Artificial Intelligence (AI) innovations in financial services can be adapted to support Islamic Banking and Finance; however, the Shari’ah compliance requirements create a challenge unique to Islamic Financial Institutions (IFI). They must certify their products to ensure compliance with Shari’ah guidelines. Shari’ah committees (SC) of IFIs have to review their products in reference to Shari’ah sources of knowledge, and assess the objectives and consequences of such products. This research explores applications of AI Smart Assistants for the Fiqh ruling processes in Islamic banking, and their acceptance by the SCs of Islamic banks in Malaysia. It investigates the potential and challenges of their implementation, and aims to propose improvements for AI Smart Assistants for the Fiqh ruling process for Islamic banking. This study reviews efforts that have been made to develop AI smart assistants for the fiqh ruling process including an in-depth interview with the author of a purpose-built AI Mujtahid Assistant. This study also explores the potential of recent innovations in general purpose Generative Pre-Trained Transformers (GPT) for use in the Fiqh ruling process. This study employs a qualitative methodology based on the Unified Theory of Acceptance and Use of Technology (UTAUT) framework. This involves focus group interviews conducted with prominent Malaysian SC members. These explore dimensions of acceptance, and the potential and challenges in the implementation. Thematic analysis is used to integrate these perspectives. Additional qualitative data was gathered in the form of technical feedback from an expert in developing AI knowledge-based systems, which informs the proposed improvements. The findings demonstrate a strongly positive desire among participants to utilize these new technologies because they will improve the quality and efficiency of their work. The benefits of collective adoption, developing a centralized knowledge base, and the promotion of industry regulation, were among the key positive findings regarding acceptance. Important insights from potential users include the need to include sources of reference, concerns over the body of knowledge, and the need to be accessible for less tech-savvy users. For policymakers, this study demonstrates broad acceptance and essential understanding, needed to justify investment in AI for the fiqh ruling process by IFIs in Malaysia; however, it also underscores a need for collaboration between institutions for effective delivery. This would include pooling resources, and cooperation in creating effective regulation. This study proposes an innovative and comprehensive model, of interest to technology solution providers and end users as well as scholars.

This paper aims to review the use cases of AI applications implemented in Islamic financial institutions across the globe to get some understanding on how AI can be applied in real business environment of providing Shariah compliant financial services. To get real industry examples, the study utilizes content analysis method in reviewing Islamic financial technology reports and related news. The findings indicate that Islamic financial institutions across the globe have incorporated AI based digital innovations in general operations. However, AI applications in the Shariah compliance aspect is still limited. A more coordinated collaboration among academics and Islamic finance industry players with respective Shariah and technology backgrounds is crucial to unleash the potential of AI applications in Shariah compliance of Islamic finance.

Decision Support System (DSS) refers to computer systems designed to help with decision making process. DSS usage are now common in both personal and commercial decision making; including those related to the Islamic faith. Simple Applications (Apps) that help with simple decisions such as to ascertain halal statuses are prevalent. To what extent can DSS facilitate more complicated Islamic decision making such as fiqh ruling, hadith classification and zakat or faraid computations? This paper aims to review DSS initiatives (academic and commercial) intended for the more complicated Islamic or Shariah decision making process and to identify the potentials and challenges especially in the contemporary ijtihad of reviewing and certifying the Shariah compliant statuses of Islamic finance products and services. It is expected that the new digital mindset created by IR 4.0, accelerated by the Covid-19 pandemic; paved the way for the huge potential of Islamic DSS; especially in the Islamic Banking and Finance industry. Artificial Intelligence (AI) technology makes it possible to represent Islamic knowledge into computer processable format to enable complex Shariah decision making. The main challenge is to get a human Shariah expert that is capable of translating his/her knowledge into computable format which leads to lack of Islamic DSS(s) in the market that can be utilized to support Shariah related decision making.