Islamic Financial Technology (FinTech) Development in Saudi Arabia and Egypt: A Comparative Institutional and Sharia-Compliance Analysis

Abstract

Purpose – This study addresses the limited cross-country evidence on how institutional arrangements, regulatory architecture, Sharia governance, and digital readiness shape Islamic FinTech development in Saudi Arabia and Egypt. It compares the two ecosystems and identifies the institutional conditions associated with coordinated innovation, market inclusion, and Sharia-aligned outcomes.

Design/Methodologies/Approach – The study uses a comparative secondary-data institutional design that integrates descriptive indicators with qualitative document analysis. A structured identification, screening, selection, and extraction procedure was applied to 35 sources: 15 academic or theoretical publications and 20 regulatory, institutional, or industry documents. Evidence was entered into a standardised extraction matrix, coded across four analytical dimensions, and triangulated across independent sources where possible.

Findings – Saudi Arabia exhibits a more centralised, regulation-led and infrastructure-driven pathway, while Egypt exhibits a more inclusion-oriented and entrepreneurship-led pathway. The comparison indicates selective convergence in regulatory capability, digital infrastructure, and governance standards, while important differences remain in institutional coordination, market structure, and the organisation of Sharia oversight.

Originality/Value – The study integrates institutional theory, innovation-diffusion theory, and Islamic economic principles, particularly Maqasid al-Sharia, within a single comparative framework. It also distinguishes direct Islamic FinTech evidence from broader FinTech and digital-finance indicators used only as contextual proxies.

Research Limitations/Implication – The analysis is limited to two countries and relies on publicly available secondary sources. Islamic-specific market data are not consistently disaggregated, some indicators use different reference years, and coding was conducted by one researcher. The findings should therefore be interpreted as comparative institutional evidence rather than causal estimates.

Practical Implications – The findings support clearer Sharia-governance responsibilities, stronger documentation and disclosure, coordinated regulatory sandboxes, investment in digital and cybersecurity infrastructure, and regional cooperation on interoperable standards. They also provide a practical basis for regulators and market participants to distinguish ecosystem growth from verified Sharia-compliant market activity.