Islamic Banking, Accounting and Finance International Conference - The 10th iBAF 2022
254
THE 10th ISLAMIC BANKING, ACCOUNTING AND FINANCE INTERNATIONAL CONFERENCE 2022
(iBAF 2022)
Why Digital Islamic Financial Literacy is Important?
(Extended Abstract)
Muhammad Zikry Hishamudin, Nur Shuhada Kamarudin and Noradilah Abdul Hadi
Faculty Economic of Muamalat, Universiti Sains Islam Malaysia (USIM), Bandar Baru Nilai, 71800 Nilai, Negeri Sembilan Malaysia
Tel: +6010 542 9182 E-mail: [email protected] (corresponding author)
1. INTRODUCTION
Many Malaysians still have trouble managing their finances in today's modern world, leaving them extremely exposed to the effects of a financial shock (Dr Mahathir bin Mohamad 9th Prime Minister of Malaysia as retrieved on 22 July 2019 in National Strategy). The risk and accountability for one's own financial decisions tend to increase as finances grow more complex and diversified. The Malaysian government is creating a National Strategy for Financial Literacy 2019–2023 in respond toward this issue. In relation, financial education that has a substantial influence on financial literacy was recommended as the primary procedure to assist and lead to the development of financial well-being in relation to improving Malaysian financial literacy.(Hathaway &
Khatiwada, 2011; Ismail et al., 2017; Widyastuti et al., 2020; Yong et al., 2018). Next, although there has been a substantial amount of earlier research on the subject of financial literacy, there is still little research on financial literacy that focuses on Islamic finance (Ab Rahman et al., 2018; Antara et al., 2016; Hafizah et al., 2016). As a country to be known as Islamic Financial Hub (Mohd Noor et al., 2014; Rudnyckyj, 2014; Yusof & Shabri, 2008), It's disappointing that Malaysia is still trailing behind in creating structures and programmes for Islamic financial literacy education, leaving relatively few people with a solid grasp of Islamic finance. (Lahsasna, 2016). National Strategy also emphasis the important of adaption digitalization in education. Numerous studies have shown that digital interventions speed up the learning process and have a good impact on students' behaviour (Escuenta et al., 2017; Tulinayo et al., 2018). Additionally, it is believed that the usage of digital technology can influence education when majority in Malaysia today have access to the digital platform which based on the Hootsuit and We Are Social report in January 2022, Malaysia has 89.6 percent of digital platform (Kemp, 2022).
2. LITERATURE REVIEW 2.1 Islamic Finance in Malaysia
Islamic finance is viewed as a different form of financing that, in principle, should be more stable than conventional financial systems (Lahsasna, 2016). Zakat, faraid, waqf, Islamic asset management, Islamic debt management, Islamic bank, Islamic insurance known as Takaful, Sukuk, Islamic capital market, Islamic stock market, Islamic real estate investment trust (IREITS), and more are all part of the Islamic financial system. Other than that, The Islamic financial system offers identical goods and services to the conventional financial system, but its operations are guided by a set of moral and ethical standards that specify what is ethically 'correct,' i.e., what should be done and what transaction that promote the public good or against the public good (Noor &
Ibrahim, 2022).
2.2 Islamic Financial Literacy in Malaysia
Financial literacy is a set of indicators that are used to forecast the need for financial education and to account for difference in financial outcomes, such as saving, investing, and borrowing behaviours. (Frączek, 2015; OCDE, 2012). Islamic financial literacy is considered a new area that can be considered as on development stage with very limited literature (Ab Rahman et al., 2018; Abdullah & Anderson, 2015; Hafizah et al., 2016). In addition, compared to the conventional system, there are many more topics that need to be covered for Islamic financial literacy. In the context of Islamic financial literacy, people should be aware of, among other things, the concepts
Islamic Banking, Accounting and Finance International Conference - The 10th iBAF 2022
255
of money, prohibited Syariah elements, business, banking, zakat, inheritance, the Islamic means of earning money, acceptable financial transactions and services, and prohibited business and financial practises (Lahsasna, 2016).
2.3 Digital Platform of Islamic Financial Literacy
There is no specific definition of digital platform for education as the term "digital platform" refers to technologies that enable data homogenization, editability, programmability, distributedness, and selfreferentiality (De Reuver et al., 2018; Kallinikos & Aaltonen, 2013; Yoo et al., 2010). The use of digital platforms is an advantage if utilized as much as possible in helping to develop education (W.E. Putra, I.L. Kusuma, 2020). In relation, Malaysia place 9th from top country in the world most actively using digital platforms (Kemp, 2022).
Malaysian Communications and Multimedia Commission (MCMC) in their survey as retrieved in 2020 found that 66.9 percent of digital users are came from the age of young adults which age between 35 to 15 years old (Malaysian Communications and Multimedia Commission, 2020).
3. METHODOLOGY
This research using quantitative method by distribute questionnaire using online platform. Quantitative research designs are often pre-determined. In quantitative research, the ideal function of the researcher is as a separate observer and conducting experimentation is a requirement in this research. A set of questionnaires were developed for this study and aims to conduct a pilot test of 30 respondents. For data collection, 350 respondents of young adult age between 18-35 years old were suggested using snowball sampling method.
4. CONCLUSION
Financial literacy is crucial for preventing the economic problems of individuals, families, communities and even countries. The Islamic financial literacy for education digital education platform is currently in its early phases and is not yet commercially accessible in Malaysia. Other than that, the use of digital education suggested help students learn more quickly and have a bigger impact on society, particularly among young adults. Currently there are many different options of digital platform using by young adult for many purposes. Therefore, this study focusing on young adults' preferences for digital platforms for Islamic financial literacy.
References
Ab Rahman, S., Tajudin, A., & Ahmad Tajuddin, A. F. (2018). Determinant Factors of Islamic Financial Literacy In Malaysia. American Journal of Humanities and Social Sciences Research, 10, 125– 132. www.ajhssr.com
Abdullah, M. A., & Anderson, A. (2015). Islamic Financial Literacy among Bankers in Kuala Lumpur.
Journal of Emerging Economies and Islamic Research, 3(2), 79.
https://doi.org/10.24191/jeeir.v3i2.9061
De Reuver, M., Sørensen, C., & Basole, R. C. (2018). The digital platform: A research agenda. Journal of Information Technology, 33(2), 124–135. https://doi.org/10.1057/s41265-016-0033-3
Hafizah, S., Rahim, A., Ab, R., Bakar, A., & Rahim, S. H. A. (2016). Factor Analysis of Islamic
Financial Literacy and Its Determinants: A Pilot Study. 413–418.
https://doi.org/10.15405/epsbs.2016.08.58
Kallinikos, J., & Aaltonen, A. (2013). The Ambivalent Ontology of Digital Artifacts. May 2015.
https://doi.org/10.25300/MISQ/2013/37.2.02 Kemp, S. (2022). Digital 2022. In Hootsuit & We Are Social.
Lahsasna, A. (2016). Framework of Islamic Financial Education and Literacy.pdf. In Journal of Wealth Management & Financial Planning (Vol. 3, pp. 1–12).
Malaysian Communications and Multimedia Commission. (2020). Internet Users Survey 2020.
Noor, H. M., & Ibrahim, N. I. (2022). PETAI BELALANG : Botani, Silvikultur \& Penggunaan (Penerbit UMK). UMK PRESS.
https://books.google.com.my/books?id=6iRtEAAAQBAJ
W.E. Putra, I.L. Kusuma, M. W. D. (2020). EFFECTIVENESS OF ONLINE LECTURES USING DIGITAL PLATFORM DURING THE PANDEMI COVID-19. 1(3), 107–115.
Yoo, Y., Henfridsson, O., & Lyytinen, K. (2010). The New Organizing Logic of Digital Innovation : An Agenda for Information The New Organizing Logic of Digital Innovation : An Agenda for Information Systems Research. February 2014.
https://doi.org/10.1287/isre.1100.0322
