JURISTIC PREFERENCE (ISTIHSAN) AND EQUITY: A COMPARATIVE JURISTIC ANALYSIS

Abstract

The growth of financial technology (FinTech) companies over the past decade highlights the significant evolution in digital innovation. Recently, FinTech ideas have begun to gain acceptance among traditional financial sector players, including financial institutions. Despite recent acquisitions of FinTech companies by banks, the majority of FinTech enterprises remain self-funded and open to partnerships with outside banks. FinTech companies have the potential to take over many crucial functions currently performed by traditional banks, particularly because many banks—apart from the well-known large ones—continue to offer outdated, expensive, and bureaucratic financial services. It is anticipated that FinTech companies will have a substitution effect, leading banks to abandon certain economic activities. In response to FinTech advancements, banks’ incentives to take risks and improve their efficiency and profitability may have shifted. This underscores how FinTech developments will impact bank risk, efficiency, and profitability, presenting a viable alternative to traditional banks as a source of credit. This study aims to investigate these challenges from a global perspective.