CYBERSECURITY AND ARTIFICIAL INTELLIGENCE IN ISLAMIC BANKS: EVALUATING READINESS, VULNERABILITIES, AND COMPLIANCE

Abstract

The swift adoption of digital technologies in the financial sector has prompted Islamic banks to more frequently implement systems powered by Artificial Intelligence (AI) for managing risks, serving customers, and improving operational effectiveness. Nonetheless, this shift towards technology brings forth new challenges in cybersecurity that challenge the readiness of institutions and adherence to regulations. This research investigates the existing status of cybersecurity frameworks in Islamic banks, assesses their capability to securely incorporate AI, and pinpoint key weaknesses that could make them vulnerable to cyber risks. By utilizing a mixed-method strategy that includes policy evaluations, interviews with experts, and tools for assessing cybersecurity, the study reveals shortcomings in technological infrastructure, employee skill sets, and governance of AI practices. Special focus is placed on compliance with Shariah requirements, which affect how data is managed, the limits of automation, and the ethical implementation of AI. Results show that although Islamic banks are increasingly utilizing AI technologies, there is a wide disparity in their levels of cybersecurity maturity, with many institutions struggling to integrate new technologies with international cybersecurity norms and Islamic regulatory requirements. The research suggests a series of strategic recommendations, such as enhancing workforce capabilities, developing AI-centered risk management frameworks,and establishing cybersecurity policies that add to Shariah principles to strengthen resilience and promote responsible and compliant AI integrathion within the Islamic Banking Industry.