Page 63 - CMA Journal (Mar-Apr 2025)

Focus Section

a) Role of the Shariah Board - Each
Islamic bank or fintech platform is
overseen by a Shariah Supervisory
Board (SSB)—a panel of scholars
trained in both Islamic
jurisprudence and finance. Their
responsibilities include approving
products and contracts, issuing
fatwas, monitoring operations, and
ensuring consistent compliance
with Islamic principles. Their role
reassures customers that their
financial dealings remain halal.

b) Shariah Audit - A Shariah audit
examines whether an institution’s
operations align with Islamic
guidelines. It includes reviewing
documents and contracts,
interviewing staff, testing transaction samples,
assessing communications, tracking follow-up on
b) Increased Use of Technology in Compliance -
prior audits, and identifying areas for improvement.
Regulatory technology and AI-powered audits can
streamline compliance and enhance risk detection.
c) Shariah Compliance Framework - Annual audits
are not enough. Islamic banks require robust internal c) Training and Education Programs - More initiatives
systems—dedicated Shariah compliance will train scholars in technology and tech
departments, regular internal reviews, staff training professionals in Islamic finance—closing the
in Islamic principles, embedded compliance checks knowledge gap.
in operations, and ongoing consultation with the
d) Oversight and Accountability - As the industry
Shariah Board. This approach integrates Shariah
matures, regulators are expected to demand higher
values into the institution's core practices—not just
levels of transparency and accountability.
its image.
Conclusion
d) Key Obstacles to Shariah Compliance - Despite
best intentions, financial institutions face ongoing More than merely a change in instruments, Islamic digital
obstacles. There is no universal standard— banking and Fintech signify a revolutionary shift toward
interpretations of Shariah may differ by region or moral, inclusive, and faith-based finance in the
scholar. There is also a shortage of trained Shariah twenty-first century. While adhering to its spiritual
auditors, while the demand for Islamic finance foundations, this new era of finance has the ability to
experts continues to rise. Emerging fintech tools democratize wealth, empower small enterprises, and
bring new ethical challenges. And finding the enhance communities by fusing the inventive power of
balance between compliance and competitiveness technology with the moral compass of Shariah.
remains difficult. Overcoming these issues is vital for
developing a mature and trusted Islamic finance As we look to the future, there will be difficulties along
sector. the way. But with honesty, creativity, and wise leadership,
Islamic Fintech has the potential to revolutionize the
Future of Islamic Digital Finance financial industry—not only for Muslims, but for
everybody looking for justice and morality in the sector.
Momentum is building. In the coming years, we can
About the Author: The author is a Fellow member of ICMA Pakistan
anticipate:
and is currently serving as the CEO of AFFAN AFZAAL & CO, a
consultancy providing audit services for the construction, public,
a) Global Standardization of Shariah Rulings -
private, health, and education sectors. The firm also offers tax
Efforts are underway to align Shariah interpretations advisory, corporate support, accounting, software development,
and establish global benchmarks, enabling fintech and financial management services. Additionally, the author is a
firms to scale more easily across borders. resource person and trainer at the Pakistan Audit and Accounts
Academy in Lahore.

ICMA’s Chartered Management Accountant, Mar-Apr 2025 61