DIGITAL TRANSFORMATION IN THE SHARIA ECONOMY: TECHNOLOGICAL INNOVATION TO STRENGTHEN THE HALAL FINANCIAL ECOSYSTEM IN THE 5.0 ERA

Anggas Arden Arya Satya -  UIN Sunan Kalijaga, Indonesia
Ahmad Ramadhan* -  UIN Syahada Padangsidimpuan, Indonesia
Syarinah Junianti Hasibuan -  University Of North Sumatera, Indonesia

Abstract


This study aims to explore digital transformation in the Islamic economy and how technological innovation strengthens the halal financial ecosystem in the era of the Industrial Revolution 5.0. The research object includes digital-based Islamic financial services such as fintech, halal e-wallets, Islamic crowdfunding, and Islamic smart contracts. The method used is a descriptive qualitative approach through in-depth interviews with industry players, regulators, and academics, as well as literature and policy documentation studies. The results show that digitalization improves service efficiency, expands Islamic financial inclusion, and supports the achievement of maqashid sharia. However, challenges remain in the form of low sharia digital literacy, suboptimal regulatory readiness, and the need for strict sharia governance and supervision. This study concludes that digital transformation is a fundamental strategy in building an inclusive, efficient and competitive Islamic financial ecosystem. For the future, it is recommended to strengthen digital literacy, synergy between stakeholders, and investment in halal technology infrastructure so that this transformation runs according to sharia principles as a whole.


Keywords


Sharia Digitalization1; Islamic Fintech2; Industrial Revolution 5.03

Full Text:

PDF

References


Alhodhaibi, I., & Barakat, A. (2015). The Impact of Organizational Knowledge Strategies in Deliberating of Organizational Success among Managers in Saudi Arabian Industrial Companies. Arab Economic and Business Journal, 10(1), 9–21. https://doi.org/10.1016/j.aebj.2014.12.001

AlJahsh, M. A. I. (2024). Science and Islamic ethics: Navigating artificial womb technology through Quranic principles. Heliyon, 10(17), e36793. https://doi.org/10.1016/j.heliyon.2024.e36793

Andrade, C. R. D., & Gonçalo, C. R. (2021). Digital transformation by enabling strategic capabilities in the context of "BRICS." Journal of Management, 28(4), 297–315. https://doi.org/10.1108/REGE-12-2020-0154

Aslam Memon, I., & Jabeen, H. (2018). Monetary condition index and its changing transmission on macro-economic variables. Arab Economic and Business Journal, 13(2), 111–124. https://doi.org/10.1016/j.aebj.2018.10.001

Baba, R., Keling, W., & Yap, C. S. (2025). The effect of subjective norms, attitude and start-up capital on the entrepreneurial intention of the Indigenous people in Malaysia. Journal of Enterprising Communities, 19(4), 853–880. https://doi.org/10.1108/JEC-05-2024-0100

Bejar, P., Ishi, K., Komatsuzaki, T., Shibata, I., Sin, J., & Tambunlertchai, S. (2022). Can Fintech Foster Competition in the Banking System in Latin America and the Caribbean? Latin American Journal of Central Banking, 3(2), 100061. https://doi.org/10.1016/j.latcb.2022.100061

Borrero, J. D., & Yousafzai, S. (2025). Spinning the circle: unravelling the "why?" behind social motivations in circular economy entrepreneurship. Journal of Enterprising Communities, 19(4), 881–912. https://doi.org/10.1108/JEC-01-2024-0003

Caporale, G. M., Sova, A. D., & Sova, R. (2025). International Financial Integration, Economic Growth and Threshold Effects: Some Panel Evidence for Europe. Journal of International Money and Finance, 158(August), 103407. https://doi.org/10.1016/j.jimonfin.2025.103407

Chen, C. H., Huang, E. P. C., Fan, C. Y., Kuo, Y. C., Ho, Y. J., Chen, C. Y., Huang, S. S., Huang, C. H., Huang, C. T., Lien, C. J., Huang, C. H., Chang, W. T., & Sung, C. W. (2025). Comparative performance of machine learning and conventional scoring systems for neuroprognostication in out-of-hospital cardiac arrest survivors. Journal of the Formosan Medical Association, May. https://doi.org/10.1016/j.jfma.2025.09.003

Dagostim, J., Baú, C., Magro, D., Pedro, T., & Bernardo, L. (2017). Performance Economics Notebooks of Brazilian and Chilean companies. Economics, 41, 19–30.

Dhaoui, A., & Khraief, N. (2014). Sensitivity of trading intensity to optimistic and pessimistic beliefs: Evidence from the French stock market. Arab Economic and Business Journal, 9(2), 115–132. https://doi.org/10.1016/j.aebj.2014.05.008

Dhar, B. K., Roshid, M. M., Dissanayake, S., Chawla, U., & Faheem, M. (2026). Leveraging FinTech and GreenTech for long-term sustainability in South Asia: Strategic pathways toward Agenda 2050. Green Technologies and Sustainability, 4(1), 100263. https://doi.org/10.1016/j.grets.2025.100263

Dr. Effendi Sadly, SE., M. (2024). SHARIA ECONOMICS: CONCEPT AND IMPLEMENTATION IN THE GLOBAL CONTEXT OF PT Inovasi Pratama International.

Filiz, S., Simonsson, J., Berggren, C., Andreasson, M., & Eriksson, R. (2026). Digital transformation as a multi-phase process: a longitudinal study of corporate strategy and business unit adaptation. 202(October 2025).

Ghassan, H. B., & Al-Jeefri, E. H. (2016). Islamic Theoretical Intertemporal Model of the Current Account. Arab Economic and Business Journal, 11(1), 86–92. https://doi.org/10.1016/j.aebj.2016.03.002

Ghassan, H. B., & Alhajhoj, H. R. (2013). Test of clustering volatility effect of Tadawul index using rolling autocorrelation. Arab Economic and Business Journal, 8(1–2), 1–5. https://doi.org/10.1016/j.aebj.2013.10.001

Hafidh, A. A. (2021). Responses of Islamic banking variables to monetary policy shocks in Indonesia. Islamic Economic Studies, 28(2), 174–190. https://doi.org/10.1108/ies-11-2020-0049

Haron, M. S. bin, Aldaikey, N. I. H., & Ahmad, A. R. (2017). The Failure Of Financing Procedures For Funding Small Projects In Libya,An Empirical Study On North African Bank. Arab Economic and Business Journal, 12(2), 109–120. https://doi.org/10.1016/j.aebj.2017.04.002

He, Z., Liu, X., & Deng, Z. (2025). Spatial-temporal differences and influencing factors analysis of coupling coordination development among digital economy, green finance, and total factor carbon productivity. Sustainable Futures, 10(October 2024), 101371. https://doi.org/10.1016/j.sftr.2025.101371

Huang, X., & Zhou, Q. (2025). Knowledge management model in the integration of open innovation and circular economy driven by digital intelligence : A comparative multi-case study. 10(October).

Jaffar, M. A., & Musa, R. (2014). Determinants of Attitude towards Islamic Financing among Halal-certified Micro and SMEs: A Preliminary Investigation. Social and Behavioral Sciences, 130, 135–144. https://doi.org/10.1016/j.sbspro.2014.04.017

Khodeir, A. N. (2017). Intra-Trade in Arab Manufacturing Industries as a determinant of the technological progress. Arab Economic and Business Journal, 12(1), 1–12. https://doi.org/10.1016/j.aebj.2017.04.004

Lehtimäki, H., Hirvonen, P., Riivari, E., & Piironen, S. (2026). Innovation pedagogy in management education: Student-centered learning with arts-based methods. International Journal of Management Education, 24(1). https://doi.org/10.1016/j.ijme.2025.101306

Martinelli, G., Vogel, E., Gimenes, R. M. T., Carducci, C. E., de Souza, D. P., & Ruviaro, C. F. (2025). Carbon balance in coffee farming: A life cycle case study of conservationist versus conventional systems. Cleaner Production Letters, 9(July 2024), 4–11. https://doi.org/10.1016/j.clpl.2025.100106

Menne, F., Surya, B., Yusuf, M., Suriani, S., Ruslan, M., & Iskandar, I. (2022). Optimizing the Financial Performance of SMEs Based on Sharia Economy: Perspective of Economic Business Sustainability and Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(1), 18. https://doi.org/10.3390/joitmc8010018

Misran, N., Sahuri, S. N. S., Arsad, N., Hussain, H., Zaki, W. M. D. W., & Aziz, N. A. (2012). The Influence of Socio-Economic Status among Matriculation Students in Selecting University and Undergraduate Program. Social and Behavioral Sciences, 56(Ictlhe), 134–140. https://doi.org/10.1016/j.sbspro.2012.09.640

Nasrllah, A. (2018). Analysis of the Potential of the Halal Industry for Business Actors in Indonesia. AT-Tahdzib: Journal of Islamic Studies and Muamalah, 6(1), 62–64. file:///Users/andreataquez/Downloads/guia-plan-de-mejora-institucional.pdf%0Ahttp://salud.tabasco.gob.mx/content/revista%0Ahttp://www.revistaalad.com/pdfs/Guias_ALAD_11_Nov_2013.pdf%0Ahttp://dx.doi.org/10.15446/revfacmed.v66n3.60060.%0Ahttp://www.cenetec.

Nurhayati, & Julina. (2025). Digital Transformation in the Sharia Economy: Technological Innovation to Strengthen the Halal Financial Ecosystem in the 5.0 Era. Journal of Masharif Al-Syariah: Journal of Sharia Economics and Banking, 10(3), 1704–1714.

OJK. (2017). Sustainable Finance Action Plan Report.

Priyatnasari, N. S., Palupi, E., Kamila, F., Ardhiani, K. R., Khalisah, Prilyadi, G. T., & Iwansyah, A. C. (2024). Meat-analog made from Javanese Grasshopper, kidney beans, and elephant foot yam as a high-protein and low-cholesterol product. Journal of Agriculture and Food Research, 16(October 2023), 101071. https://doi.org/10.1016/j.jafr.2024.101071

Puspitasari, N. (2015). Hybrid Contract and Funds Efficiency Management of Islamic General Insurance Company (Study In Indonesia). Social and Behavioral Sciences, 211(September), 260–267. https://doi.org/10.1016/j.sbspro.2015.11.033

Qashou, A., & Saleh, Y. (2018). E-marketing implementation in small and medium-sized restaurants in Palestine. Arab Economic and Business Journal, 13(2), 93–110. https://doi.org/10.1016/j.aebj.2018.07.001

Radaideh, M. K., & Azam, A. N. Al. (2015). The application of social responsibility in Jordanian banks and its impact on the competitive feature from the point of view of banks' employees. Arab Economic and Business Journal, 10(2), 112–129. https://doi.org/10.1016/j.aebj.2015.06.002

Raquel, P., Mora-armas, M., Oromí, P., & Díaz-pe, F. J. (2025). Environmental and Sustainability Indicators Soil arthropods as indicators : Biodiversity responses across conventional, ecological and natural systems in an oceanic island. 28(October). https://doi.org/10.1016/j.indic.2025.100971

Salman, A., & Nawaz, H. (2018). Islamic financial system and conventional banking: A comparison. Arab Economic and Business Journal, 13(2), 155–167. https://doi.org/10.1016/j.aebj.2018.09.003

Sugianto, S., Yafiz, M., & Khairunnisa, A. (2021). The Interaction of Investment, Third-Party Funds and Islamic Banking Financing on Economic Growth in North Sumatra. Scientific Journal of Islamic Economics, 7(2), 1091–1100. https://doi.org/10.29040/jiei.v7i2.2601

Suryono, R. R., Budi, I., & Purwandari, B. (2021). Detection of fintech P2P lending issues in Indonesia. Heliyon, 7(4), e06782. https://doi.org/10.1016/j.heliyon.2021.e06782

Wang, K., Zhao, S., & Wang, Z. (2025). Global liquefied natural gas market development and future outlook. Natural Gas Industry B, xxxx, 1–11. https://doi.org/10.1016/j.ngib.2025.10.001

Wijayanti, R., & Setiawan, D. (2023). The role of the board of directors and the sharia supervisory board on sustainability reports. Journal of Open Innovation: Technology, Market, and Complexity, 9(3), 100083. https://doi.org/10.1016/j.joitmc.2023.100083

Yasin, H. N., Samour, A. S., Alomari, M. W., & Abdelhadi, S. (2025). Financial inclusion and green technological innovation as drivers of human capital: Evidence from E7 countries. Green Technologies and Sustainability, September, 100277. https://doi.org/10.1016/j.grets.2025.100277

Yudantini, N. M., & Jones, D. (2015). The Catuspatha Pattern in Balinese Palace: Architectural Conservation and Challenges. Environmental Sciences, 28(SustaiN 2014), 538–548. https://doi.org/10.1016/j.proenv.2015.07.064




DOI: https://doi.org/10.24952/bay.v4i2.17673

Refbacks

  • There are currently no refbacks.


Copyright (c) 2025 Al-Bay' : Journal of Sharia Economic and Business