Transforming Financial Landscapes: Exploring the Nexus Between Digitalization in Accounting and Islamic Fintech Adoption

Abstract

Purpose: The main purpose of this research paper is to explore the factors affecting Islamic Fintech adoption based on digital accounting practices. The paper examines the relationship among technology integration, organizational culture, regulatory support, tech advancements, innovation readiness, and Islamic Fintech adoption.

Design/Methodology/Approach: Employing a quantitative methodology, the study administered an 18-item questionnaire. A total of 232 participants aged 18 or older, who were aware of Islamic Fintech, were selected through social media and other relevant channels.

Findings: The outcomes show that tech integration has significant influences on Fintech adoption, with the impact of technology, advancement, and innovative technologies restructuring the financial environment. Second, innovation readiness also plays a crucial role, especially in highly educated and talented individuals working in innovative and dynamic environments. Third, organizational culture also mediates the relationship between IR and Fintech adoption, which means that the practices an organization has in relation to information sharing, knowledge sharing, and experimentation will impact how an employee behaves. Fourth, regulatory support mediates the relationship with advancement in tech, finding the importance of government regulation and support that provides legitimacy and structure with regulation. However, it does not significantly mediate the relationship between tech in structural integration and Fintech adoption.

Originality/Value: The study’s originality lies in its nuanced analysis of how regulatory support may mediate or facilitate tech integration and Islamic Fintech adoption within an authoritarian domain, drawing attention to the subtle dynamics of regulatory change. It offers vital insights about which aspects of regulation might expedite and spur innovation in Islamic Fintech while cautioning about the many challenges that continue to beset this domain. The study reaffirms the reality that proper knowledge of formal and informal regulatory structures and government relations is crucial to organizations, policymakers, and stakeholders to be able to address in dealing with these new regulatory settings.

Implication: In Jordan, rapid digitalization requires the implementation of the ISO 20376 Standard to propel Islamic Fintech solutions to new heights. It focuses on developing an innovation-fit culture in institutions, considering Jordan’s conservative, individualistic culture. Regulatory frameworks must facilitate technology adoption while adhering to Islamic financial principles, and there must be a sustainable financial sector. Policymakers and stakeholders must close theoretical gaps and practical challenges to establish an environment conducive to innovation in Islamic Fintech, driving the sector’s growth, flexibility, and excellence.