The PMA Governor Participates in the AAOIFI-IsDB 20th – Annual Islamic Banking and Finance Conference on Islamic Finance in the Era of Artificial Intelligence

Bahrain – His Excellency Mr. Yahya Shunnar, the PMA Governor, participated in the 20th Annual Islamic Banking and Finance Conference organized by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in collaboration with the Islamic Development Bank (IsDB). The conference was held in the Kingdom of Bahrain under the theme: “Islamic Finance in the Era of Artificial Intelligence: Present Potentials and Future Prospects.” The event was attended by senior officials, experts, and thought leaders in the Islamic finance industry, including H.E. Shaikh Ebrahim Bin Khalifa Al-Khalifa, Chairman, AAOIFI Board of Trustees; H.E. Dr. Sami Al-Suwailem, Acting Director General of the IsDB Institute; a number of central bank governors; heads of Shariah boards; and representatives of international financial institutions.

In the opening session of the conference, His Excellency Governor Shunnar delivered a speech emphasizing the significance of holding this conference at a pivotal moment in the history of the Islamic finance industry—a period where the authenticity of its principles intersects with the rapid technological developments taking place globally. He highlighted that artificial intelligence presents a unique opportunity to enhance the efficiency of the Islamic finance industry and promote financial inclusion.

His Excellency also discussed the resilience of Islamic finance in the face of global crises, stressing that its success stems from its foundational principles based on real financing, risk-sharing, and avoidance of unproductive speculation.

In addition, He highlighted Palestine’s experience in this field, noting that Islamic banks and financial institutions continue to play a pivotal role in supporting the national economy and financing small and medium-sized enterprises, despite the challenges facing the country. He emphasized that this resilience stems from their commitment to the principles of justice and transparency, and to providing responsible Shariah-compliant financing, thereby contributing to the economic and social resilience of Palestinian families and enterprises.

Governor Shunnar noted that the artificial intelligence revolution represents both a challenge and an opportunity for Islamic financial institutions. He stressed the importance of adopting innovative technological solutions to enhance efficiency, transparency, and cost-effectiveness. He also called for expanding the role of Shariah supervisory boards to become active partners in shaping the digital transformation of the financial industry, and for strengthening collaboration between Shariah boards, developers, and technology experts to ensure the development of Shariah-compliant digital financial products.

The Governor praised the strategic partnership between the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Development Bank, highlighting their role in establishing the regulatory and conceptual frameworks for artificial intelligence in Islamic finance, as well as supporting innovative projects and modern financial technologies in member countries.

He further noted that the banking sector and Islamic financial institutions form part of a broader system supporting development in Palestine. He emphasized the importance of humanitarian, relief, and reconstruction efforts in the Gaza Strip following the recent conflict, stressing that rebuilding infrastructure and empowering affected families and communities is a national priority. These efforts require international solidarity and coordinated action by states and institutions to provide humanitarian aid and promote economic and social development, thereby ensuring societal stability and reinforcing the resilience of Palestinian citizens in the face of current challenges.

He also called for the conference’s recommendations to serve as an actionable roadmap for enhancing the role of the Islamic finance industry in driving sustainable financial innovation. He emphasized the importance of launching joint initiatives that bring together Shariah scholars, bankers, and technology experts to establish clear foundations for smart, responsible, and ethical finance.

In addition, His Excellency the PMA Governor chaired the fourth session of the conference, titled “Developing Entrepreneurship through Shariah-Compliant Financing for Micro, Small, and Medium Enterprises, and Establishing Integrated Value Chains and an Enabling Ecosystem.”

During the session, His Excellency the Governor highlighted that micro, small, and medium-sized enterprises (MSMEs) serve as a key driver of the economy and a major engine for growth and job creation, representing over 90% of businesses worldwide and providing approximately 70% of employment, according to reports by the International Finance Corporation (IFC).

Furthermore, the Governor highlighted Palestine’s experience in supporting this vital sector, noting that small and medium-sized enterprises (SMEs) constitute approximately 98.6% of the Palestinian economy and employ more than 80% of the workforce. He reviewed the efforts of the Palestinian government and the PMA in empowering this sector, including the launch of the “Istidama” Fund valued at USD 430 million, and the updating of regulatory instructions to encourage Islamic banks to finance key productive sectors such as agriculture, food industries, and renewable energy.

The Governor also emphasized the importance of diversifying Islamic financing instruments and developing innovative products, such as crowdfunding and individual financing, to expand access to finance. He called for raising awareness of Islamic finance and establishing partnerships between Islamic financial institutions and the public and private sectors to support entrepreneurship and achieve sustainable economic development.