UmarM_AI-IslamicBanking_Version2.pdf

Islamic banking, grounded in Shariah principles, is emerging as a sustainable and ethical alternative to conventional interest-based banking. With the rapid advancement of artificial intelligence (AI), financial institutions have new opportunities to innovate business models, enhance operational efficiency, and strengthen customer trust. This study develops a conceptual framework that integrates AI applications into Islamic banking operations, focusing on value creation, delivery, and capture in line with ethical finance. By comparing Islamic and conventional banking practices, the paper highlights AI’s potential in automating Shariah compliance, optimizing resource use, and improving customer engagement. The findings suggest that AI-driven business model innovation can accelerate the global adoption of Islamic banking, particularly in emerging economies, while aligning with the principles of sustainability and responsible finance.