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The Role of Artificial Intelligence in Advancing Islamic Banking Operations
Author : Dr. Safwan Odaybat
Date Added : 03-01-2024

The Role of Artificial Intelligence in Advancing Islamic Banking Operations

 

All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

 

One of the emerging topics for which seminars and conferences are held, and attracts researchers to study and explore its potential developments across various fields and disciplines is the subject of Artificial Intelligence. This topic elicits concerns about its potentially destructive impacts on one hand, while on the other hand, it raises hopes and expectations for significant positive effects on improving the quality of life and serving humanity.

 

Before delving into explaining the impact of Artificial Intelligence on Islamic banking, it is essential to clarify the meaning of Artificial Intelligence and Islamic banking:

 

Artificial Intelligence can be defined as a set of technologies and software aimed at enabling computer systems to perform tasks that are typically considered important for human intelligence and facilitate operations associated with specific tasks.

 

Artificial Intelligence relies on data and algorithms to achieve specific objectives. Its applications encompass a diverse range of fields such as machine learning, natural language processing, robotics manufacturing, medical diagnosis, risk management, and more.

 

Islamic banking can be defined as a financial system based on the principles of Islamic law (Sharia). This system requires abstaining from practices such as usury (interest), uncertainty or speculation (Gharar), and injustice. It encourages financing and investment in ways that are in tune with Islamic values and principles.

 

The role of artificial intelligence in advancing the operations and services of Islamic banking is highlighted through the following:

 

1-Enhancing Efficiency and Risk Management:

Artificial intelligence can contribute to the development of Islamic banking by improving its operational efficiency through enhancing analysis processes and risk management. One possible means to achieve this is by utilizing machine learning to enhance credit assessment, identifying potential loans with greater accuracy and efficiency. Additionally, artificial intelligence will contribute to boosting employee efficiency by selecting suitable development, training, and educational methods tailored to their needs.

 

2-Development of Innovative Financial Products:

Artificial intelligence enables Islamic banking to develop innovative financial products that align with the principles of Islamic Sharia. For example, smart investment solutions can be developed based on financial analytics and Sharia-compliant guidelines.

3-Enhancement of Customer Experience:

Artificial intelligence can improve customer experiences in Islamic banking by providing personalized financial services tailored to the specific needs of customers. It can offer accurate investment guidance that aligns with customers' goals without conflicting with Islamic values.

4-Combatting Money Laundering and Terrorism Financing:

Artificial intelligence can contribute to enhancing financial integrity through intelligent operations that develop and improve the quality of monitoring financial transactions. Consequently, it can uncover all illicit and internationally prohibited activities, including money laundering and terrorism financing.

 

5-Facilitating Compliance with Islamic Sharia:

Artificial intelligence contributes to the development of Islamic banking by achieving better compliance with the rules of Sharia. This can be accomplished by providing guidance to financial professionals or by enhancing financial audit and monitoring processes.

 

In conclusion, the topic of the impact of artificial intelligence on Islamic banking in general requires precise scientific studies and research to highlight both the positive aspects and potential challenges. While artificial intelligence may contribute to enhancing the efficiency of financial services and their compliance with Sharia, ethical considerations and Islamic values must be taken into account in the application of this modern technological advancement.

 

Article References:

1-Book: "Artificial Intelligence and Its Impact on the Economy and Islamic Banking" by Dr. Rafiq Ali Suleiman.

2-Book: "Islamic Banking and Artificial Intelligence Technology: Challenges and Opportunities" by Dr. Mohammed Al Nuaimi.

3-Research Paper: "Artificial Intelligence Technology and Its Impact on Islamic Financial Services" by Researcher Ahmed Abdullah Al Salman.

 

 

 

 

 

 

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Summarized Fatawaa

Is it permissible to offer an Udhiyah on behalf of the deceased?

Praise be to Allah, and peace and blessings be upon our master, the Messenger of Allah.
 
Offering a sacrifice (Udhiyah) on behalf of the deceased is permissible. This is the position of the Hanbalis [Kashshaf al-Qina’ by al-Bahuti (Vol.6/P.428)], and it was held by al-Abbadi of the Shafi’is [Bidayat al-Muhtaj by Ibn Qadi Shuhbah (Vol.4/P.358)]; it is also narrated from some Maliki and Hanafi scholars.
 
Abu Dawud included a chapter in his Sunan titled "Chapter: Offering the Sacrifice on Behalf of the Deceased," in which he narrated from Hanash, who said: "I saw Ali (may Allah be pleased with him) sacrificing two rams. I asked him, 'What is this?' He replied, 'The Messenger of Allah (peace be upon him) enjoined me to sacrifice on his behalf, so I am sacrificing on his behalf.'"
 
Abu Dawud also narrated from Jabir (may Allah be pleased with him) that the Prophet (peace be upon him) said: "O Allah, this is from You and for You, on behalf of Muhammad and his Ummah; in the name of Allah, and Allah is the Greatest," then he slaughtered it. It is well known that among the Ummah of Muhammad (peace be upon him) are those who have passed away, yet he (peace be upon him) dedicated it to his entire Ummah.
 
Furthermore, multiple Sharia texts have consistently indicated that the rewards of righteous deeds reach the deceased. This includes the permissibility of fasting on behalf of the deceased if they died owing fasts, as well as the permissibility of performing Hajj on their behalf, both of which are established in authentic Hadiths. Since the rewards for fasting—a physical act of worship—and Hajj—a physical and financial act of worship—reach the deceased, then the sacrifice (Udhiyah) is even more likely to reach them.
 
Moreover, the scholars have reached a consensus (Ijma') that the rewards of charities reach the deceased, and the Udhiyah is a form of charity and falls under its general category. Based on all of this, we hold the view that offering a sacrifice on behalf of the deceased is permissible. And Allah the Almighty knows best.

Is it valid to have Suhoor before sleeping, even if it is before midnight?

Suhoor refers to the pre-dawn meal eaten after midnight to help a Muslim endure fasting. The closer it is to Fajr, the better.
The Prophet ﷺ said: "My Ummah will remain upon goodness as long as they hasten to break the fast and delay Suhoor." [Narrated by Ahmad]
This is because delaying Suhoor makes it more effective in providing strength for worship. However, if there is a risk of Fajr entering while eating, one should refrain from Suhoor out of caution. 
The Prophet ﷺ said: "Leave what makes you doubt for what does not make you doubt." [Narrated by Al-Tirmidhi]

What is required of a traveler or a sick person if they broke their fast and then their excuse ceased?

If a traveler settles or a sick person recovers after having broken their fast, it is recommended for them to refrain from eating and drinking for the rest of the day, but it is not obligatory.

What is the ruling on doubting whether one or two prostrations were performed?

Praise be to Allah, and peace and blessings be upon our Master, the Messenger of Allah.
 
If a worshiper is in doubt regarding the number of units (rak'ahs) or prostrations (sajdahs) performed, he must build upon the minimum (i.e., assume the lower number) and perform the prostration of forgetfulness (Sujud al-Sahw) before the Salam at the end of the prayer. This is based on the report from ‘Ata’ ibn Yasar that the Messenger of Allah ﷺ said: 'When anyone of you is in doubt about his Salat (prayer) and does not know how many he has prayed, three or four (Rak'at) he should cast aside his doubt and base his prayer on what he is sure of. Then, he should perform two prostrations before Taslim (salutation). If he has prayed five Rak'at, they will make his Salat (prayer) an even number for him and if he has prayed exactly four, they (i.e. two prostrations) will be humiliation for the devil..' (Narrated by Abu Dawud).
 
It is stated in Al-Muqaddimah al-Hadramiyyah: 'If one doubts [whether he performed] a bowing (ruku’), a prostration, or a rak'ah, he must perform it and prostrate [for forgetfulness], even if the doubt is removed before the Salam—unless the doubt is removed before he performs what would potentially be an addition. Thus, if he doubts whether he prayed three or four, he is obligated to build upon the minimum.' And Allah the Exalted knows best.

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