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Original Research
The Impact of Digital Banking on Islamic Financial Institutions: A Comprehensive Analysis
Ahmad Hassan Al-RashidKing Fahd University of Petroleum and MineralsCorresponding
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Fatima Zahra MohammedUniversity of Jordan
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Ibrahim Khalil OsmanQatar University
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Abstract
This study examines the transformative effects of digital banking technologies on Islamic financial institutions across the Gulf Cooperation Council (GCC) region. Using a mixed-methods approach combining quantitative analysis of financial performance metrics with qualitative interviews of industry executives, we investigate how digital transformation initiatives have influenced operational efficiency, customer engagement, and Shariah compliance frameworks. Our findings reveal that institutions adopting comprehensive digital strategies demonstrate 23% higher customer retention rates and 15% improved cost-to-income ratios compared to traditional counterparts. However, we also identify significant challenges related to cybersecurity, regulatory adaptation, and the preservation of Islamic banking principles in automated systems. The study contributes to the emerging literature on fintech in Islamic finance and provides practical recommendations for practitioners navigating the digital transformation journey.
Keywords
Islamic bankingdigital transformationfintechGCCShariah compliance
References
How to Cite this Article
Ahmad Hassan Al-Rashid, et al. (2025). The Impact of Digital Banking on Islamic Financial Institutions: A Comprehensive Analysis. Journal of Islamic Financial Research, 1(1), 1-28. https://doi.org/10.12345/jifr.2025.001
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