Development of islamic finance in the digital economy through financial technologies

Аннотация

In the article, you can see the role and importance of developing Islamic finance in the digital economy through financial technologies. The characteristics of new financial instruments in the Islamic financial system, their connection with modern financial technologies, their place in the world financial market, and efficiency indicators were analyzed. The level and share of the use of financial technologies of the Islamic bank in the digital economy are studied and analyzed by the countries of the world. The results of Islamic finance in the digital economy and the results in several directions were achieved, and which areas of the financial system of our country can be used more effectively were analyzed. Keywords: digital economy, Islamic finance, financial technology, digital technology, artificial intelligence, Islamic financial technology, modern technology. Introduction. Today, the digital economy is based on software solutions for issues arising in the market and social relations. First of all, we can count the sectors with a high dependence on the Internet: transport, trade, logistics, etc. For this reason, it can also be called “electronic economy”, “software economy” and “API economy”. The term “digital economy” was first used in 1995 by Don Tapscott. It is used as a separate concept in the publication “Digital Economy: Promise and Peril in the Age of Networked Intelligence”. This publication highlights fundamental innovations, key technologies, and connecting infrastructures as key components of the digital economy. FinTech has garnered an increasing amount of interest in recent years. Banks and financial institutions are taking steps to catch up with the digital and FinTech wave. At the outset, the new trends that are emerging in financial communities, such as digital banking, have been challenging the hegemony of the incumbent banks whose business model has remained constant over several years despite the changing industry landscape. Simultaneously, AI (Artificial Intelligence) is key to the future of digital banking, and more importantly, ethics in AI application is a recurring theme in the literature. Likewise, microfinancing, through the use of FinTech technologies, has opened up the banking sector to STARS International University 239 an entirely neglected part of the business sector. Recently due to the COVID-19 pandemic, digital finance has garnered much support from users in GCC and beyond and FinTech will further drive the digital transformation of the financial services industry1. Results. Technologically, the digital economy can be divided into 4 areas: mobile technologies, business analytics, “cloud” technologies, and social media. Also, the creation and improvement of various platforms for ordering services, joint use of resources, sorting of counterparties, electronic trade, payments, and other purposes will accelerate2. According to the ledgers, the digital economy has a significant impact on more than half of the various industries. According to the World Bank, a 10% increase in the number of high-speed Internet users can increase annual GDP growth by 0.4-1.4%523. In recent years, the growth of Internet speed and usage has been accelerating. Global Internet traffic alone was 100 Gb/s in 2002, reached 46,000 Gb by 2017, and is projected to increase to 150,700 Gb by 2022. The main factors of the transition of socio-economic development to the trajectory of the digital economy are as follows: - implementation of the electronic government concept; - the creation of the concept of a “digital city” based on comprehensive informatization of transport, housing, and other areas; - popularization of new technological products on the market (such as driverless cars); - wide use of 3D printers; - the large-scale production of construction and finishing products for smart and environmentally friendly houses; - increase in demand for innovative pharmaceutical products intended for human rejuvenation; - increase in outsourcing and one-time alternative and free-form employment (freelance services); - the creation of a large number of professional networks to advertise the orders of employers4. Islamic finance is one segment of the finance industry that offers a lot of potential for digital transformation due to the tremendous number of opportunities available for Islamic finance institutions (IFIs) to embark on to achieve multiple strategic objectives. With the help of digitalization, IFIs can achieve financial inclusion, offer customer-oriented financial services, and operational excellence and gain a competitive advantage over their peers. Crowdfunding, peer-to-peer model and payment platforms, smart contracts and blockchain, cryptocurrencies, cybersecurity, and so on are among a few emerging channels of digital transformation that could be utilized in the Islamic finance industry. Even though Islamic banks are at par with their conventional counterpart when it comes to technological develop