Generative Artificial Intelligence and Shariah Governance in Islamic Banks: A Conceptual Framework for Responsible Adoption
DOI:
https://doi.org/10.70568/ujfiiai.3.1.4Keywords:
Generative artificial intelligence, Islamic banking, Shariah governance, Maqasid al-Shariah, Responsible AI, TOE frameworkAbstract
The generative artificial intelligence (GenAI) is entering the banking sector in a fast way, and the Islamic banks are not an exception from this trend. However, the Islamic banks face an additional requirement that the conventional banks do not face, which is the requirement of the Shariah compliance in every product, process, and communication. The objective of this paper is to develop a conceptual framework that explains how the Islamic banks can adopt the GenAI in a responsible way while protecting the Shariah governance. The paper follows a conceptual research design, and it is based on a structured integrative review of the literature on the AI in banking, the Shariah governance, the technology adoption, and the responsible AI. The framework integrates the Technology-Organization-Environment (TOE) framework with the Maqasid al-Shariah perspective, and it proposes six propositions. The propositions explain that the technological, organizational, and environmental readiness affect the GenAI adoption, and the GenAI adoption is expected to improve the Maqasid-oriented outcomes, where this relationship is moderated by the Shariah governance mechanisms and by the responsible AI principles. The paper contributes to the literature by moving the discussion from the general FinTech in the Islamic finance to the specific risks of the GenAI, such as the hallucination and the opacity of the model outputs. In addition, the paper provides practical guidance for the Shariah boards, the regulators, and the bank managers, and it suggests an agenda for the future empirical research.
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