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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

In the Sharia-compliant viewing  at a prospective bride (*al-naẓrah al-sharʿiyyah*), is it permissible for the man to see the woman without a veil (*ḥijāb*)?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah.
It is sunnah for the suitor to see the woman he is seeking to marry within the limits the Sharīʿah permits, namely looking at the face and the hands (palms and backs), based on the saying of the Prophet (peace and blessings be upon him): “Look at her, for it is more likely to bring about harmony between you.” Narrated by al-Tirmidhī.
The suitor may also ask one of the women to look at the woman he is seeking to marry. In that case, she is permitted to see of her what she is normally permitted to see, which is not limited to the face and hands, and she then describes these matters to the suitor. It is narrated on the authority of Anas (may Allah be pleased with him) that the Prophet (peace and blessings be upon him) sent Umm Sulaym to look at a girl, and said: “Smell her breath, and look at her heels.” Narrated by Aḥmad in his Musnad.
It is stated in Tuḥfat al-Muḥtāj (Vol.7/p.192): “For one who cannot easily look, or does not wish to look himself, it is sunnah to send someone who is permitted to look at her, to observe her and describe her to him, even regarding what he himself is not permitted to look at. He thereby gains through the sending what he would not gain through looking. Because of the added need for this, it is excepted from the prohibition of a woman describing another woman to a man.”
The permissibility of looking is conditional upon his resolve to marry her once he is able to, his predominant assumption that his proposal will be accepted, and his assumption that the woman is free of marriage and of a waiting period (ʿiddah). Otherwise, looking is forbidden.
Accordingly, it is not permissible for the suitor to look at anything other than the face and hands. He may ask one of his maḥram women, such as his mother or sister, to see the woman unveiled, and the Sharia-compliant viewing (of a prospective bride) must take place in the presence of one of the woman’s maḥrams. And Allah Almighty knows best.

What are the Sharia consequences when the sacrificial time for the uḍḥiyyah comes to an end?

 
 
 
 
 
 

 
In the Name of Allah, and may peace and blessings be upon our Master, the Messenger of Allah.
 
If the sun sets on the final day of Tashriq (the 13th of Dhu al-Hijjah) and the Udhiyah (sacrificial animal) has not yet been slaughtered, its designated time has expired. Should a person slaughter it after this point, it will not be counted as an Udhiyah.
 
However, if the sacrifice was a vowed one (Mandhurah), they are strictly obligated to slaughter it as a makeup act (Qada’), and its meat must be distributed entirely according to the rules governing vowed sacrifices.
 
It is stated in Bushra al-Karim (p. 702): "If one slaughters after sunset on the final day [of Tashriq]... it does not count as an Udhiyah, unless it was a vowed sacrifice, in which case it is fulfilled as a makeup act (Qada’)." And Allah the Almighty Knows Best.

Is a person rewarded for refraining from all that breaks their fast when required to do so, and is it considered a valid fast?

If a person eats or drinks thinking that Fajr has not yet arrived, but then someone informs them that Fajr had already begun, they must refrain from eating for the rest of the day and make up the fast later.
If they observe the required restraint (imsak), they will be rewarded for obeying the command because fulfilling an obligation brings reward.
However, this is not considered a valid fast in terms of rulings. For example:
● It is not disliked (makruh) for them to use a miswak after noon.
● They are not encouraged to hasten the breaking of the fast at sunset.
● Other fasting-related rulings do not apply to them.

What is the ruling on giving Zakat al-Fitr in cash?

The default ruling is that Zakat al-Fitr should be given as the staple food of the land. In Jordan, for example, the staple food is wheat or rice, and the amount of Zakat al-Fitr is 2,500 grams per person. It is easy to give this amount of rice to the poor and needy, and this is the correct ruling according to all Islamic schools of thought.
However, Hanafi scholars have permitted giving Zakat al-Fitr as monetary value, considering it more beneficial for the poor and easier for the giver.

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