Regtech and Sharia Governance : A Qualitative Exploration of Ethical Digital Auditing in Indonesia
Abstract
This study explores how regulatory technology (regtech) is perceived and implemented within Indonesia’s Islamic financial ecosystem, focusing on its role in enhancing sharia audit and compliance. Amid the digital transformation of finance, regtech offers the potential to improve efficiency, transparency, and accountability in line with Maqashid al-Shariah principles, yet its adoption raises ethical, institutional, and human capacity challenges. Using a qualitative descriptive–exploratory approach, data were collected through in-depth semi-structured interviews with key informants representing the Financial Services Authority (OJK), the National Sharia Council (DSN-MUI), and the Indonesian Fintech Association (AFTECH). Thematic analysis revealed four key insights: regtech as an enabler of sharia audit efficiency; institutional and human capacity barriers; the importance of ethical and Maqashid-oriented governance; and the need for collaborative policy synergy across stakeholders. Findings indicate that while regtech strengthens the accuracy and timeliness of compliance processes, its successful adoption requires alignment between technological capability, institutional readiness, and ethical oversight. The study contributes a Maqashid-anchored sociotechnical framework for understanding regtech adoption, integrating moral accountability into technological innovation. Practically, it provides actionable insights for regulators and Islamic financial institutions to design inclusive, ethical, and adaptive governance systems. This research is among the first to conceptualize regtech within a faith-based ethical framework, positioning Indonesia as a global reference for value-driven digital regulation in Islamic finance.
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