THE FUTURE OF ISLAMIC DIGITAL BANKING IN PROMOTING FINANCIAL INCLUSION IN MALAYSIA

• Main Authors: Mohd Salimin, Mohd Ariff, Ellias, Abdul Rahman, Redzuan, Nur Harena, Kassim, Salina
• Format: Proceeding Paper
• Language: English; English
• Published: 2024
• Subjects: HG3368 Islamic Banking and Finance
• Online Access: http://irep.iium.edu.my/112262/1/ICONIE2024_03%20Islamic%20Digital%20Bank.pdf; http://irep.iium.edu.my/112262/7/proceeding-icsc2024-compressed.pdf; http://irep.iium.edu.my/112262/; https://ircief.kuis.edu.my/the-3rd-iconie-2024-e-proceeding/

Digital banks provide financial services and customers’ interactions using digital platform technologies without physical branches. They use modern technologies to simplify financial transactions and improve customer banking experiences. The study aims to assess how Malaysia's two Islamic digital banks can promote the financial inclusion goals. This qualitative study examines digital bank development to identify potential concerns, obstacles, and solutions for Islamic digital banks in Malaysia. Islamic digital banks face commercial sustainability, digital financial product and service delivery, Shariah, and operational concerns, according to the study. The study recommends prioritizing customer segments and leveraging Islamic digital banks' digitalization potential to achieve financial inclusion in Malaysia. The study only covers the emergence of Islamic digital banks in Malaysia; therefore, its findings may not apply to conventional banks or those in other regulatory settings. The study recommends customer segmentation and digital potential to unlock inclusion initiatives, adding a new viewpoint to Islamic finance's digital banking conversation.