A A Proposed Strategic Framework for Digital Transformation in Libyan Islamic Banks: Integrating Shari'ah Governance and Cybersecurity Requirements

Abstract

This study aims to develop a proposed strategic framework for digital transformation in Libyan Islamic banks by integrating the requirements of Shari'ah governance and cybersecurity in response to the rapid advancement of financial technology (FinTech). The research addresses the structural and operational challenges hindering digital transformation, including the continued reliance on traditional banking practices, regulatory shortcomings, and the absence of comprehensive strategic vision. Using a descriptive-analytical approach, the study examines the requirements of digital transformation and explores the role of modern digital technologies in enhancing operational efficiency, financial performance, risk management, and customer experience. The findings reveal that successful digital transformation extends beyond technological adoption and depends fundamentally on the implementation of a clear institutional strategy, effective digital Shari'ah governance, and a robust cybersecurity framework. The study further demonstrates that digital Shari'ah compliance requires governance mechanisms capable of ensuring that digital financial transactions conform to Islamic legal principles. In addition, cybersecurity is identified as a critical component for protecting banking assets and customer data while supporting the higher objectives (Maqāṣid al-Sharīʿah), particularly the preservation of wealth and privacy. The findings also emphasize the importance of continuous human capital development to equip employees with the competencies required for digital transformation.The study's primary contribution lies in proposing an integrated strategic framework that combines digital transformation, Shari'ah governance, and cybersecurity within the specific context of Libyan Islamic banks. Based on these findings, the study recommends adopting the proposed framework, modernizing the legal and regulatory environment, strengthening secure digital infrastructure, and investing in human capital to support sustainable digital transformation, financial inclusion, and long-term institutional resilience.

Keywords: Digital Transformation; Financial Technology (FinTech); Libyan Islamic Banks; Digital Shari'ah Governance; Cybersecurity