Elvira Ildarovna Bulatova
PhD in Economics, Assistant Professor of Banking Department of the
Institute of Management, Economy and Finance, Kazan Federal University,
Kazan, Russia
Ekaterina Alekseevna Potapova
Graduate student of Banking Department of the Institute of Management,
Economy and Finance, Kazan Federal University, Kazan, Russia
Regina Andreevna Fathutdinova
Master of the Institute of Management, Economy and Finance,
Kazan Federal University, Kazan, Russia
Ruslan Chirgishanovich Yandiev
Master of the Institute of Management, Economy and Finance,
Kazan Federal University, Kazan, Russia
Recepción: 05/08/2019 Aceptación: 16/09/2019 Publicación: 23/10/2019
Citación sugerida:
Bulatova, E.I., Potapova, E.A., Fathutdinova, R.A., y Yandiev, R.C. (2019). The
ntech and islamic nance synthesis in the modern world. 3C TIC. Cuadernos de
desarrollo aplicados a las TIC. Edición Especial, Octubre 2019, 258-273. doi: https://doi.
Suggested citation:
Bulatova, E.I., Potapova, E.A., Fathutdinova, R.A., & Yandiev, R.C. (2019). The
ntech and islamic nance synthesis in the modern world. 3C TIC. Cuadernos de
desarrollo aplicados a las TIC. Special Issue, October 2019, 258-273. doi: https://doi.
3C TIC. Cuadernos de desarrollo aplicados a las TIC. ISSN: 2254-6529
The article discusses the economic prerequisites for the eective growth of
Islamic nance in modern conditions, analyzes the existing denitions of Islamic
nance and banking and nancial technologies, which served as the basis for the
formation of a new denition of digital Islamic banking.
The authors carried out a simulation of the inuence of the FinTech industry on
the development of Islamic nance and formed the basic prerequisites for further
sustainable growth in this area. The new theoretical denition is a synthesis of
two systems that can be used later to identify digital tools that can be applied
within the framework of Islamic nance. No less important in this aspect is the
preservation of Sharia norms.
The modeling becomes an evidence base for the further use and expansion of
Fintech tools in Islamic banking and Islamic nance in general. This aspect is
also conrmed by the development of the Islamic Fintech Ecosystem and Islamic
Fintech companies.
Islamic nance, Islamic banking, Financial technologies, Fintech, Economic and
mathematical modeling, Digitalization, Islamic ntech, Digital islamic banking.
Edición Especial Special Issue Octubre 2019
Today, the development of Islamic nance, expands the possibilities of the
nancial interrelationship between participants at the world level, and not only
within the framework of the Islamic world. Nowadays, the rapid development of
digital technologies within the pecuniary section actualizes the use of new tools
in the countries of the Islamic world (Demyanova, 2017).
Today FinTech is gaining momentum in such areas as online lending, money
transfers, credit ratings, crowdfunding, blockchain and cryptocurrency. In
addition, some companies develop robot consultants who can oer solutions for
deposits and lending, based on the wishes of customers, and taking into account
all kinds of risks (Li et al., 2009).
For this purpose, this economic model was designed at dene the strike of the
development of pecuniary technologies upon the volume of Islamic nance
(Bulatova, Zakhmatovm, Aliakberova, & Koczar, 2016).
The article provides a structural-dynamic analysis of GDP for the four countries
and Dow Jones to determine more ecient cheap pickup into the nations of the
Islamic world. qua in short of the lysis, the maners of correlation and regression
analysis were applied in order to build a forecast of Islamic banking assets with
the inuence of nancial technology factors on it (Fintech). The following
methods were also used: statistical, graphical methods of analysis, tabulation,
generalization and systematization, as well as methods of scientic knowledge.
3C TIC. Cuadernos de desarrollo aplicados a las TIC. ISSN: 2254-6529
In the context of global nancial and geopolitical instability, a constant
uncontrolled ow of capital between nancial markets caused by speculative
actions, factors arise to slow down the development of the national and world
economy, such as price instability, high cost of borrowed funds, and inecient
redistribution of monetary resources (Patrutiu-Baltes, 2016).
In 2014–2018, despite the economic crisis in general, it is observed that qua in
short of the reduction into petroleum values, not only the growth of assets of banks
in the Islamic world, but also protability is declining, which leads to a potential
merger or takeover of nancial institutions. However, to continue confronting
crisis situations Islamic nancial institutions need to turn to innovations and
modern technologies used in the nancial world (Jamaldeen, n.d.).
Most oil-producing countries have a stable legal structure that allows for the
eective use of Islamic banking structures alongside traditional institutions. If
the broader banking sector suers from lower oil prices, it is expected that policies
of both legal and regulatory nature will be formulated for the banking sector
and not just for ordinary or Islamic banks. On the other hand, Islamic banks are
inherently risk-averse. Given their ban on gambling, uncertainty and speculation,
they are perhaps better protected to protect themselves from high risks and
unstable investments (Islami Bank Bangladesh Limited, n.d.; Bloomberg, 2019;
Lim, 2019).
While the Islamic nance sector shows a more stable performance during crisis
turmoil in the global nancial market in the GDP growth rate at constant prices
in comparison to leading economies of the world (Figure 1).
Edición Especial Special Issue Octubre 2019
Saudi Arabia
Russian Federation
Figure 1. Comparison of GDP of countries in the world. Source: (World Data Atlas, n.d.)
In addition, the GDP growth rate showed positive dynamics, the index of Dow
Jones from the Islamic world than USA rate (Figure 2).
Comparative characteristics of the Dow Jones indexes of the United States of
America and the Islamic world showed that:
The Dow Jones USA index for 10 years rose by 8.83%
The Dow Jones Islamic Market index rose by 16.47 in 10 years %.
3C TIC. Cuadernos de desarrollo aplicados a las TIC. ISSN: 2254-6529
Figure 2. Comparison of the Dow Jones indices of the USA and the Islamic world. Source: (S&P
Dow Jones Indices, n.d.).
This structural-dynamic analysis shows a more sustainable growth of Islamic
nance in comparison with western countries. Thus, an important aspect of the
budgetary extension of the nations of the Islamic universe may be the ecacy of
digital tools in the industry FinTech.
There are dierent interpretations in the denition of nancial, technology and
Islamic nance, the main of which are presented in Table 1.
Table 1. The nancial technologies and Islamic nance denitions and interpretation.
Denition Interpretation
Supporters of
Digital innovative nancial services solutions
provided and used by companies on a technology
platform, competing / cooperating with nancial
E.A. Demianova
It is strangely surprising how academic literature
has neglected the eld despite the marvelous
impact of scal technology on the scal favors
Shim and Shin, 2016
It is driven by variations in the ecosystem
and contesting structure of favors and the
transformation of craft running, scal technology.
Deloitte, 2016
Edición Especial Special Issue Octubre 2019
Denition Interpretation
Supporters of
Islamic nance
An ethical nancial and investment sector serving
the needs of the real economy, which are based
on the principles of legality, justice, equality and
distribution. The basic economic principle is a ban
on usury
E. A. Baydaulet
Islamic banking - The nancial order, graded on
the origins of Islamic law and ushered by Islamic
economics, is called non-prot banking.
Sandra Lim
It is Shari’a law that species how to nance it,
which is a nancial system.
Faleel Jamaldeen
Islamic banking
Adherence to the Shari’a can create a kind of
Islamic banking system that can be used to develop
nancial resources through its feasible usage
through the Islamic economy.
Islamic banking
Islamic Banking With the ethics of the Islamic value
system, essentially a normative concept is also
described as overseas banking.
Dr. Ziauddin Ahmed
Islamic banking is a nance management system
that is based on the Islamic rules
Junaid Akhtar Abbasi
Digitizing comparability data encryption and
encryption is called digitalization, which allows
computers to supply, procedure, and broadcast
such data.
Jason Bloomberg
With the integration of digital technologies
everything that can be digitized can be termed
Mohamed El-Shimy
Presents interpretations reveal the essence of Islamic nance and nancial
technologies as two unrelated directions. However, with the development and
application of tools for the FinTech industry in the Islamic world is important for
the formation of this denition, such as digital Islamic banking.
Digital Islamic banking is a technology of providing Islamic banking products
and services through online services using tools FinTech industry.
An important aspect of the formation of the new denition is a close relationship
between Islamic nance and Islamic banking since banks are an important
element of the nancial system.
3C TIC. Cuadernos de desarrollo aplicados a las TIC. ISSN: 2254-6529
Considering the inux of FinTech industry invoices upon the enlargement of
Islamic banking as an element of the nancial system, economic and mathematical
modeling was carried out. The indicators to be modeled are presented in Table 2.
Table 2. Input data for modulation.
(Billion USD)
activity in
activity in
(Deal count)
activity in
FinTech with
activity in
FinTech with
(Deal count)
Global private
investment in
blockchain &
invested ($B))
Global private
investment in
blockchain &
(Deal count)
Y Х1 Х2 Х3 Х4 Х5 X6
2013 1565 18,9 1,132 0,8 102 0,2 69
2014 1445 45,4 1,543 2,5 137 0,7 144
2015 1604 67,1 1,925 8,5 225 0,5 134
2016 1675 63,4 1,893 11,6 287 0,6 159
2017 1721 50,8 2,165 10,3 327 4,8 218
2018* 1809 111,8 2,196 23,1 357 4,5 494
Source: (Pollari & Ruddenklau, 2018).
Initially, a correlation matrix is created to specify the grade of penetration of the
selected X on the studied Y (Table 3).
Table 3. Correlation matrix.
Y Х1 Х2 Х3 Х4 Х5 X6
Y 1
Х1 0,704093 1
Х2 0,755271 0,793208 1
Х3 0,886938 0,946588 0,827307 1
Х4 0,902747 0,786041 0,949344 0,900661 1
Х5 0,758852 0,546898 0,740252 0,696453 0,787007 1
X6 0,761314 0,893595 0,695939 0,924876 0,758369 0,774287 1
The correlation matrix shows the level of inuence of the selected factors on
the object of study. According to it, the factors X1-X6 have the values of the
correlation coecients greater than 0.5 and are accepted for the study, however,
among them, there is a multi-linearity above 0.7. So, by correlation, multi-
Edición Especial Special Issue Octubre 2019
linearity observed in X1 with all factors except X5. For expediency of carrying
out further modeling, X5 is accepted to the regression analysis as not correlating
with X1 and X4, as an indicator with the greatest correlation with Y.
The conducted regression analysis showed that almost 82,11% of Islamic Banking
Assets depends on the formation and change of X4 and X5 values (Table 4).
Fisher statistics characterize the signicance of the regression model.
Table 4. Regression analysis of the economic model.
Regression Statistics
Plural R 0,906147
R-squared 0,821103
Normalized R-squared 0,701839
Standard error 69,65298
Observations 6
Variance analysis
df SS MS F Signicance F
Regression 2 66803,02 33401,51 6,884726 0,075666
Remainder 3 14554,61 4851,538
Total 5 81357,63
Coefcients Standard error t-statistic
Y- intersection 1385,277 91,09195 15,20746
X4 0,991345 0,488836 2,027968
X5 7,536152 23,46571 0,321156
To forecast the value of Islamic banking assets, the regression equation (Formula
Y=1385,277+0,9914*Х4+7,5362*Х5 (1)
After conducting a point forecast X4 and X5 and adding connected values in
the regression equation (Formula 1), a forecast of the value of Islamic Banking
Assets was made if it would be inuenced only by X4 and X5. The point forecast
is carried out through the determination of the trend line for each of the factors
3C TIC. Cuadernos de desarrollo aplicados a las TIC. ISSN: 2254-6529
X4 and X5 for 1 forward forecast period with the conclusion of the regression
equation. The forecast period number is supplied instead of the unknown X
Further, according to Formula 1, instead of the unknown X4 and X5, their
predicted values for 2019-2021 are added to calculate the value of Y (Figure 3).
Figure 3. Forecast volume of Islamic Banking Assets the inuence of factors X4 and X5, billion USD.
Thus, the impact on the Islamic banking Assets indicators such as global venture
capital activity in FinTech with corporate participation (Deal count) (X4) and
global private investment in blockchain & cryptocurrency (Capital invested ($B))
(X5) by 2021, may lead to an increase in the indicator to almost $ 2 trillion.
An important aspect of the analysis is that Islamic banks are in a better position
than traditional banks because they are a rapidly developing area of Islamic
Finance. With enough investment in nancial system participants in FinTech,
can lead to more signicant growth of the economy as a whole.
The most promising are such tools as crowdfunding, P2P lending, and digital
technology management. The only factor that distinguishes the usual FinTech
from the Islamic one is the need to observe the principles of Sharia.
Using the experience of upgrading existing nancial instruments into products
such as Murabaha and Musharaka that meet Sharia standards, it becomes
possible to apply a similar approach to FinTech instruments. Combining safe
investment and social responsibility with innovation and ecient use of available
tools, Islamic Finance can use any modern nancial instruments and use them
Edición Especial Special Issue Octubre 2019
For example, Islamic scal technology has solved astonishingly, with the appearing
universal Islamic scal technology order replace stiy on P2P nancing. There
is a basilar replace on peer-to-peer nancing to address the remonstrative
demand for making Shariah-compliant nancing more available for commerce
and consumers, but many slots stay self-relative to demand and market potential.
Figure 4. Islamic FinTech Ecosystem. Source: (Islamic Fintech Report, 2018).
The previously described model of the inuence of FinTech factors on Islamic
banking Assets is proved in practice. To date, there are already dualistic companies
that use FinTech and Islamic Finance at the same time (Table 5) (Firmansyah &
Anwar, 2019).
For example, is a sharia crowdfunding platform in Indonesia
focusing on property investment. The vision of this rm is to provide ease
to everyone to invest in property. With a tiny number of employees, since its
establishment, is progressive as it has served 189 customers.
3C TIC. Cuadernos de desarrollo aplicados a las TIC. ISSN: 2254-6529
Table 5. The prole of participating Islamic FinTech rms.
Name of the Fintech
The services
Year of
Number of
Number of
(PT. Berkah Inovasi
Nusantara 2018)
pltaform to
make property
accessible to
2018 3 189
Inti Berkah Investama)
Peer to peer
2018 5 67
ALAMI Teknologi
Other nancial
2017 9 9
Syar (PT Syar
Teknologi Finansial)
Peer to peer
2017 6
Qasir (PT Solusi
Teknologi Niaga)
Application of
Point of Sales
2015 44 5,000
EthisCrowd (Ethis Pte
Real estate
2015 15 25,000
Source: (Firmansyah & Anwar, 2019).
Despite the slowdown in economic growth due to falling oil prices, the Islamic
nancial industry continues to evolve and strive for the same indicators. This
is facilitated by “revolutionary” nancial technology. The use of FinTech tools
allows us to stimulate the economic growth of all countries of the world and not
just Islamic ones.
On this basis, a new theoretical denition was formed, combining both aspects of
the digital economy and Islamic nance. With the further formation of new tools
that meet Shariah standards, but which are FinTech tools, the new conceptual
apparatus can serve as a basis for a more precise denition of certain aspects of
the Islamic FinTech industry.
The relevance of the application and development of the FinTech industry in
the Islamic world is conrmed by the economic model of the forecast of Islamic
banking assets when it is inuenced by digital technology factors. This model also
proves the development of dualistic companies combining FinTech and Islamic
nance, as well as the rapid development of the Islamic FinTech Ecosystem.
Edición Especial Special Issue Octubre 2019
The work is performed according to the Russian Government Program of
Competitive Growth of Kazan Federal University.
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Edición Especial Special Issue Octubre 2019