer,

Thank you very much for taking the time to review this manuscript. Please find the detailed responses and the corresponding revisions/corrections in the re-submitted files. The full responses are attached.

Regards,

Author Response File: Author Response.pdf

Reviewer 4 Report

Comments and Suggestions for Authors

Section 6, “Fintech as a Civilizational Tool: Criteria and Framework,” advances an ambitious conceptual framework, but it is not adequately supported by primary or secondary sources. The proposed criteria are largely asserted rather than derived from sustained engagement with classical Islamic legal scholarship, contemporary juristic or regulatory sources (such as fatwas or AAOIFI standards), or the existing academic literature on Islamic fintech and ethical governance. As a result, the framework appears aspirational rather than analytically grounded.

 

Author Response

Dear Reviewer,

Thank you very much for taking the time to review this manuscript. Please find the detailed responses and the corresponding revisions/corrections in the re-submitted files. The full responses are attached.

Regards,

Author Response File: Author Response.pdf

Round 3

Reviewer 1 Report

Comments and Suggestions for Authors

The additions to the paper are again very useful and have further improved the quality of the paper. Section 3 has improved significantly, and also the advantages of Islamic finance and fintech have been toned down. Hence, the paper is more insightful and has a clearer academic tone. 

Despite the mentioned improvements, the paper could still benefit from two points:

1. The literature could be further broadened - and I mean with a more diverse authorship - in order to enhance the critical dimension of the narrative. 
2. Some transitions between sections and arguments could be improved for a smoother flow. 

I leave it to the editor to assess whether these additional changes are sufficiently addressed in the revised version. 

Author Response

The comments are in the attached document.

Author Response File: Author Response.pdf

Reviewer 4 Report

Comments and Suggestions for Authors

It is acknowledged the authors’ careful engagement with the reviewer’s concerns and the substantive revisions made to Section 6. The additional references to classical maqasid theory, contemporary Islamic finance scholarship, and relevant regulatory standards strengthen the conceptual coherence of the framework and clarify its intellectual lineage. These revisions help demonstrate that the evaluative criteria are grounded in established jurisprudential and regulatory sources rather than being purely normative or aspirational.

That said, while the framework is now more clearly situated within the existing literature, it would benefit from further grounding, particularly through deeper engagement with contested scholarly debates and, where possible, illustrative empirical or applied examples. As currently presented, the framework remains largely abstract, and its analytical robustness would be enhanced by clearer demonstration of how these criteria operate in practice, respond to regulatory tensions, or are reflected in real-world fintech or digital finance contexts. Strengthening this dimension would help bridge the gap between conceptual synthesis and demonstrable analytical application.

Author Response

The comments are in the attached document.

Author Response File: Author Response.pdf