The integration ofShariahcompliance in information system of Islamic financial institutions

Purpose - The purpose of this study is to explore the integration ofShariahcompliance in the information system of Islamic financial institutions (IFIs) in the context of Malaysia. Design/methodology/approach - By applying qualitative approach in the form of in-depth/structured interview of qualified respondents within Islamic financial industries. Findings - The result of this study indicates that information system advancement will give an increasing level of competitive advantages. Also, the result indicates that the internal control and information system played a vital role in ensuring theShariahcompliance and translating and circulating theShariahguidelines among the IFIs’ departments and staffs. In terms ofShariahintegration in information system, there is a consideration during the development of an information system.Shariahwill be an element that needs to be accounted for to develop the information system for IFI. Research limitations/implications - This includes the scope of the study which is based on Malaysian Islamic banks only. Hence, future studies are recommended to extend this endeavor to other contexts as well. Furthermore, although the initial sample was covering nine IFIs, only two IFIs accepted to participate in the interview. It is suggested that the future studies involve more participants and apply different research techniques such as focus groups or questionnaire survey. Practical implications - Make sure employees who are in charge of performing any function related toShariah(i.e.Shariahreview,Shariahaudit,Shariahresearch,Shariahrisk management) have a basic knowledge on information technology (IT) and information system. Continuous trainings for IFIs’ employees covering the information system and internal control system issues related to theShariahcompliance. Focus on seminars and conferences on outstanding issues related to information system technology in IFIs. Promoting programs and subjects specialized in information system technology in IFIs. IFIs should allocate a budget for system development or enhancement in the financial budget ensuring that IT system is incorporated inShariahcompliance. IFIs should consider enhancement ofShariahcompliance encompass and the alignment into the IT system as continuous process, as well as one of their strategic plan aspects. Bank Negara Malaysia as a regulatory body of IFIs should emphasize on regulating theShariahaspects with regard to the IT system. Originality/value - This paper’s contributions lies in the enhancement of the development of theShariahcompliance literature, as well in the integration ofShariahcompliance and information system in IFIs.