Artificial Intelligence in Islamic Banking: Ethical and Operational Implications for Shariah Governance and Risk Management
Keywords:
Artificial Intelligence, , Islamic Banking, Islamic Banking, Shariah Governance, Ethics, Maqasid Al-Shariah, Risk ManagementAbstract
This study examines the ethical and operational implications of Artificial Intelligence (AI) integration in Islamic banking, focusing on its influence on Shariah governance and risk management. As Islamic financial institutions in Southeast Asia and the Middle East increasingly adopt AI-driven systems—such as automated Shariah screening, risk analytics, and digital customer engagement platforms—the need to balance technological efficiency with Islamic ethical principles has become critical. Employing a qualitative research design, data were collected through semi-structured interviews with Shariah scholars, Islamic banking practitioners, regulators, and AI specialists. Thematic analysis, supported by NVivo software, was used to identify patterns and themes related to ethics, governance, and risk management. The findings reveal that while AI enhances accuracy, transparency, and efficiency in Shariah compliance and operational processes, it also introduces new ethical challenges concerning accountability, bias, and the potential dehumanization of decision-making. Participants emphasized the necessity of maintaining human oversight and ensuring that AI applications align with the higher objectives of Shariah (Maqasid al-Shariah), particularly in promoting justice, welfare, and public interest (maslahah). The discussion situates these insights within socio-technical systems theory, highlighting the interplay between technological systems and Islamic moral governance. Overall, the study concludes that AI can serve as a transformative tool in advancing Islamic finance if its deployment is guided by ethical principles, robust governance structures, and continuous Shariah supervision.
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