Volume V: Economy, Politics, and Environmental Governance

An Axiological Critique of the Phenomenon of “Ethics Washing” in Sharia Fintech

  • Erika Rishan Adillah UIN Sunan Gunung Djati Bandung, Indonesia
  • Ahmad Hasan Ridwan UIN Sunan Gunung Djati Bandung, Indonesia
  • Ayi Yunus Rusyana UIN Sunan Gunung Djati Bandung, Indonesia

Keywords

Sharia Fintech, Ethics washing, Maqashid Al-Shariah, AI Ethics, Sharia Supervisory Board (DPS).

Abstract

The proliferation of Sharia labels and ethical claims in Sharia fintech often amounts to nothing more than a market legitimization strategy without any corresponding implementation of genuine values. This practice is known as “ethics washing.” This study offers an axiological critique of this practice, particularly because closed (black-box) algorithmic systems are deemed to contradict the principles of trustworthiness, justice, and transparency. Using a philosophical-normative approach, this study examines OJK regulations, AI ethics literature, and fintech platform compliance practices. The findings indicate that “ethics washing” creates knowledge asymmetry and undermines the oversight function of the Sharia Supervisory Board (DPS). To address this, the study proposes the Maqashid Matrix as an ethical measurement tool that translates religious values into auditable performance indicators, mapping hifz al-mal to data security and hifz al-‘aql to algorithmic transparency. This study underscores the need for a shift from formal compliance toward outcomes that are genuinely auditable in the digital realm, and encourages the DPS to develop an understanding of technology so that it not only reviews documents but also oversees the operation of the system. The main contribution of this paper is to offer an ethical audit framework that prevents the reduction of values to mere symbolic compliance.

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