Digital Transformation in the Light of Islamic Sharia Objectives: A Jurisprudential and Developmental Perspective Enhanced by the Experience of the Palestinian Islamic Bank

*Head of the Sharia Supervisory Board at the Palestinian Islamic Bank

General Introduction
It is well known that Islamic Sharia was not revealed to restrict the movement of life or hinder the wheel of progress, but rather to act as a guiding light for every human endeavor aimed at reconstruction and achieving public benefit. It is a divine law with a human purpose, a universal message, flexible in its means, and precise in its purposes. It has been characterized by its ability to absorb new developments and changes over the ages, through its ijtihadi tools and foundational controls, one of the most prominent of which is the concept of "masalih mursalah" (unfettered interests), which serve as a recognized entry point to adapt many contemporary innovations within the legal framework, provided they achieve a legitimate interest without conflicting with a definitive text.

In light of these overarching principles, we discuss digital transformation, which represents one of the most prominent features of the modern era, an effective means to achieve administrative and economic advancement, and a broad field for re-engineering institutional processes in a manner that serves humanity and achieves justice, efficiency, and quality. The question posed here is: How does Islamic law view this transformation? Does this rapid technological development conflict with the provisions of Sharia, or can it be integrated within its objectives? And how can Islamic institutions, led by banks, keep pace with this transformation in a disciplined manner that respects Sharia privacy? This is what we will attempt to address in this article while highlighting a pioneering experience in this field, that of the Palestinian Islamic Bank.

Digital Transformation as a Recognized Maslahah Mursalah
Digital transformation is a contemporary expression of the process of reconstructing and developing systems and processes using digital means to enhance efficiency, improve quality, reduce costs, and increase transparency. It falls within what the jurists term "masalih mursalah", meaning interests for which there is no specific text, but which achieve a confirmed benefit and do not conflict with the principles of Sharia. The original premise is that what does not have a text remains in its original permissiveness and permissibility, as long as it does not encompass a significant harm.

The majority of scholars have agreed on this principle, as Allah Almighty said: ﴿It is He who created for you all that is on the earth﴾, which clearly indicates that what is on earth is made for the benefit of humans. As He said: ﴿And He has made clear to you what He has forbidden you﴾, which shows that what is not explicitly forbidden remains in the realm of permissibility. Therefore, the use of digital means in managing institutions and providing services falls within this sphere as long as it is free of Sharia violations, and it may even rise to the level of necessity if the interests of people depend on it.

Compatibility of Digital Transformation with the Objectives of Islamic Sharia
Scholars of Sharia objectives have determined that Sharia aims to achieve interests, avert harms, ensure justice, protect rights, and organize life on principles of ease and mercy. When evaluating digital transformation through this framework, we find that it aids in achieving several major objectives of Sharia, the most important of which are alleviating hardship, facilitating ease, regulating transactions, protecting properties, and expanding the scope of social justice. Digitalization facilitates people's access to their rights, reduces human interventions that may lead to corruption or manipulation, and enables precise documentation, which is essential to justice.

Additionally, digital transformation enhances the preservation of wealth, which is one of the five necessities safeguarded by Sharia, through reducing waste, increasing efficiency, and achieving transparency in transactions, all of which support Sharia's stance in considering digitalization a legal and even commendable means.

Digital Transformation Between Permissibility and Necessity
In the past, digital transformation was seen as an option or an administrative luxury. Today, however, it has become a strategic necessity that cannot be ignored amid the changing times. Global experiences have shown that institutions that lagged in adopting digitalization faced declines in performance, efficiency, and public trust. With crises like the COVID-19 pandemic emerging, it became clear that digitalization is not a luxury but a means to preserve the continuity of services and safeguard public interests. Hence, the legal ruling may evolve from permissibility to recommendation or obligation if it pertains to public interests that can only be realized through it.

Practical Implications of Digital Transformation on Institutions and Society
On the institutional level, digital transformation has provided significant opportunities for developing administrative infrastructure, accelerating transactions, facilitating communication between departments, ensuring sound governance, and reducing reliance on paper, thus ensuring data preservation, accuracy, and recoverability at any time. It has also contributed to enhancing public trust due to the transparency of procedures and the speed of responses, as well as the documentation of transactions.

On the employee level, it has clarified tasks and responsibilities, motivated employees towards creativity, facilitated communication between various administrative levels, and developed technical skills that have become essential. On the societal level, digital transformation has led to faster and more efficient services, increased transparency, expanded community participation, and empowered citizens to interact with institutions through reliable electronic channels.

The Experience of the Palestinian Islamic Bank as a Pioneering Application Model
The Palestinian Islamic Bank represents an advanced model in employing digital transformation in the banking sector according to a balanced jurisprudential vision. The bank has worked to develop its services and products in compliance with Sharia conditions on one hand and technological changes on the other. This is evident through a range of carefully designed digital banking products, such as the "Tayseer Card," which is based on selling benefits, granting the customer access to a range of banking services and exclusive advantages, within clear Sharia constraints, without imposing any interest or late fees, instead allowing for the installment of due amounts in a manner compliant with Islamic rules.

The bank has also introduced a set of credit cards that operate using a unique formula combining murabaha (profit-sharing) and Ijarah (leasing of benefits) and undisclosed agency, where all stages of buying and selling occur electronically, via the customer entering the secure code, considered as an offer, and the bank's acceptance occurs through a documented electronic notification, which achieves one of the key pillars of contracting. The bank is committed to not imposing any late fees and providing accurate information prior to the purchase, making these products a model of Sharia compliance and technical flexibility.

Moreover, the Palestinian Islamic Bank is commendable for being proactive in enhancing cybersecurity and adopting advanced protection solutions to ensure the safety of customer data. It also places great importance on Sharia compliance through continuous coordination with the Sharia Supervisory Board and updating products to ensure their compatibility with the digital context and banking reality.

Addressing Digital Challenges Within the Framework of Sharia
Despite the apparent benefits of digital transformation, some challenges and concerns remain present, such as fears of cyber breaches, violations of data privacy, or delays in developing adequate Sharia-compliant alternatives. Yet, these challenges are manageable if institutional will, Sharia oversight, and technological safeguards are in place, through enhancing cybersecurity, enacting legislations that protect the rights of players, and building public awareness of safe usage culture. These challenges can also be leveraged to develop innovative Islamic financial solutions that meet emerging needs without violating Sharia provisions.

Balancing Interests and Harms According to Sharia Rules
Jurists have determined that averting harms takes precedence over acquiring benefits, provided that the harm is significant or equal to the benefit. However, if the benefit is significant and the harm is probable or minor, then the preference is for the interest. This applies to digital transformation, where the benefits are clear in facilitating people's lives, easing their transactions, and enhancing the integrity of institutions, while the potential harms can be controlled and mitigated without negating the principle of permissibility. This is supported by what Imam Al-Izz ibn Abd al-Salam stated, that if the benefit outweighs, it is relied upon even if a minor harm arises from it, and if the harm outweighs, it is prohibited even if a benefit is lost due to it.

Conclusion and Recommendations
Digital transformation, with its developmental and empowering opportunities, today represents a fundamental pillar for achieving Sharia objectives concerning justice, ease, preservation of wealth, and regulation of transactions. It does not contradict Sharia but rather harmonizes with it when the controls and conditions are respected. The experience of the Palestinian Islamic Bank serves as a model to be emulated in this field, as it successfully combines technological innovation and Sharia compliance, affirming that digitalization is not limited to traditional institutions but can be a hallmark of excellence in contemporary Islamic work. Hence, the most important recommendation is the necessity of activating digitalization in Islamic institutions according to Sharia controls, allocating sufficient resources for cybersecurity, encouraging Sharia research in adapting digital products, and raising the level of services to match community trust and achieve the profound objectives of this eternal Sharia.