Islamic Banks & Suboptimal Adoption of AI Integrated e-Banking System

The Islamic commercial banks and Islamic Investment Banks (IIBs) fail to satiate the demands of business houses and depositors effectively due to their lethargy to adopt AI integrated e-banking system (AIES). The failure to power operations, arm clients and customers by AI heightens delay in understanding their choices to deliver services and loans demonstrating gaps between the demand for integrated services and their delivery. These are the outcomes of weak decisions, high service processing cycle time etc, retarding relationship management between the banks and their clients and depositors. The inability to nurture this relationship weakens the Bahraini Islamic banks’ market share, profitability and competitive advantage.?

It is relevant to note that the adoption and implementation of AIES strengthens e-banking, magnifying customer centricity, promoting efficiency of operations and accelerating management of transactions. The system yields desired value when only the executives in Islamic Banks are in position to access live data, assess behaviour and choices of customers and depositors, understand their investment preferences, tailor services and innovate portfolio. Uninterrupted usage of the system ensures responsive banking, delivering services efficiently, satisfying an Islamic Bank’s customers and maximising its profitability.

In view of the above, it is pertinent to state that AIES provides the pillars of customer centered banking (CCB), cementing the association between techno-centric banking (TCB) and profitability. TCB will provide the central fulcrum of a bank’s value building and delivery, elevating net yield, earnings per share and market value. It may be noted that AIES aided TCB that the cost per transaction of a full service branch in a country like USA is $ 1.07, compared to 54 cents for telephone banking; 27 cents for Automatic Teller Machine (ATM) banking; and 1.5 cents for internet banking, saving? costs of nearly $ 1.05 cents per transaction. This 98% cost saving elevates a bank’s profitability by 63%.

There are a number of benefits of TCB powered e-banking for business houses, involving lower costs to access and use banking services. Anchoring the Islamic Banks on TCB makes it possible to link critical banking subsystems to service delivery network. This allows the customers and depositors to access banking information from remote locations or their own workstations, promoting decision making efficiency and building value.?

CCB and TCB aided by AIES magnifies the abilities to monitor behaviour of accounts, improving investment decisions, accentuating the abilities to invest surplus cash in projects, commercial papers, bonds etc and profits profits of an Islamic Bank’s clients, depositors and its own.