Digital Shariah Compliance Supervision on Stock Market: An Innovative Approach on Islamic Capital Market

Abstract

Shariah compliance supervision not only ensures adherence to Islamic principles but also safeguards the credibility and ethical foundations of the Islamic capital market. This paper evaluates the transformative potential of digital technologies in enhancing Shariah compliance supervision within stock markets, offering an innovative framework for the Islamic capital market. The study explores how digital tools, including blockchain, artificial intelligence, and real-time data analytics, can streamline compliance processes, reduce monitoring costs, and improve transparency for stakeholders. By examining current practices and their limitations, the research highlights how these technologies address inefficiencies in traditional Shariah supervisory mechanisms. Employing qualitative methodologies, this paper synthesises insights from industry reports, case studies, and regulatory developments to assess the impact of digital Shariah compliance solutions on market growth, investor trust, and operational efficiency. Key questions explored include: How can digital supervision enhance compliance accuracy and timeliness? What challenges do Islamic financial institutions face in integrating these technologies? Findings reveal that digital Shariah supervision not only aligns Islamic capital markets with modern financial innovations but also reinforces investor confidence by ensuring ethical transparency and accountability. Policy recommendations include fostering collaboration between fintech providers, Shariah scholars, and regulators to develop unified standards and scalable solutions. This study underscores the necessity of aligning Islamic finance principles with digital innovation to maintain relevance and competitiveness in a rapidly evolving financial landscape. By addressing these critical dimensions, the paper contributes actionable insights for advancing the role of digital technologies in promoting a resilient and ethical Islamic capital market.