Digital-first institutions are rapidly incorporating AI and other transformative tech into their Islamic banking practice.
Islamic banking is undergoing profound digital change, moving beyond traditional branch-based services to embrace cutting-edge technology, in the service of delivering highly personalized, sharia-compliant financial solutions.
Characterizing this wave of innovation, driven by banks like Boubyan in the Middle East and Kuveyt Turk in Western Europe, is the strategic adoption of AI, sophisticated mobile platforms, and streamlined digital-first products. These market leaders are not only modernizing their core systems but leveraging APIs and automation to provide their customers—particularly younger, digital-native generations—with an instant, secure, and comprehensive banking experience.
Middle East
Boubyan Bank
Boubyan Bank has moved swiftly to digitalize Islamic banking, with over 85% of its customers—predominantly under 30—now utilizing digital channels. The mobile app is their primary banking tool, handling approximately 99% of all financial transactions. The bank also offers specialized digital solutions for business customers, including ePay for business payment collection via SMS invoicing and QR code; and eRent, a real estate management system that automates rent collection and integrates with the online banking platform.
Driving Boubyan’s digital effort is a comprehensive technological transformation spanning over 80 initiatives, including modernization of the core banking system with Temenos, adoption of an API-driven integration approach with over 500 services, and utilization of business-process management tools and robotic process automation (RPA). It created the first development, security, and operations IT infrastructure for Islamic digital banking and has implemented an event-driven security framework for high-grade protection.
AI is another central area of innovation, powering Boubyan’s in-house-built digital assistant, Musaed, which it reports has achieved over 87% accuracy and significantly reduced training time by incorporating advanced machine learning models.
Boubyan’s mobile app provides a full digital banking experience with features like digital onboarding, instant transfers, and 24/7 access to Musaed. Last year, the bank introduced several market-leading services including Salary in Advance, a regional-first offering instant access to 60% of a customer’s salary before payday; and WAMD, an instant payment solution using only mobile numbers.
Other significant recent launches are the digital murabaha one-visit Service, a secure, sharia-compliant digital financing option that now handles over 80% of all murabaha requests; and the Easy Payment Plan, which allows credit card holders to pay for eligible purchases in interest-free installments.
Western Europe
Kuveyt Turk Katılım Bankası
Kuveyt Turk Katılım Bankası’s digitalized Islamic banking services include internet and mobile banking for easy account management, transfers, and bill payments. Customers can digitally open and manage participation accounts, apply for murabaha and other financing, and manage their credit and debit cards. Digital features include account opening; money transfers; card and loan applications; payments including bills, taxes, and fees; foreign trade transactions; and point-of-sale services.
Seeing digitalization as enhancing the customer experience, broadening access to Islamic banking, and strengthening its market leadership, Kuveyt Turk anticipates adding digital advisory services—personalized or AI supported—and digitized trade and supply chain transactions, in line with Islamic-finance principles. Recent enhancements to its mobile app include a new dashboard with neuroscience-validated design, quick transaction customization, balance visibility control, and integrated approvals.
