LAUSR

The rapid growth of digital technology has driven innovation in Islamic banking, with fintech playing a key role in improving efficiency, expanding financial access, and strengthening competitiveness. This literature-based study analyzes the opportunities and challenges of fintech adoption in Islamic banking. Findings indicate that fintech creates opportunities through improved service effectiveness, broader market reach, enhanced service quality, easier transactions, and strong regulatory support. However, several challenges remain, including cybercrime risks, uneven digital infrastructure, low fintech literacy among the public, and strict Sharia compliance requirements. Overall, fintech has great potential to support the development of Islamic finance if supported by the right digital strategies, stronger regulations, and increased user literacy, providing valuable insights for industry players, regulators, and academics in building an inclusive and sustainable Islamic fintech ecosystem.