THE IMPACT OF FinTech IN SOCIAL FINANCE WITHIN THE FRAMEWORK OF ISLAMIC INVESTMENT SYSTEM “MALAYSIA AS A CASE STUDY” - أثر التكنولوجيا المالية في التمويل الاجتماعي في ضوء نظام الاستثمار الإسلامي: دراسة حالة ماليزيا

The emergence of Financial Technology (FinTech) as a disruptive force in the global financial scene presents both opportunities and challenges for the Islamic finance sector. The relationship between FinTech and Islamic social finance (ISF), a field founded on ethical and charitable ideas like Sadaqah , Waqf, and Zakat, is the specific focus of this study. Through a qualitative, methodical analysis of recent literature, government reports, and case studies, this study investigates how FinTech impacts the efficacy, accessibility, and Shari’ah compliance of ISF instruments. Significant findings indicate that technologies such as blockchain, artificial intelligence (AI), and mobile platforms may significantly enhance ISF fund collection, management, and distribution, promoting greater financial inclusion for underserved communities. However, a few challenges remain, such as ensuring full Shari’ah compliance in complex technological applications like blockchain and managing new operational risks associated with digital platforms, winning over clients, and navigating complex regulatory frameworks. This study highlights the significance of developing comprehensive regulatory frameworks and utilizing these developments to support a more transparent, inclusive, and sustainable Islamic financial ecosystem. The findings demonstrate how FinTech has increased the operational effectiveness, accessibility, and transparency of Islamic social financial institutions (ISFIs). According to the study, the successful integration of FinTech requires a robust regulatory framework that balances innovation with the moral precepts of Islamic law to guarantee sustainable and equitable growth for the Islamic social finance ecosystem.