IT News Online – IsDBI Releases Report on Role of Artificial Intelligence in Strengthening Financial Inclusion
The Institute of the Islamic Development Bank (IsDBI) (www.ISDB.org) released a new report highlighting how Islamic finance and artificial intelligence can improve financial inclusion.
Entitled “Artificial Intelligence and Islamic Finance: A Catalyst for Financial Inclusion”, the report provides a comprehensive framework of Islamic finance for financial inclusion, identifies the main challenges hampering the adoption of artificial intelligence (AI) and recommends solutions to leverage Islamic finance using AI. to strengthen financial inclusion.
The report recommends a comprehensive solution for financing small and medium-sized enterprises with two pillars that provide easy access to capital in a more efficient manner.
The first pillar is to form a sustainable and inclusive framework consisting of a phased approach that maps the need of microentrepreneurs at different levels of business development to achieve financial inclusion. The proposed Islamic financial framework has the potential to build an inclusive national framework for access to finance, enabling all segments of society without increasing indebtedness.
The second pillar is to develop a financial infrastructure that recognizes access to capital as a need of the economy. Resilient infrastructure contributes to better and more efficient delivery of financial services. Infrastructure in this context relies on both physical and intellectual capacities.
The intellectual contribution of fintech may include better storage, rapid analysis and use of alternative data, and the application of AI for decision making.
The financial pillar aims to capture, store and make available all possible touchpoints necessary to reduce information asymmetry and increase access to capital.
Digital infrastructure is the most critical part of the overall financial infrastructure, especially as the inclusion of data leads to financial inclusion.
In his remarks on the publication of the report, Interim Director General of IsDBI and The Chief Economist of the IDB Group, Dr. Sami Al-Suwailem, said the report is timely as the COVID-19 pandemic causes severe economic disruption around the world.
He said: “The central message of the report is that Islamic finance, founded on a foundation of social and economic justice, when harnessed with AI and related technologies, can be a major driver of sustainable development through inclusive participation and risk sharing.
The report can be downloaded here: https://bit.ly/3x6vDfr
Distributed by APO Group on behalf of the Islamic Development Bank Group (IsDB Group).
About the Institute of the Islamic Development Bank (IsDBI):
The Islamic Development Bank Institute (IsDBI), formerly known as IIRF, is the knowledge beacon of the Islamic Development Bank Group. Guided by the principles of Islamic economics and finance, IsDBI is mandated to lead the development of innovative knowledge-based solutions to support the sustainable economic progress of 57 member countries and diverse Muslim communities around the world. In line with the IsDB Group’s ten-year strategy and the president’s five-year program, IsDBI functions as a catalyst for knowledge-based sustainable development.