LLMs are one of the core components of Artificial Intelligence (AI). A brief summary is given of its essential mathematical structure. The possible applications of LLMs to Islamic finance is discussed. This article is based on an introduction to LLM by Baaquie.

The standards developed by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) play a strategic role in shaping the governance, accountability, and transparency of Islamic financial institutions at the global level. This research aims to map the development of research related to AAOIFI Standards and elaborate on the main themes that appear in the academic literature. The methods used were bibliometric analysis and keyword mapping of scientific publications with the theme of AAOIFI Standards, which were then analyzed descriptively and thematically. The results of the study show six main clusters, namely: (1) Islamic banking governance and AAOIFI Standards, (2) accountability and sustainability of Islamic financial standards, (3) global Islamic accounting standards, (4) harmonization of Islamic financial law, (5) regulation of Islamic banking standards, and (6) transparency of Islamic financial reporting. These findings confirm that AAOIFI not only functions as a technical accounting guideline, but also as an instrument for governance, regulatory harmonization, and strengthening sustainability and public trust in the Islamic financial system. This research makes a conceptual contribution to the development of Islamic financial literature and policy implications for regulators and practitioners of Islamic financial institutions.

One of the most important moral issues affecting the Muslim world is environmental degradation, which requires an examination of the Islamic teachings’ emphasis on human responsibility to the natural world. This article examines how Green Sukuk combines contemporary sustainability principles with Islamic environmental ethics to function as a faith- based financial tool for advancing sustainable development. The study uses a qualitative, library-based analysis to look at the framework of maqasid al-shari‘ah, specifically the preservation of life, wealth, and the environment, as well as Quranic ideas like khalifah (stewardship), amanah (trust), and mizan (balance). Findings indicate that by coordinating economic activity with moral and ecological accountability, Green Sukuk not only encourages investments that are environmentally conscious but also operationalizes Islamic ethical principles. The study concludes that Green Sukuk is useful. Findings suggests that by coordinating economic activity with moral and ecological accountability. Green Sukuk not only encourages investments which are environmentally conscious but also operationalizes Islamic ethical principles. The study concludes that Green Sukuk is a workable example of using faith to finance sustainability, completing the gap between Islamic finance and environmental ethics and providing a means of achieving both ecological and spiritual well-being.

Mudharabah financing in Indonesian Islamic banking remains low (6-8%) due to moral hazard and asymmetric information risks, limiting profitability despite its profit-sharing potential. This study analyzes Incentive Compatible Constraints (ICC) implementation at BPRS Al-Washliyah Medan to mitigate risks and enhance profitability. Using qualitative field research, purposive and snowball sampling targeted employees and mudharabah stakeholders (n=unspecified, saturation-based). Data from interviews, observations, and documents were analyzed via Miles & Huberman's model (reduction-presentation-verification). Findings reveal ICC strategies—collateral requirements, age/debt service limits, transparent monitoring, revenue-sharing ratios—effectively reduce moral hazard while boosting profitability through healthier bank-customer partnerships. Implementation challenges include individual customers lacking audited reports and resource constraints. Conclusions recommend standardized ICC guidelines and quantitative model development for broader Islamic finance applications.

Purpose This study aims to examine the direct and indirect relationships between Islamic leadership (IL) and employee Islamic performance (EIP) through Islamic work ethic (IWE), Islamic work motivation (IWM) and organizational commitment (OC) in the context of Indonesia’s Islamic banking sector. Grounded in the principles of amanah (trust), adl (justice), shura (consultation), and taqwa (piety), the study seeks to provide empirical evidence on the mechanisms through which leadership values rooted in Shariah contribute to employee outcomes. Design/methodology/approach A quantitative approach was employed using partial least squares structural equation modeling to analyze data from 364 employees of major Islamic banks in Indonesia. The model tested both direct paths and mediating effects involving IL, IWE, IWM, OC and EIP. Reliability, validity and model fit were assessed to ensure robustness. Findings IL has a significant positive effect on EIP, both directly and indirectly, through IWM and OC. By contrast, the mediating role of IWE was found to be nonsignificant. These results confirm that while Islamic ethical values are important, their impact on performance is most strongly realized when reinforced by leadership-driven motivation and commitment. Research limitations/implications The study is limited to Indonesia’s Islamic banking sector, which may affect generalizability. Future studies could expand to other cultural or institutional contexts and use qualitative methods to capture deeper insights into IL processes. Practical implications The findings suggest that Islamic banks should strengthen leadership development and human resource management (HRM) programs that emphasize amanah, adl, shura and taqwa. Focusing on enhancing motivation and OC is particularly critical to translating leadership values into sustainable performance outcomes. Originality/value This research offers a novel empirical framework linking IL with key organizational outcomes. It extends the literature on Islamic organizational behavior by demonstrating the pathways through which spiritual leadership values drive motivation, commitment and ethical performance in financial institutions.

Purpose Islamic banks in the Middle East and North Africa nations are encountering challenges similar to those in microfinance, with certain countries, such as Lebanon, seeing stagnation in the growth of Islamic banking and finance. The objective of this study is to examine the effect of intellectual capital on credit risk and financial stability within the context of Islamic banks in the Middle East and North Africa region. Design/methodology/approach This study uses the generalized method of moments and the two-stage least squares method to conduct this research. It uses bank data from 972 observations from 2011–2022 in the Middle East and North African countries. Findings The findings show that human capital efficiency, relational capital efficiency, structural capital efficiency and modified value-added intellectual capital negatively correlate with credit risk. In contrast, all of these variables demonstrate a positive impact on financial stability. It suggests that enhancing intellectual capital is expected to contribute to mitigating credit risk, hence promoting excellent financial strength. Social implications By drawing attention to Islamic banks that require intellectual capital and financial stability, this study offers policymakers important information regarding the economic and social well-being of countries in the Middle East and North Africa region. Originality/value This study furnishes banks with information regarding the role of intellectual capital in enhancing financial stability through the mitigation of credit risk.

This study aims to analyze the influence of Islamic financial literacy and the ease of use of digital services on customers’ decisions to use Islamic digital banking products, with Islamic financial inclusion as a mediating variable. The research employs a quantitative approach using a survey method. Data were collected through questionnaires distributed to Islamic bank customers who use digital services in Indonesia. Data analysis was conducted using the Partial Least Squares–Structural Equation Modeling (PLS-SEM) method with the assistance of SmartPLS 4 software. The results indicate that Islamic financial literacy and the ease of use of digital services have a positive and significant effect on customers’ decisions to use Islamic digital banking products. In addition, both variables also have a positive and significant influence on Islamic financial inclusion. Islamic financial inclusion, in turn, has a positive effect on customers’ decisions and is able to mediate the relationship between Islamic financial literacy, the ease of use of digital services, and the decision to use Islamic digital banking products. The novelty of this study lies in the development of an integrative research model that combines Islamic financial literacy and the ease of use of digital services by incorporating Islamic financial inclusion as a mediating variable within the context of digital Islamic banking. This study is expected to enrich academic literature on customer decision behavior and provide practical implications for Islamic banking institutions in enhancing inclusive and sustainable digital service adoption.

This study aims to analyze the influence of financial literacy, information technology, trust, and human resources on Generation Z’s saving interest in Islamic banks. The research employs a quantitative approach using a survey method. Primary data were collected through questionnaires distributed to Generation Z respondents in Surakarta City and analyzed using multiple linear regression analysis. The results indicate that financial literacy and trust have a significant partial effect on Generation Z’s saving interest in Islamic banks. Meanwhile, information technology and human resources do not show a significant partial effect. However, simultaneously, financial literacy, information technology, trust, and human resources significantly influence Generation Z’s saving interest in Islamic banks. These findings suggest that improving Islamic financial literacy and strengthening trust among Generation Z are key factors in increasing saving interest in Islamic banking. This study is expected to provide insights for Islamic banks in formulating strategies to enhance financial inclusion and market penetration among younger generations.

This study analyzes the implementation of fintech technology in online financing in Islamic banks, focusing on operational efficiency and compliance with sharia principles. Using secondary data from the February 2025 LPBBTI Statistics published by the Financial Services Authority (OJK), this study applies descriptive statistical analysis and trend analysis to assess the impact of fintech on the performance of Islamic banks. The results show that the implementation of fintech improves operational efficiency and expands access to financing services, despite the decline in some financial indicators. Challenges related to sharia compliance were also found, especially in fintech products that potentially involve riba and gharar. This study suggests the importance of a deeper study of sharia fintech regulations in Indonesia, strengthening the role and competence of the Sharia Supervisory Board to ensure sharia compliance in the implementation of fintech in Islamic banks.

This research is motivated by the Bank Syariah Indonesia (BSI) integration policy, a strategic step taken by the government to strengthen the national Islamic banking structure to address the challenges of financial stability, global competitiveness, and sustainable Islamic economic development. This study aims to analyze the implications of BSI institutional integration on strengthening the Islamic banking system, financing the real sector, and transforming governance and digitalization to support the national Islamic economy. The research method used is qualitative with a descriptive approach through a literature review of scientific journals, academic books, and relevant official reports. The research findings indicate that BSI integration has a positive impact on increasing business scale, strengthening capital, operational efficiency, and optimizing risk management, which contributes to the stability of the Islamic financial system and global competitiveness. Furthermore, integration strengthens the intermediation function of Islamic finance by increasing the financing capacity of the real sector, particularly MSMEs, expanding profit-sharing contracts, and accelerating financial inclusion through digitalization. The research findings also confirm that the success of integration is largely determined by the synergy between Sharia governance and compliance, the use of digital technology, and effective change management based on leadership and alignment of organizational culture. The implications of this research indicate that BSI integration not only strengthens Islamic banking institutions but also serves as an important foundation for the development of a just, inclusive, and sustainable national Islamic economy.

This study aims to examine the effectiveness of the al-shulhu approach in resolving Islamic economic disputes, particularly in cases of breach of murabahah contracts in Indonesia. Employing a qualitative approach with a library research design, this study collects data from academic journals, books, and regulations such as DSN-MUI fatwas through qualitative content analysis. Source selection was based on criteria of relevance to the topic, recency of publication (focusing on the 2020–2025 range). The findings indicate that al-shulhu, rooted in the principle of sulh in the Qur’an (Surah An-Nisa: 128), is an effective dispute resolution mechanism as it emphasizes justice (al-‘adl), honesty (as-sidq), and mutual consent (ridhā). This approach enables solutions such as financing restructuring or penalty reductions without violating sharia principles, while maintaining social harmony between Islamic banks and clients. However, the application of al-shulhu faces challenges, including the lack of a clear legal framework, inconsistent implementation across institutions, and a shortage of competent mediators with expertise in Islamic law. This study contributes to academic discourse by bridging classical Islamic legal theory with modern dispute resolution practices and provides practical recommendations for Islamic financial institutions and regulators, such as OJK and DSN-MUI, to integrate al-shulhu into the national legal system through clear regulations and mediator training. The study recommends further empirical research to enhance understanding of al-shulhu’s application in religious courts and Islamic financial institutions.

The development of Islamic banking in Indonesia through spin-off mechanisms from conventional banks raises juridical-philosophical issues related to the legality and legitimacy of initial capital sources derived from interest-bearing (riba) businesses. This study aims to comprehensively analyze the establishment of Islamic banks sourced from the interest-bearing profits of conventional banks from the perspective of Indonesian positive law and Islamic law. As comprehensive qualitative research, this study employs a normative juridical method with statutory and conceptual approaches. The results show that from a formal-juridical perspective, the establishment of Islamic banks through spin-offs is permitted by national banking regulations, specifically Law No. 21 of 2008, which places greater emphasis on fulfilling capital and institutional aspects. However, substantively, Islamic law requires a process of separation and purification of assets (tathhir al-mal) to cleanse capital from elements of riba. Without this mechanism, the Islamic legitimacy of the bank becomes fragile, even if its formal legality is met. This study confirms that substantive sharia compliance, which includes the purity of capital sources, is a fundamental prerequisite for maintaining the integrity and public trust in the sharia banking industry in Indonesia.

The rapid growth of Indonesia’s Islamic finance industry contrasts with persistently low Islamic financial literacy, particularly among university students as future professionals. This study aims to synthesize existing literature to develop an integrative framework for embedding Islamic financial literacy within higher education curricula, identify multi-level implementation barriers, and propose adaptive strategies aligned with digital transformation. Using a qualitative Systematic Literature Review (SLR), this study analyzes ten peer-reviewed publications published between 2021 and 2025 through content and thematic analysis. The findings indicate that effective integration requires a holistic curriculum design encompassing cognitive, affective, and psychomotor competencies, supported by institutional readiness, lecturer capacity, and multi-stakeholder collaboration. Major barriers emerge at the micro, meso, and macro levels, including superficial digital literacy, limited interdisciplinary expertise among lecturers, fragmented institutional policies, and weak coordination between academia, industry, and regulators. This study demonstrates that digital transformation offers strategic opportunities to strengthen Islamic financial literacy through interactive, experiential, and community-based learning, provided it is accompanied by the development of critical and ethical financial reasoning. The main contribution of this research lies in proposing an integrative framework that connects curriculum design, implementation barriers, and adaptive strategies within a value-based and digitalized education context, offering theoretical and practical implications for higher education institutions and policymakers.

Russian financial institutions participating in the experiment on the development of partnership financing have started to increase the volume of transactions based on Islamic principles since 2023. Among them are banks and other public organizations. In this sector, it is especially important to take into account the long-term experience accumulated by Islamic financial institutions in disclosing information about their activities in annual reports. The purpose of the study is to assess the disclosure of information about the activities of Islamic financial institutions in annual reports and to develop theoretical approaches to its improvement for further use by Russian participants in partnership financing. The work uses comparative and deductive analysis methods , as well as logical and systemic approaches. The authors assessed the disclosure of information in annual reports by Islamic financial institutions based on more than 30 ratios grouped by categories of profitability, liquidity, asset quality, and capital adequacy. The authors identified the key indicators that Islamic financial institutions present to stakeholders for making investment decisions based on the information in annual reports. The results show that for investors of financial organizations, including those operating on the principles of the “Islamic window” (including Russian organizations participating in partnership financing), it will be constructive to disclose key indicators of Islamic financing operations in terms of six indicators (the CAMEL model modified by the authors) and five adjusted indicators of the performance index of these operations (Islamic Performance Index). The main conclusion of the study is the thesis on the need to adapt the modified CAMEL model by Russian participants in partnership financing to improve the quality of information disclosed in annual reports on their business models and attract investor funds to the industry.

This study investigates the effects of Islamic work motivation, Islamic leadership style, and Islamic organizational culture on job satisfaction and employee performance in an Islamic banking institution in a post-merger context. Using a quantitative explanatory approach, data were collected through a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling. The findings show that Islamic leadership and Islamic organizational culture have significant direct effects on job satisfaction and employee performance. Islamic work motivation influences performance indirectly through job satisfaction. These results highlight the central role of values-based leadership and organizational culture in shaping employee outcomes and provide practical implications for leadership development and cultural integration in Islamic banking

This study aims to examine the effects of hard skills and soft skills on the work readiness of Islamic banking alumni, both directly and indirectly through work motivation as an intervening variable. A quantitative research design was employed using a census approach involving 196 alumni of the Islamic Banking Study Program at UIN Mahmud Yunus Batusangkar who had entered the workforce. Data were collected using structured questionnaires and analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) with SmartPLS 4.0.The results indicate that hard skills and soft skills significantly influence work motivation and work readiness. Soft skills demonstrate a stronger effect on work motivation, while motivation plays a crucial mediating role in strengthening the relationship between both types of skills and work readiness. Furthermore, work motivation significantly enhances graduates’ preparedness to meet professional demands, particularly in the Islamic banking sector. These findings contribute theoretically by reinforcing the role of motivation as a key mediating variable linking technical and non-technical competencies with work readiness. Practically, this study provides important implications for higher education institutions and the Islamic banking industry in designing curricula and development programs that integrate the enhancement of hard skills, soft skills, and motivational aspects to improve graduate employability and career alignment with the Islamic financial sector

The adoption of Artificial Intelligence (AI) and large language models by Islamic financial institutions is accelerating rapidly. While this offers great opportunities, it has also raised many serious concerns over Shariah compliance. This paper critically assesses the role of AI in Ifta and Shariah advisory services in Islamic banking and finance, with reference to Bangladesh's regulatory and ethical framework. Drawing on both classical and modern Usul al-Fiqh literature, this study confirms that the institution of ifta is founded on qualities essential to humanity. These are primarily taqwa (Allah-consciousness), the spiritual eye (firasah), the contextual meaning of urf and maslaha, and accountability before Allah. This is because they are essential for achieving the aims of the shari’ah. Finally, the view is also upheld that AI is deficient and cannot possess these basic human qualities. The classical conditions (being a Muslim, mukallaf, adil, thiqah, competent in ijtihad) for a mufti are not satisfied by AI systems. In addition, technical flaws. The factors of statistical hallucination, training data bias, incomplete digitization of classical sources, and the absence of real-time socio-cultural contextualization make AI-generated fatwas, produced independently, unreliable. They can also be disastrous if used in sensitive financial contracts. Nonetheless, the use of human-in-the-loop systems in the Ifta (Fatwa issuance) process can yield significant ancillary benefits, such as rapid retrieval of classical fatwas, comparative fiqh, drafting preliminary opinions, and improved Shariah audit efficiency. The author proposed “Shariah Governance Framework for Artificial Intelligence (AI) Integration” for the Islamic financial institutions (IFIs) of Bangladesh which mandates (a) human-mufti oversight at the final stage of decision-making of AI software, (b) regular ethical and bias audits, (c) mandatory disclosure when tools of AI are used, (d) a national oversight committee “AI-in-Ifta Oversight Committee” to be formed and operated under the Central Shariah Board (CSB), and (e) continuous and regular training on AI literacy of the Shariah advisors without undermining their original capacities of ijtihad. The study takes a step toward a balanced use of technology by proposing the “augmented ifta” model rather than the “automated ifta,” which aligns with the maqasid al-Shariah. Furthermore, the study contributes directly to the conference themes, namely AI & Fintech Innovations, legal and regulatory innovations, and the ethical foundations of sustainable finance.

This study aims to analyze the development of digital transformation in the Islamic economy over the past decade, its contribution to accelerating prosperity distribution in Indonesia, as well as the opportunities and challenges encountered. Digital transformation has been proven to play a vital role in improving financial inclusion, operational efficiency, and global competitiveness, particularly in Islamic banking, halal industries, zakat management, and mosque transformation. The research employed a systematic literature review of ten scholarly articles related to the digitalization of the Islamic economy. The analysis identified the patterns of development, contributions, opportunities, and challenges highlighted by each study. The findings reveal that digitalization drives economic growth, strengthens zakat redistribution, enhances halal industry competitiveness, and expands the socio-economic role of mosques. However, challenges such as regulatory uncertainty, low digital literacy, and cybersecurity risks remain major barriers. In conclusion, digital transformation serves as both a growth engine and a catalyst for equitable prosperity distribution within the Islamic economy.

Purpose: This study aims to analyze the influence of the implementation of Islamic accounting based on AAOIFI standards on the financial performance of Islamic banks in Qatar. Methodology: Financial performance is measured using three key indicators: Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). The research data were collected from six leading Islamic banks in Qatar during the period of 2019 to 2023, employing a quantitative method and linear regression analysis to test the relationship between the level of compliance with Islamic accounting standards and financial performance. The AAOIFI compliance measurement instrument was developed through a Likert-scale questionnaire that was tested for validity and reliability. Findings: The results indicate that the implementation of Sharia accounting has a positive and significant effect on all three financial performance indicators. Specifically, every one-point increase in the AAOIFI compliance score raises ROA by 0.02%, ROE by 0.105%, and NPM by 0.215%. The regression model explains 38% to 47% of the variance in financial performance, suggesting that applying Sharia accounting standards plays a critical role in improving asset management, equity efficiency, and net profit generation in Islamic banks. Orginility: These findings reinforce the importance of integrating AAOIFI standards into Islamic banks’ financial reporting to enhance transparency, accountability, and competitiveness. This study provides practical implications for Islamic bank management and Islamic financial regulators, particularly in promoting the global harmonization of Sharia accounting standards. Furthermore, this research serves as a reference for future studies to examine Sharia governance aspects and other moderating variables.

Indonesia’s Islamic banks have usually been judged on narrow yardsticks how cheaply they run or how well they convert inputs into outputs. We stepped back and looked at all three sides of the coin at once: how wisely they spend, how effectively they earn, and how much profit is left on the table. Using a standard DEA model that allows for variable returns to scale, we tracked nine full-fledged Islamic commercial banks from 2016 through 2022. The headline numbers are blunt: on average they waste 45 % of their inputs (cost efficiency 0.55), leave 28 % of revenue on the floor (revenue efficiency 0.72), yet still manage to keep 84 % of every rupiah of potential profit (profit efficiency 0.84). After the 2019 mega-merger that created Bank Syariah Indonesia and the accompanying push into mobile banking, all three scores ticked upward. The takeaway for OJK and KNKS is simple: Indonesian Islamic banks can stay profitable even while they remain sloppy on cost; regulators now have an integrated benchmark that ties financial survival to the Maqasid al-Shariah goal of protecting wealth.