Islamic Banking and Fintech Inclusion : Opportunities, Challenges and Role of Government in Pakistan

Abstract

Islamic banking in Pakistan faces a pivotal challenge to align its practices with modern technological advancements while adhering to Shariah principles. This research explores the integration of fintech within Islamic banking, examining its potential to enhance financial inclusion, operational efficiency, and customer engagement. By analyzing successful Islamic fintech models in countries like Malaysia and Indonesia, the study identifies key challenges such as regulatory barriers, lack of public awareness, and inadequate infrastructure. The findings highlight the critical role of government and financial institutions in fostering innovation through policy reforms, public-private collaborations, and targeted educational campaigns. Ultimately, the research proposes a strategic framework for leveraging fintech in Islamic banking to bridge financial gaps and strengthen Pakistan's position as a leader in ethical finance.