The effect of sustainable development goals and fintech adoption on financial reports quality in Jordanian Islamic banks

Abstract

This paper investigates the relationship between SDGs, FinTech adoption, and the quality of financial reporting in Jordanian Islamic banks. It examines the moderating effect of the regulatory environment using a quantitative research design. Data were collected through a structured questionnaire survey from 157 respondents, including financial managers, IT specialists, sustainability officers, and financial analysts from three Jordanian Islamic banks, selected using random sampling. The data were then analyzed using a Structural Equation Model (SEM). The results show that both SDG alignment and FinTech adoption positively and significantly influence the quality of financial reporting. Moreover, the effect of SDG orientation on financial reporting quality and sustainability practices is considerably moderated by the regulatory environment. The rapid integration of digital tools into reporting processes has also presented challenges. Technological and sustainability innovations have improved the quality of the information reported. While these innovations help enhance the quality of reporting, a strong regulatory framework is necessary to maintain the consistency and reliability of these improvements. This finding highlights the role of aligning the SDGs in improving financial reporting quality in Islamic banks through the adoption of FinTech. It also underscores the importance of regulatory frameworks to ensure these advancements are sustained. This paper includes documentation aimed at policymakers, regulators, and banking institutions, emphasizing the essential approach of continued focus on and investment in the digitization of infrastructure, regulatory excellence, and sustainable practices. This provides actionable guidance for improving the quality of financial reporting while promoting sustainability in the banking industry.