Artificial Intelligence in Islamic Banking: Sharia Regulations and Standards

Abstract

Objectives: This study aimed for the explanation of artificial intelligence (AI) in Islamic banking and identifying the opportunities, risks and challenges faced by Islamic banks when making use of it. Identifying the Sharia rulings regarding the use of AI technology originally, as well as any necessary mandated provisions for its use in Islamic banks.

Methods: The descriptive approach was followed so as to describe the varying jurisprudence opinions in general, and the inductive analytical approach was followed via what has been written in jurisprudence and finance sciences.

Results:  AI is the process of making a machine intelligent to simulate human logical thinking capabilities.  There are several opportunities for using AI in Islamic banks, including: providing distinguished financial services, raising competitive value, and reducing operational costs. However, there are risks and challenges that must be faced by technological and technical means. The use of AI in terms of the original requirement is permissibility , and the accessory requirement must be taken into account when the symptoms appear, and to look at the outcome of the action when applying it, and  to take the best interest.  There are legitimate controls and standards for the use of AI in Islamic banks, which must be adhered to in order to achieve legitimacy in its use, and not to prejudice the origin of its legitimate system while achieving the public interest.

Conclusion: There are opportunities to be realized from using AI for Islamic banks, but, on the other hand, there are also challenges and risks that Islamic banks may face. Therefore, Islamic banks must not lag behind by developing their infrastructure so as to accommodate modern technologies, such as AI. This study recommends developing the infrastructure of Islamic banks, establishing scientific research centers in them, and developing the legislative environment for thier adoption.