6th INTERNATIONAL CONFERENCE ON ISLAMIC FINANCE

EVOLVING ETHICAL NARRATIVES: ISLAMIC FINANCE IN A SUSTAINABLE WORLD

The Maqasid al-Shari’ah Behind the Prohibition of Riba an-Nasi’ah

Prof. Muhammed-Shahid Ebrahim

Professor, Durham University, United Kingdom

Dr. Mohamed Eskandar Shah Mohd Rasid

Associate Professor and Associate Dean of Academic Affairs, College of Islamic Studies, Hamad bin Khalifa University, Qatar

This study invokes the Qur’an, the Sunnah, and the views of key Islamic scholars to derive the Objectives of the Shari’ah behind the prohibition of Riba an-Nasi’ah. Our results are in coherence with finance theory but different from the incoherent ‘illah-based ijtihad of the madhāhib. They are also in contrast with that endorsed in El-Gamal (2006), Chapra (2008), and Kahf (2015) but can instil consensus within the Muslim Ummah to rejuvenate the Islamic financial contracting.

Maqasid al-Shari’ah and the United Nations Sustainable Development Goals: A Critical Examination

Prof. Necmettin Kizilkaya

Professor, Faculty of Theology, Istanbul University, Türkiye

Ethics and Economics: Meaningful Axiological Discourse of Islamic Economics

Dr. Hafas Furqani

Lecturer, Faculty of Islamic Economics and Business, Ar-Raniry State Islamic University, Banda Aceh, Indonesia

Dr. Muhammad Arifin

Faculty of Islamic Economics and Business, Ar-Raniry State Islamic University, Banda Aceh, Indonesia

Mr. Ahmad Hazim Fakhri

Faculty of Islamic Economics and Business, Ar-Raniry State Islamic University, Banda Aceh, Indonesia

Prof. Mohamed Aslam Mohamed Haneef

Professor, Faculty of Economics and Management Sciences, International Islamic University Malaysia

Axiology is the philosophical study of goodness or value in the broadest sense of these terms. It is the branch of philosophy that studies the nature of value and its application. Ethics and economics are essentially inseparable. However, in the evolution of disciplines, ethics became inseparable from Economics. Since the beginning of its inception, Islamic economics has been acutely aware of integrating Islamic ethics into its concepts and applications. It also recognizes the ethical challenges in Western economics. Nonetheless, the relationship between ethics and Islamic economics remains a relatively unexplored dimension that warrants in-depth study. This article aims to discuss the relationship between ethics and economics, beginning with an exploration of axiology and examining how the concept of ethics has evolved in both Western and Islamic traditions.

Embracing Ethical Consumption: Integrating Islamic Values and Minimalism for Sustainable Lifestyles

Dr. Mohamed Aslam Akbar

Assistant Professor, Faculty of Economics and Management Sciences, International Islamic University Malaysia

The paper explores the intersection of ethical consumption, Islamic values, and minimalism as pathways toward sustainable lifestyles. The study presents a comprehensive analysis, encompassing the conventional economic framework of consumption, the Islamic perspective on consumption, and the emergence of minimalism as a concept in consumer behavior. It highlights the significance of integrating Islamic principles of moderation (qawām) and contentment (qanā’ah) into the contemporary discourse on consumption. Drawing from Qur’anic verses and interpretations by Islamic scholars, the paper demonstrates how these principles can foster mindful consumption and promote sustainable living practices. The study advocates for a holistic approach that harmonizes the spiritual teachings of Islam with the minimalist ideology, encouraging individuals to find fulfillment through simpler and more sustainable ways of living. The paper concludes by emphasizing the urgent need for extended research, both qualitative and quantitative, to validate the impact of incorporating concepts like qanā’ah in shaping sustainable consumer behaviors and lifestyles. Ultimately, this study contributes to advancing the understanding of how ethical consumption, influenced by Islamic values and minimalism, can lead to a more harmonious relationship between individuals, society, and the environment.

Consumer Perception and Engagement Towards Building Circular Economy in Qatar

Prof. Nasim Shah Shirazi

Professor and Coordinator PhD Islamic Finance and Economy Program, College of Islamic Studies, Hamad Bin Khalifa University, Qatar

Dr. Syed Nazim Ali

Director, Center for Islamic Economics and Finance, College of Islamic Studies, Hamad Bin Khalifa University, Qatar

Dr. Bushra Faizi

Research Consultant, Research Cluster Project, College of Islamic Studies, Hamad Bin Khalifa University, Qatar

The circular economy (CE) concept demands a fundamental shift in consumer behavior, challenging traditional consumption patterns. This study deepens the understanding of the consumer perspective by examining consumer perceptions and pro-environmental behaviors. It analyzes various aspects of circularity through participatory research involving individual consumers. By using survey data from Qatar and employing logistic regression analysis, this paper emphasizes the significantly positive impact of education and awareness on consumer involvement in the circular economy.

A significant number of consumers actively engage in CE activities, such as seeking eco-friendly products, engaging in self-repair, practicing energy conservation, reusing items, repurposing goods, and sharing resources. However, the adoption of environmentally friendly practices like using public transport to reduce carbon emissions and buying second-hand items remains relatively low.

The study highlights that consumers view durability, environmental factors, and price as equally vital when making purchasing decisions. Respondents in the survey identified the unavailability of repair services as the primary reason for replacing items. This was followed by high repair costs and a preference for purchasing new products due to affordability concerns. Additionally, respondents favored buying eco-friendly products, provided these products ensure quality and competitive pricing.

The research findings indicate that religious motivation significantly drives consumer engagement in the circular economy and environmental care, closely followed by ethical and financial motivations. Survey participants expressed a willingness to pay more for environmentally friendly products (labeled as "eco-friendly") and reusable products (non-disposable). They also showed openness to financial incentives.

Through education and active consumer engagement, Qatar can make significant progress toward a sustainable and resource-efficient future. Moreover, addressing consumer concerns is recommended to accelerate their participation in the circular economy.

ISLAMIC FINANCE & SUSTAINABLE DEVELOPMENT: INNOVATIONS, CHALLENGES, AND STRATEGIES

Sustainable Alternatives to Tawarruq Based Debt Financing for SMEs in Malaysia

Prof. Obiyathulla Ismath Bacha

Professor of Finance, INCEIF University, Malaysia

Ms. Phei Wen Ooi

Executive (Business Intelligence and Communication), InvestPenang, Malaysia

Islamic banks in Malaysia offer financing products for Small and Medium Enterprises (SMEs), however, the majority of these are based on debt-based contracts, especially Tawarruq. Such debt-based financing adds leverage to SMEs, increases their cash flow volatility, and macro-economic vulnerability. Given the huge debt overhang globally and within emerging markets, the debt creation is simply not sustainable over the long term. This paper proposes three alternative models that have risk-sharing features based on Salam Wakalah, Modified Mudarabah, and Musharakah Mutanaqisah. The proposed models are able to address the unique financing needs of SMEs during different stages of their growth. Salam Wakalah for short-term working capital financing is vital during the introductory phase; Modified Mudarabah for specific projects to enhance productivity during their growth stage; and Musharakah Mutanaqisah for the purchase of equipment and machinery during business expansion. Our models also incorporate the Investment Account Platform (IAP) for the trading of the securitized papers, thereby enhancing financial inclusion and enabling Islamic banks to move away from Tawarruq by providing risk-sharing contracts.

Climatic Footprints of GCC's Economic Sectors and the Role of Islamic Finance in Building a Sustainable Future

Dr. Imene Tabet

Research Fellow, INCEIF University, Malaysia, Malaysia

Amid the global drive toward environmental sustainability, the integration of green practices into financial frameworks has emerged as a pivotal driver of financed risk management. This study delves into the intersecting realms of Islamic finance and sustainability within the Gulf Cooperation Council (GCC) region. Fundamental synergies exist between Islamic and sustainable finance and the values they promote. Although Islamic finance has embraced sustainability as a subset up to this point, there's growing awareness that it should encompass sustainability and the objectives of Shariah as a superset in its broader framework. By examining the climatic footprints across the GCC's economic sectors and exploring the role of Islamic finance in building a sustainable future, this paper provides a comprehensive analysis of the dynamic relationship between finance, climate risks, and environmental transitions. The study reveals distinct emission patterns within the GCC region, with both direct and indirect emissions concentrated in sectors such as mining, quarrying, manufacturing, and construction. Notably, Islamic banks exhibit unique emission intensities within certain sectors, namely construction, manufacturing, and services, emphasizing the need for tailored strategies to address climate risks. The paper further investigates the regulatory framework and green finance initiatives in the GCC, showcasing how Islamic finance institutions are moving toward sustainable development. By leveraging a multi-dimensional approach, the paper offers actionable recommendations to advance sustainable finance practices within the GCC region and underscores the instrumental role of Islamic finance in shaping a resilient and equitable future.

Exploring The Sustainable Business Model Components of Islamic Banking in Malaysia

Dr. Nurhafiza Abdul Kader Malim

Senior Lecturer, Universiti Sains Malaysia, Malaysia

Ms. Norbihan Mohammad

Universiti Sains Malaysia, Malaysia

Dr. Normalini Md Kassim

Senior Lecturer, Universiti Sains Malaysia, Malaysia

This paper investigates the purchase intentions of customers concerning sustainable business model components of Islamic banking in Malaysia. The questionnaire method was used to collect data from Islamic banking customers in Malaysia using partial least squares structural equation modeling. The findings indicate that maximizing material and energy efficiency, organizational culture, awareness, Maqasid Shari’ah, and functions positively affect customers' purchase intentions. This expanded set of sustainable business model components benefits the Islamic banking industry by allowing more innovation and systematic study into sustainable banking practices. The findings of this study may serve to build a comprehensive model that improves the long-term sustainability of Islamic banks using a sustainable business model and might assist society or customers by pointing the way toward a long-term Islamic banking model for business operations.

ESG Adjustment in Country Risk Premium in Sovereign Sukuk

Dr. Salman Ahmed Shaikh

Associate Professor, SZABIST University, Pakistan

ESG principles resonate well with Maqasid al-Shari’ah. A focus on ESG can help in achieving progress on Maqasid-e-Shariah as well as SDGs. Several ESG rating providers rate firms and financial instruments. Given this, Islamic financial institutions and Halal stocks are not lagging in their attempts to comply with ESG reporting standards. On the other hand, much of the Sukuk market is driven by Sovereign Sukuk. Sovereign Sukuk also needs to be priced appropriately in line with the ESG rating of the issuer. This study uses data from 53 OIC countries based on 12 indicators to derive an ESG Index. It uses the ESG Index values to determine ESG-adjusted country risk premiums. Overall, the ESG index shows that Southeast Asian and some Central Asian countries have higher ESG performance. However, there are pleasant surprises with some African countries also displaying promising performance. Countries mired in conflicts and the poverty trap perform below par on social, governance, and environmental indicators. Among the Arab countries, Bahrain, Oman, and Qatar rank above Saudi Arabia, the UAE, and Kuwait. Only Brunei receives an A+ rating. As many as 13 countries receive an A rating. The majority of countries, i.e., 28, receive B+ ratings. As many as 9 countries receive a B rating. Yemen and Syria are the only two countries that receive a C+ rating.

The Impact of Aid for Trade and Institutional Quality on Green GDP in OIC Countries

Dr. Zakaria Lacheheb

Assistant Professor, Faculty of Economics and Management Sciences, International Islamic University Malaysia

Ms. Sumia Faisal Abdulkadir

Faculty of Economics and Management Sciences, International Islamic University Malaysia

This paper investigates the impact of Aid for Trade and institutional quality on green GDP in OIC countries using a variety of macroeconomic variables. Using the System GMM (SYS-GMM) estimator, we examine the impact of aid for trade, institutional quality, investment, trade openness, inflation, foreign direct investment, and population on green GDP from 2013 to 2021. The empirical findings indicate a significant positive impact of Aid for Trade on green GDP. In terms of its categories, both Aid for Trade for productive capacity building and aid for trade in economic infrastructure have a significantly positive effect on green GDP in OIC countries. Furthermore, the interaction of Aid for Trade with institutional variables was found to be negative. According to the study's empirical findings, institutional quality is significant and has a positive relationship with green GDP, though it's a nonlinear relationship. While inflation and trade openness have a considerable negative impact on green GDP, investment shows no significant relationship with green GDP.

Aligning Debt Instruments with the Sustainable Development Goals (SDGs): A Critical Analysis

Dr. Dalal Aassouli

Assistant Professor, Islamic Finance and Economy Program, College of Islamic Studies, Hamad Bin Khalifa University, Qatar

The 2030 Sustainable Development Goals (SDGs) agenda and the Paris Agreement on Climate Change were two major turning points in advancing global action to promote the transition to a sustainable economy and tackle climate change. Their implementation has contributed to the growth of environmental awareness and the embedding of sustainability in the financial industry, suggesting a paradigm shift in the way financial intermediation is conducted and how monetary transactions are structured. In turn, new investment products and financial instruments labeled as green, climate-related, or sustainable and responsible have been developed. Among them are sustainability debt instruments such as green bonds, social bonds, and sustainable and responsible investment (SRI) sukuk. The study attempts to analyze how sustainability debt instruments align with the Sustainable Development Goals (SDGs). The aim is to harmonize the classification and assessment of sustainability debt instruments. The sustainability debt instruments selected for this study are those that address sustainability objectives in their allocation of proceeds. To do so, the study considers both the bond and sukuk markets.

NAVIGATING SUSTAINABLE STRATEGIES AND DYNAMICS IN ISLAMIC FINANCE

Sustainable Investing and Corporate Performance: Evidence from Shariah-Compliant Companies in Malaysia

Dr. Norashikin Ismail

Senior Lecturer, Faculty of Business Management, MARA Technological University (UiTM), Johor, Malaysia

Dr. Farha Ghapar

Associate Professor, University Poly-Tech Malaysia, Malaysia

Mr. Mohamad Azwan Md Isa

Senior Lecturer, Faculty of Business Management, MARA Technological University (UiTM), Johor, Malaysia

Mrs. Ruziah A. Latif

Senior Lecturer, Faculty of Business Management, MARA Technological University (UiTM), Johor, Malaysia

Mrs. Yuslizawati Mohd Yusoff

Senior Lecturer, Faculty of Business Management, MARA Technological University (UiTM), Johor, Malaysia

Sustainable investing, with a focus on ESG (Environmental, Social, and Governance) factors, has gained significant attention in the capital markets. Investors increasingly consider these non-financial aspects alongside financial metrics to assess corporate responsibility. Notably, the ESG market has shown resilience amidst the COVID-19 pandemic, witnessing a global inflow of US$36 billion. Malaysia, aligning with UN Sustainable Goals, has introduced indices like the FTSE4Good and F4GBMS, with the latter tailored for Shariah Compliant companies emphasizing ESG practices. Recent studies affirm the positive correlation between ESG performance and financial gains. However, there's a research gap concerning Shariah compliant stocks integrating ESG elements. This study delves into the influence of corporate sustainability practices on the financial performance of Shariah compliant firms in Malaysia, motivated by the F4GBMS index's development. The objective is to understand the investors' emphasis on ESG's role in investment decisions, providing insights to encourage more companies to adopt ESG practices.

On the Dynamic Links between Commodities and Islamic Equities: An Extended Analysis

Dr Edib Smolo

Assistant Professor, College of Business, Effat University, Saudi Arabia

Dr Mustafa Disli

Associate Professor and Coordinator of MSc Islamic Finance and Economy Program, College of Islamic Studies, Hamad Bin Khalifa University, Qatar

Dr. Ruslan (Adam) Nagayev

Visiting Professor, Islamic Finance and Economy Program, College of Islamic Studies, Hamad Bin Khalifa University, Qatar

This study aims to investigate the viability of commodities as a means of diversifying Shari’ah-compliant investment portfolios, in light of the potential impact of shocks in global commodity markets that have transpired over the past decade, such as hydrocarbon market disturbances, the COVID-19 pandemic, and the Russia-Ukraine conflict. We employ Wavelet Coherence and Interconnectedness analyses to investigate the time-varying correlations between commodity markets and the Dow Jones Islamic Market World Index from 20th January 1999 to 9th August 2023. Our results demonstrate that these correlations have fluctuated considerably over this period, with a notable and sustained increase observed during the onset of the 2008 financial crisis. However, recent trends indicate that this association is returning to pre-crisis levels, thereby reestablishing the potential for diversification benefits for Islamic equity holders. Furthermore, the degree of diversification benefits differs across different commodities and time scales, with gold, natural gas, soft commodities, grains, and livestock proving to be better portfolio diversifiers than oil and other metals. Short-term investors (those with less than a 32-day horizon) experienced more significant diversification benefits than medium-to-long term investors across most commodities during bullish, bearish, and market recovery periods. These findings have important implications for investors with varying risk tolerances and time preferences, as well as for policymakers concerned with market stability.

Does Self-Interest Behavior Harm Islamic Financial Contracting? Evidence from a Gift Exchange Game

Mr. Azizon

Researcher, Center for Sharia Economics and Business, Faculty of Economics and Business, University of Indonesia, Indonesia

Prof Nick Chater

Professor of Behavioral Science, Warwick Business School, The University of Warwick, United Kingdom

Most contracts in Islamic finance require cooperative behavior among their agents to foster sustainable relationships and optimal output. Profit Loss Sharing (PLS) contracts, such as mudarabah and musharakah, for instance, place the trust of the capital owner in investment and the effort of labor to run the business as a mutually interdependent mechanism. The optimal output of each agent depends on the actions and responses taken by each side. To test this cooperative behavior, we adopted a finitely repeated principal-agent game with an anonymous partner-matching protocol. We introduce a combination of accumulative target setting and monetary incentives for firms and workers to experimentally study whether target setting leads the principal and agent to be more cooperative in achieving it. We find that an accumulative target prompts firms and workers to interact cooperatively to achieve it together. Success in reaching the target does not detriment the cooperative behavior of actors in general; their cooperative behavior remains high. There's also an indication that successfully achieving a shared goal may generally enhance people’s commitment to one another. Furthermore, we discover that being cooperative is crucial in repeated, long-term, reciprocated, and complex relationships, including those in Islamic finance contracts.

A Proposed Framework for an Appropriate Governance System to Promote the Developmental Role of Islamic Solidarity Finance Institutions: The Case of Local Waqf Institutions

Prof Rahim Hocine

Professor, University of Bordj Bou Arreridj, Algeria

This paper aims to contribute to establishing a governance system for Islamic solidarity finance institutions by focusing on local waqf structures. On one hand, it seeks to develop and improve their management style and, on the other, to enhance their developmental role and promote the well-being of the local population within the framework of sustainable, ethical, and balanced development. This work attempts to contribute to the thought process surrounding the governance system of waqf institutions, building upon and enhancing prior cumulative work. This is achieved through the reformulation and adaptation of these works by introducing a locality dimension on one side and suggesting indicators to measure the effectiveness and integration of local waqf structures on the other.

The deductive approach will be adopted to achieve the research objectives. The research begins with the general principles of corporate governance, their importance, and their extensions, before focusing on Islamic solidarity financial institutions, taking into account the unique aspects of local waqf structures. To enrich and bolster the discussion, in addition to adhering to the standards and controls proposed in this field, we will reference various experiments, particularly local and private ones, and cite key reference texts for grounding and inference.

Factors Affecting the Success of Islamic Microfinance in Conflict-Affected Zones: A Case Study of the Hayat Fund in Northern Syria

Mr. Mohamed Moustafa Al Abdullah

PhD Candidate, Istanbul Sabahattin Zaim University, Turkey

This study aims to identify the factors affecting the success of Islamic microfinance in conflict-affected areas. A case study was conducted on the Hayat Fund, which has been providing Islamic microfinance since 2014 in northern Syria. In-depth interviews were used as a research tool to obtain the required information, and five interviews were conducted for this purpose. Secondary sources were also consulted. The findings indicated that several factors determine the success of microfinance in conflict-affected zones. Some of these factors are related to the financing institution, including risk management strategy, business model, human capital, financing sustainability, and social responsibility. The Hayat Fund has demonstrated its success in leveraging these factors to establish its sustainability in these zones. However, an unsupportive regulatory and governance environment, relative stability in various aspects, and the low level of cooperation and coordination with organizations providing this type of financing have reduced the fund's ability to achieve a higher level of success.

ISLAMIC FINANCE IN THE AGE OF FINTECH: INNOVATIONS, CHALLENGES, AND GOVERNANCE

Hardforking and Creation of Money: An Analysis from an Islamic Perspective

Dr Mohammed Khaiata

Lecturer, University of Western Australia, Australia

Prof Abdulazeem Abozaid

Professor, Islamic Finance and Economy Program, College of Islamic Studies, Hamad Bin Khalifa University

The paper analyzes from an Islamic perspective the impact of hardforking on the rapidly evolving field of financial technology (fintech). Hardforking is a process that may lead to the creation of a new and separate version of an open-source fintech application or a cryptocurrency. Hardforking has become a common phenomenon in the cryptocurrency space and has significant implications for the fintech industry, particularly for investors and users seeking Shariah-compliant financial solutions. The study examines the hardforking process and evaluates its compliance with Islamic teachings in terms of its impacts and effects on the creation of currencies. A comprehensive review of relevant literature and scholarly opinions on hardforking in the context of cryptocurrency is conducted in the paper. Various case studies of prominent hard fork events in cryptocurrencies are analyzed, with a focus on the implications for Islamic investors and users. This analysis encompasses factors such as the distribution of new coins, the rationale behind the hardfork, and the compatibility of the resulting cryptocurrencies with Islamic finance principles. Although the paper outlines several concerns regarding hardforking, the Shariah analysis addresses the most serious one: the indirect creation of cryptocurrencies through hardforking.

Integration of Emerging Technologies with Sharia’h-Compliant Financial Services and their Impact on Achieving Sustainable Social Development

Dr. Enes Jamous

Researcher, Beirut University, Lebanon

In the context of the transformations taking place in the financial arena, financial technology has gained great importance, reflecting the extent to which it is intertwined in the basic fabric of banking work, as these technologies have become an essential basis in financial operations due to the effectiveness and efficiency they add to trading. In this context, Islamic banking reflects an image of technological transformations through its adoption of digital financial services. The latter being driven by a combination of global drivers and technological developments, which have changed multiple aspects of the financial landscape. The Global Islamic Bankers Survey Report 2020 highlighted the strategic trends towards integrating financial technology solutions, specifically by Islamic banks that are moving towards dealing with these technologies primarily. On the other hand, financial technology is showing a profound impact on social finance, as financial institutions have become A special interest in applying the concept of social finance in its activities, with a focus on achieving clear social returns. Financial technology today is an important gateway for financial institutions to achieve greater security in the face of challenges, through continuous improvement of the customer experience. In this study, the focus was on highlighting financial technologies and the Islamic financial industry’s benefit from them, while recognizing that there is a wide scope for research and study on this topic.

The Effect of Fintech’s Perceived Usefulness on Customer Satisfaction and Retention in Islamic Banks – The Perspective of a Developing Country

Dr. Abdullahi Aweis Abu

Audit Manager, Higher Education and Research Audits, Qatar Foundation

Dr. Fathi Aidarus

Faculty Member, University of Doha for Science and Technology, Qatar

Fintech involves the use of new technology in delivering financial services. During the last decade, Fintech has received significant coverage following rapid technological growth and increased demand from customers for efficient and easily accessible services. Studies show that the use of Fintech enhances customer satisfaction, results in better customer retention and fosters business growth. The aim of this study is to investigate the effect of Fintech’s perceived usefulness on customer satisfaction and retention. A comprehensive questionnaire will be administered to collect and analyze data from a sample of customers of Islamic banks in a developing country. As a case study, Somalia was selected due to its rapid growth in the use of Fintech and the limited research conducted on the subject. Statistical analysis will be performed on the data collected to test the hypothesized associations. The study will be useful in contributing to the literature and shedding light on the use of Fintech in the Somali context. Moreover, the study will provide valuable insight to regulators, policy makers, academic community and the Islamic bank stakeholders.

The Effect of FinTech Index on the Islamic Bank’s performance Evidence from the GCC Islamic Banking Sector

Dr. Yousra Trichilli

Faculty of Economics and Management of Sfax, University of Sfax, Tunisia

Hana Kharrat Malim

Faculty of Economics and Management of Sfax, University of Sfax, Tunisia

Dr. Mouna Boujelbène Abbes

Faculty of Economics and Management of Sfax, University of Sfax, Tunisia

This study introduces a new approach to constructing a FinTech Index, specifically tailored to measure the progress of FinTech in the Islamic banking sector within the Gulf Cooperation Council (GCC) countries. The research also delves into the impact of this innovative proxy on the performance of Islamic banks across the GCC region. The investigation encompasses data from GCC Islamic banks spanning the timeframe of 2010 to 2020. Notably, we employ a simultaneous equation model to explore the interdependent relationship between FinTech integration and Islamic bank performance. The study asserts that the proposed FinTech Index effectively captures the essence of the GCC financial markets' evolving FinTech landscape. Moreover, the findings provide micro-level evidence supporting the positive application of FinTech innovation in Islamic banks. This application corresponds to improved performance, heightened profitability, increased stability, and enhanced efficiency. These insights hold value for practitioners and researchers, providing actionable guidance for implementing collaborative FinTech strategies to elevate Islamic bank performance across the GCC region.

Intellectual Capital and Financial Stability in Islamic Banks: The Moderating Role of Corporate Governance

Dr Ejaz Aslam

Assistant Professor, Faculty of Economics and Management Science, Minhaj University, Pakistan

This research investigates the influence of intellectual capital, encompassing human capital, structural capital, and relational capital, on the financial stability of Islamic banks. Using panel data from 126 Islamic banks across 26 Organization of Islamic Corporations (OIC) countries between 2010 and 2021, the study employs hierarchical 2SYS-GMM for estimation. Findings reveal that human and structural capital significantly enhance financial stability in Islamic banks within OIC countries. Furthermore, robust corporate governance amplifies the positive effects of intellectual capital on financial stability. These insights offer valuable guidance for regulators, policymakers, and bankers aiming to bolster financial stability in Islamic banks, highlighting the critical role of intellectual capital and effective governance.