Reading the concept of al-Gharar on the background of robo-advisory: one more step towards Halālan Ṭayyiban lifestyle

Khalq, Ashraful and Muhsin, Sayyed Mohamed and Mat Jubri@Shamsuddin, Mustafa (2021) Reading the concept of al-Gharar on the background of robo-advisory: one more step towards Halālan Ṭayyiban lifestyle. In: Virtual International Halal Science Conference 2021: "Enhancing and Strengthening Halal Industry through Science", July 13-14, Virtual.

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Abstract

This paper examines the potential role of the robo-advisory in mitigating the magnitude of al-Gharar from al-Gharar al-Fāḥish to al-Gharar al-Yasīr and hence to contribute to the Halālan Ṭayyiban lifestyle by increasing the larger domain of Sharīʿah compliant investment opportunities. Al-Gharar, literally means uncertainty, attributed mainly to the information asymmetry and the lack of expertise in dealing with the complex financial tools with considerable sensitivity to the internal and external shocks. As a result, the investors, especially laymen, fail to read the market trend and identify the quick response of the financial assets to the eco-political developments and hence encounter al-Gharar al-Fāḥish, which nullify the Sharīʿah compliance of the deal. Robo-advisory, a mechanical advisory that uses sophisticated analytical tools and algorithm to provide financial advice at a lower cost, brings down information asymmetry to a more significant extent and its affordability, along with easy accessibility, helps lay-investors to find good asset combination. Therefore, this article finds that robo-advisory, albeit its some shortcomings, will be a good solution in dealing with al-Gharar al-Fāhish, and it has good potential in serving the Halālan Ṭayyiban lifestyle.

Item Type:	Conference or Workshop Item (Plenary Papers)
Uncontrolled Keywords:	al-Gharar, robo advisory, information asymmetry, Halālan Ṭayyiban, Islamic Fintech
Subjects:	BPH Islamic Economics
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Islamic Revealed Knowledge and Human Sciences > Department of Fiqh and Usul al-Fiqh
Depositing User:	Dr. Sayyed Mohamed Muhsin
Date Deposited:	21 Sep 2021 07:38
Last Modified:	21 Sep 2021 07:38
URI:	http://irep.iium.edu.my/id/eprint/92216

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