Islamic Banking in Libya: Towards Activating the Objectives of Sharia through Enabling Technological Transformation via Financial Technology (FinTech).

Abstract

Islamic banking in Libya is experiencing a complex and delicate reality due to the accelerating pace of digital transformations. This situation requires institutions operating in this field to undertake deep methodological reviews of their legal and operational frameworks. This research examines the opportunities and implications of adopting financial technology (FinTech), not only as a tool to enhance performance, efficiency, and innovation, but also as a means to fulfill the higher objectives of Shariah upon which Islamic banks were founded—such as justice, good governance, transparency, and financial inclusion. The study aims to analyze the opportunities and challenges facing the digital transformation of Islamic banks, while seeking to achieve harmony between Shariah compliance standards and FinTech applications. It also provides an overview of international experiences from which valuable insights can be drawn. Furthermore, the research offers a set of constructive recommendations, including the need to review the legislative frameworks governing Islamic banking in order to accommodate digital transformation, and the importance of supporting innovations in Shariah-compliant digital financial products. In doing so, this study proposes a balanced outlook for fostering innovation in digital technologies that remain aligned with Islamic jurisprudential principles, thereby ensuring the renewal and development of Islamic banking in Libya within the context of rapid digital change.