The purpose of this research is to explore the opportunities and challenges faced by the Islamic finance industry in adopting digitalization in the Industry 5.0 era. Digitalization offers many opportunities for the Islamic finance sector, such as increasing financial inclusion, expanding access to financial services, and reducing operational costs. Through the use of technologies such as blockchain, artificial intelligence, and fintech applications, transactions become faster, safer, and more efficient, which ultimately encourages the innovation of more inclusive Islamic financial products. However, significant challenges remain, including unclear regulatory issues in many Muslim-majority countries, as well as data security and user privacy protection issues that are increasingly important in the digital world. This study uses a mixed approach, combining qualitative and quantitative analysis to assess the impact of digitalization on operational efficiency and Islamic financial inclusion. The results show that while digitalization can accelerate the growth of the Islamic financial sector, effective oversight and the implementation of a clear Islamic framework are still needed to ensure adherence to Islamic principles. The implications of these findings show the importance of clear regulations and consistent sharia standards to maintain the integrity of the Islamic finance industry in this digital age.
Muslih et al. (Sat,) studied this question.