The Role of AI-Based Decision Making Systems for Risk Management in Sharia Banking Institutions

Islamic banking institutions must adhere to Islamic principles and rules in all their operations and transactions, including risk management that takes into account the unique aspects of Islamic banking. The risks involved include credit, operational, and market, which require a deep understanding and effort to identify, measure, monitor, and control these risks. The use of artificial intelligence can help analyze big data related to transactions, customers, and market conditions to support better decision making in managing risk. AI technology can also improve security against threats such as fraud and cybercrime by detecting suspicious activity early. Islamic banking institutions need to remain innovative and efficient in their risk management, using technologies such as AI to provide a competitive advantage. Therefore, the role of AI-based decision-making systems is important to improve the performance and resilience of Islamic banking institutions. This study aims to explore the role and impact of the use of artificial intelligence (AI) technology in the role of AI-based decision-making systems for risk management in Islamic banking institutions. This study uses a qualitative approach through surveys, interviews, and data analysis with a focus on the role of AI-based decision-making systems for risk management in Islamic banking institutions. The findings of this study show that Islamic banking institutions need to remain innovative and efficient in their risk management, using technologies such as AI to provide a competitive advantage. Therefore, the role of AI-based decision-making systems is important to improve the performance and resilience of Islamic banking institutions. The limitation of this study is only banks located in Bandar Lampung and lies in access to internal and sensitive data from Islamic banks that are the subject of research that affect the depth of analysis and interpretation of findings. This study uses new or innovative approaches or methodologies in exploring the use of artificial intelligence technology in the context of Islamic banks. This approach can provide deeper and different insights than previous research.