Opportunities and Challenges of Digitalization in Islamic Banking in Improving Customer Service Quality

The development of Financial Technology (Fintech) has brought significant changes to Indonesia's financial sector, offering solutions to improve financial inclusion and operational efficiency. This study aims to identify opportunities and challenges in the implementation of fintech in Indonesia. The research method used is a descriptive qualitative approach with library research. Data was obtained from various relevant secondary sources such as scientific journals, research reports, publications from the OJK and Bank Indonesia, as well as other literature published in the last five years. Data analysis was carried out using content analysis to examine and interpret information from various sources in depth.The results of the study indicate that fintech has great potential, such as increased financial inclusion, operational efficiency, the creation of new markets, and the potential for the development of sharia-based fintech. However, challenges such as the digital divide, consumer protection, collaboration with conventional financial institutions, and inadequate regulation, particularly in sharia fintech, remain major obstacles. This research emphasises the importance of innovation, adaptive regulation, strengthening digital infrastructure, and collaboration between the government, relevant authorities, and industry players to create an inclusive, secure, and sustainable fintech ecosystem. The potential for fintech in Indonesia remains substantial, but it requires appropriate strategies to address existing challenges