When banks introduced Tawarruq to help people increase their money, Shariah scholars did not approve it in the beginning.

The reason behind their disapproval, 28-year-old Al-Zaidi said, was because customers approach it knowing 100 percent they will lose.

“But because some people are desperate and need the money, they go through Tawarruq and end up doing exactly what non-Islamic banks do with interest,” he said.

Banks in Saudi Arabia tried to get around it and succeeded to get the approval from the religious Shariah scholars and made it halal through using a broker.

This way however, the risk of loss will increase, Al-Zaidi said, when banks sell the product to the customer then do not get involved in the reselling leading customers to unsuccessful sell due to their limited expertise in the field of trading commodities.

Through his PhD study Al-Zaidi, investigated how Tawarruq is becoming more popular among people as a way to increasing their income to get married or pay dept.

Tawarruq refers to a customer who needs money and buys something with credit from the bank on a deferred payment basis and then resells it for cash to a third party without taking an interest-based loan.

What makes Tawarruq appealing, he added, is that this process replaces interest-based loan in conventional banks.

However, Al-Zaidi said, many Islamic banks in Saudi Arabia or abroad until now had failed to provide Tawarruq in a 100 percent halal way that is Shariah-compliant.

“Despite having religious committees, for example, in Saudi Arabia to supervise and monitor the process, many banks do not meet three important criteria to make it purely halal,” he said making this his focus of study.

First, customers do not sell by themselves and if they do so they approach an unfair market because of their lack of expertise.

Second, customers do not enter the process of Tawarruq with 100 percent chance of loosing money. Third, banks resell to the original owner or help to be resold to the original owner by external brokers.

Al-Zaidi added: “It was hence that he decided to design and program two tools (or software) that would allow people to increase their income via Tawarruq with knowledge before considering a certain product to buy, and to make it as much halal as possible."

The first tool is titled “Equation discovery for financial forecasting,” which gives the consumer an idea of the price history of each product, and a close estimate expectation of tomorrow’s price for all products, and inform the consumer which product has the potentially obtaining the highest profit.

“When people do not know enough about these products they are about to buy and just ask randomly or depend on one of the employees’ suggestion, they will definitely lose, and this is what happens,” he said.

The second tool is titled (Smart Tawarruq Market), which creates an artificial intelligent virtual agent to present the consumer, retailer, and the bank online in which the virtual agent works on their behalf (as a legal agent) following certain strategy each individual set.

This agent, he added, meet his/her owner’s requirements according to the budget set.

It will negotiate with the bank and make the deal, after that find the best deal to sell and negotiate and then end the deal.

Customers will be able to control and communicate their virtual agent via mobile texting or through it the freedom to find the best deal.

With these new tools, customers will have the knowledge and the expertise to resell their products in the best price possible without the bank interfering or influence, he said.

When Al-Zaidi presented his study at the recent World Islamic Finance conference in London in March, he received concerns from religious Shariah scholars that these tools over time would eliminate their role in these banks.

“I assured them, however, that these tools would only work for Tawarruq and to save time for both, the loaner, and retailer. The religious Shariah committees would continue to supervise this process and any other transactions happening in the bank,” he said.

Being a new project, Al-Zaidi was hoping to give its originality to his country and implement it in Saudi Arabia, however he was disappointed that banks were not willing to cooperate. Only one bank showed interest after the London conference, but before that they all refused to provide me with data or allow me to implement it in their system because it is a new idea, he said.

Meanwhile, with the growing interest in this field, the computer science department in the University of York is now planning to start a research group to study and apply advance technologies for Islamic banking systems.

In addition, Al-Zaidi said, for around six months he was trying to contact Shariah religious committees at Saudi banks to ensure his tools are Shariah compliant and got an offer from only one bank in Riyadh to visit.

When he went there with his supervisor, the Sheikh who is head of the committee apologized and refused to meet them. Later on he learned that it was because the Sheikh was not fully aware of technology and feared he would provide Al-Zaidi with inaccurate information.

“If we want to move forward, technology has to be taken more seriously and it will really make our lives easier as students if we manage to get more support from back home,” said Al-Zaidi.