THE ROLE OF INFORMATION TECHNOLOGY IN ENHANCING THE EFFECTIVENESS OF SHARIAH SUPERVISION IN ISLAMIC BANKS

Abstract

This study investigates the role of Information Technology (IT) in enhancing the effectiveness of Shariah supervision in Islamic banks. In light of the rapid digital transformation of the global financial sector, Islamic banking institutions are increasingly required to integrate advanced technological solutions to ensure efficient and continuous compliance with Shariah principles. The study adopts a qualitative research approach based on a comprehensive review and synthesis of recent academic literature, focusing on FinTech, blockchain, artificial intelligence, and Regulatory Technology applications in Islamic finance.

The study reveals that Information Technology greatly enhances the efficiency of Shariah supervision by facilitating real-time monitoring, improving transparency, and ensuring greater accuracy in compliance processes. Innovations like blockchain strengthen the traceability and accountability of financial transactions, while AI and RegTech solutions streamline automated compliance monitoring and risk detection. Despite these advantages, the research highlights several challenges, such as a lack of technological expertise among Shariah supervisory board members, the absence of standardized Shariah-compliant digital frameworks, and resistance within institutions to adopting digital transformations.

The study concludes that Information Technology plays a critical role in strengthening Shariah governance systems in Islamic banks. Nevertheless, its successful implementation requires capacity building, regulatory standardization, and closer integration between Shariah scholars and technology experts to ensure alignment with Islamic principles.