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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

What is the ruling on forgetting an integral of the prayer?

Praise be to Allah, and peace and blessings be upon our Master, the Messenger of Allah.
 
Whoever forgets an integral (Rukn) of the prayer and remembers it before reaching the equivalent point in the subsequent unit (Rak'ah), must return to it (i.e., perform it) and complete his prayer, then perform the prostration of forgetfulness (Sujud al-Sahw) at the end of his prayer. However, if he remembers it after reaching the equivalent point in the subsequent unit, the Rak'ah in which the integral was forgotten is invalidated, and the current unit takes its place; he then completes a full Rak'ah to compensate and performs the prostration of forgetfulness.
 
It is stated in Nihayat al-Muhtaj ila Sharh al-Minhaj (Vol.1/P.543): 'If he becomes certain at the end of his prayer, or after the Salam—provided the interval is not long according to custom and he has not stepped on an impurity—that he omitted a prostration from the final Rak'ah, he must perform it and repeat the Tashahhud, as his previous Tashahhud occurred before its proper place. If the omission was from a Rak'ah other than the final one, he must perform a full Rak'ah, because the deficient unit was completed by a prostration from the subsequent one, rendering the rest of that subsequent unit void.' And Allah the Exalted knows best.

Is fasting obligatory for a child?

Fasting is not obligatory for a child until they reach puberty. Puberty is determined by well-known signs, the most common of which are: nocturnal emission (for both males and females), menstruation (for females), or reaching the age of fifteen lunar years.
A guardian must instruct their children to fast once they reach the age of discernment, which is around seven years old, if they are capable of fasting.

What is the ruling on forgiving a tenant next month's rent, with the intention of counting it toward zakāh al-māl?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah ﷺ.
It does not fulfill the obligation to count the rent owed on a house, or a portion of it, in lieu of zakāh. Rather, it is necessary to first transfer ownership of the zakāh amount to the poor person directly; only afterward may he be asked to pay the rent [from that money].
It is stated in ‘Umdat as-Sālik (p. 112): "If someone gives [money] to a poor person, stipulating that the recipient return it to him in payment of a debt owed to him, or says, 'I am making what you owe me into zakāh, so take it [as such]' — this is not valid. But if he gives it to him with the [unstated] intention that the recipient will use it to repay him, or says, 'Repay what you owe me, so that I may [then separately] give it to you as zakāh,' or the debtor himself says, 'Give it to me, so that I may [then] repay you with it' — this is valid, and there is no binding obligation for the recipient to actually fulfill this [informal understanding]."
We would also remind [the reader] of the ḥadīth of the Prophet ﷺ: "The Muslim is the brother of the Muslim: he does not wrong him, nor does he abandon him [to harm]. Whoever attends to the needs of his brother, Allah, the Mighty and Majestic, will attend to his needs. Whoever relieves a Muslim of a hardship, Allah, the Mighty and Majestic, will relieve him of one of the hardships of the Day of Resurrection. And whoever conceals [the faults of] a Muslim, Allah will conceal him on the Day of Resurrection." (Agreed upon). And Allah, the Exalted, knows best.

What is the ruling on performing Tarawih in sets of four rak‘ahs with only one Tasleem?

It is not permissible to combine more than two rak‘ahs with a single Tasleem in Tarawih prayer. Whoever does so, their prayer is invalid. Shaykh al-Islam Imam Muhammad al-Ramli (may Allah have mercy on him) stated: "If a person prays four rak‘ahs of the Tarawih prayer with a single Tasleem, it is not valid if they did so intentionally and with knowledge [of the prohibition]. Otherwise, it becomes an 'absolute voluntary prayer' (nafl mutlaq); because it is contrary to what has been prescribed." [Nihayat al-Muhtaj, Vol.2/P.127].

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