Cognitive Appraisal as a Central Mechanism in Islamic Ethical Decision Making: Evidence from AI-Enabled Islamic Fintech in Indonesia

Abstract

Purpose ‒ This study investigates how Islamic skepticism, perceived Islamic value, and experiential quality shape cognitive appraisal, Shariah risk perception, and Islamic ethical intention in AI enabled Islamic fintech services. The research addresses the growing need to understand ethical decision processes in technology mediated religious environments where algorithmic judgments are increasingly used to signal Shariah compliance.

Design/Methodology/Approach ‒ A quantitative cross-sectional survey was conducted with Muslim users of Islamic fintech platforms in major urban areas of Indonesia. Data were collected from 439 respondents using validated Likert scale items. Structural equation modeling with SmartPLS was employed to evaluate measurement reliability and test direct and mediating relationships.

Findings ‒ The results show that experiential quality and cognitive appraisal are the strongest predictors of Islamic ethical intention. Islamic skepticism reduces cognitive appraisal, while perceived Islamic value and experiential quality enhance it. Cognitive appraisal increases Shariah risk perception and strongly predicts ethical intention. Shariah risk perception negatively influences ethical intention and mediates the effect of cognitive appraisal.

Originality/Value ‒ The study integrates cognitive appraisal theory and Islamic ethical decision-making in the context of AI driven fintech. It identifies experiential quality and cognitive appraisal as central mechanisms that explain how users interpret Shariah related cues in automated systems.

Research Limitations/Implications ‒ The cross-sectional design limits causal inference, and the geographic focus may affect generalizability. The findings enrich theoretical models of Islamic ethical intention in digital service settings.

Practical Implications ‒ Fintech providers should enhance experiential quality, increase transparency of Shariah governance, and clarify AI based compliance processes to strengthen user trust and ethical engagement.