The Role of Artificial Intelligence in Advancing Islamic Banking Operations

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Summarized Fatawaa

I work in an accounting and auditing office, and among the clients of the office are restaurants, hotels, and supermarkets that sell alcohol. Our work is limited to collecting invoices, whether purchases, sales, or expenses, and recording them in daily books. We also review income and sales taxes on behalf of these clients.

You are more knowledgeable about the nature of your work. If you see it as assisting in wrongdoing, then it is forbidden, as Allah The Exalted Says (What means): "And cooperate in righteousness and piety, but do not cooperate in sin and aggression" [Al-Ma’idah/2]. However, if your work is merely documenting the reality, then I hope there is no sin upon you. The the pious predecessors (Salaf) used to take the tithe from the traders of the People of the Book, even if it included alcohol, after knowing the value of their goods. And Allah The Almighty Knows Best.

Is it permissible for a person who broke fasting in Ramadan because of being sick to pay a ransom?

If there is hope for him/her to be cured, then he would be required to make up for the missed fasting days when he/she recovers, and no ransom is due on him/her. If his/her disease is incurable, then he/she would be required to pay a ransom for each missed fasting day, which is (600) grams of wheat, or rice. And Allah Knows Best.

A woman is asking for divorce although she is still breastfeeding. What is the Islamic ruling on this?

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

It unlawful for a woman to seek divorce without a valid Sharia excuse. And Allah The Almighty Knows Best.

What is the due amount of food in expiation for perjury?

It is feeding ten indigent persons: 600 grams (for each) of the average food of your families such as rice, and it is permissible, according to Imam Ahmad Bin Hanbal, to give that amount in money if it was more useful to them.

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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 for a Muslim woman to uncover her hair in the presence of a Christian woman?

All perfect praise be to Allah, the Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallahu ‘alayhi wa sallam, is His slave and Messenger.

According to the reliable opinion of the Shafie School of Thought, this isn`t permissible. However, some scholars stated that it is permissible for a woman to uncover what she usually uncovers while doing housework, but this differs from one place to another where some women uncover their hair while some don`t. However, this is provided that a woman doesn`t uncover her hair in the presence of non-Mahram men (Men permissible for a woman to marry). And Allah The Almighty Knows Best.

Generally speaking, I`m dutiful to my mother and opt for obeying her. However, she chose a certain girl to be my future wife, but I`m not pleased with her choice although that girl comes from a good family and enjoys good character. Should I obey my mother or choose another girl that lives up to my expectations?

Praise be to Allah the Lord of the Worlds.

One must obey their parents in whatever is in compliance with the teachings of Sharia and within one`s capacity. However, you aren`t to blame for not marrying that girl, but it is better that you tell your mother about that and it is preferable that you perform Istikharah prayer. And Allah The Almighty Knows Best.

What is the ruling on the financial leasing transaction in commercial bank?

Any transation that is involved in the unlawful is impermissible. And Allah Knows Best.

I have asked a marriage official to conclude my marriage since I have no proxy and, being an adult, I can act as the proxy of myself, but he refused. What should I do?

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

In order for a marriage to be valid there must be a Wali (Guardian) for the woman: father, brother, paternal uncle or any paternal relative. If there isn`t any, then the judge can act as the woman`s guardian and conclude the marriage contract. And Allah The Almighty Knows Best.