THE AUTHORITY OF THE SHARIA SUPERVISORY BOARD IN ENSURING SHARIA COMPLIANCE IN ISLAMIC FINTECH IN INDONESIA AND MALAYSIA

Abstract

The development of Islamic financial technology (Islamic fintech) has significantly transformed modern financial systems while raising challenges in ensuring compliance with Sharia principles. In this context, the Sharia Supervisory Board (SSB) plays a crucial role in overseeing and ensuring that fintech operations adhere to Islamic legal principles. This study aims to analyze the authority of the SSB in enforcing Sharia compliance in Islamic fintech in Indonesia and Malaysia, as well as to identify differences and their implications for supervisory effectiveness. This research employs a normative legal method with statutory, conceptual, and comparative approaches, supported by primary and secondary legal materials from recent literature. The findings reveal that Indonesia adopts a dualistic institutional model in which the SSB’s authority is largely advisory, whereas Malaysia implements an integrated system that provides more binding authority in Sharia supervision. Furthermore, the effectiveness of SSB supervision faces several challenges, including limited technological adaptation, weak enforcement mechanisms, and uneven institutional capacity. Therefore, strengthening authority, enhancing human resource competence, and integrating supervisory systems are necessary to improve sustainable Sharia compliance in Islamic fintech.