E-WOM INFLUENCE ON ACTUAL SAVING BEHAVIOR AT BSI WITH INTEREST AND TRUST MEDIATION

The existence of Islamic banking in Indonesia is driven by the desire of the people of Indonesia, especially the Muslims who believe that interest is haram. However, the actual principle of sharing in financial institutions has been widely recognized both in the Islamic and non-Islamic countries. During its development, the Islamic banking industry continue to fluctuate in line with the economic situation that occurred. Such as the global financial crisis of 2008, which adversely affected the economy of Indonesia. However, Islamic banking has the durability and good performance. This research analyzes the market structure and performance of the Islamic banking industry in Indonesia. From the research found that the structure of the Islamic banking market in Indonesia led to an oligopoly market structure type 1. In addition a variable structure, market share, FDR and positive influence on the performance of assets, while the NPF negatively affect the performance of the Islamic banking industry in Indonesia. This study suggests necessary regulatory implementation of Islamic banking and Islamic principles consistent run, that will create healthy competition in Islamic banking industry in Indonesia. In addition, Islamic banking needs to continue to improve efficiency in its operations, so that the performance of the industry will remain intact. Keywords: structure, performance, Islamic banking industry.

Bank Margin Determination: A Comparison Between Islamic and Conventional Banks in Indonesia

PurposeThe purpose of this paper is to examine the relationship between Islamic bank margin (BM) and its determinants. It also compares the BM behavior of Islamic and conventional banks in the Indonesian dual banking system.Design/methodology/approachThe paper employs a time series approach under the dealership framework of Ho and Saunders. The autoregressive distributed lag model is used to inspect cointegration between BM and its determinants for the period of January 1996 to February 2006 of five sample banks (two Islamic banks and three conventional banks).FindingsThe result confirms that there exists a long‐running relationship between the Islamic BM and its determinants. In particular, as interest rate volatility increases, Islamic BM responds negatively while that of conventional banks responds positively. The findings differ from most of the other studies as they found a positive relationship between BM and interest rate volatility. This paper also shows that the margin behavior changes as the basis of bank operations changes from conventional to Islamic principles.Research limitations/implicationsThe paper uses a relatively small sample of three (out of 150) conventional banks as a comparison to two sample Islamic banks. However, as they come from the same peer with the Islamic banks, it is believed that the finding is valid. Islamic banks in Indonesia are not remote from the interest rate volatility in their presence under a dual banking system. It is the displaced commercial risk that threatens Islamic banking profitability in a changing market interest rate situation.Practical implicationsUnder a dual banking system, the stability of interest rates and the financial system is of great importance for the policy maker in developing the Islamic banking industry in Indonesia. As long as the BM is still a major source of income to the Islamic banks, it is necessary for Islamic banks to have prudent risk management to mitigate the negative effect of displaced commercial risk and maintain its profitability. Implementation of profit equalization reserves concept is a possible measure for Islamic banks to shield their operation.Originality/valueThis paper is believed to be the first study on Islamic BM behavior in Indonesia. It is expected to provide useful information for policy makers and Islamic bank management to develop a sound and profitable Islamic banking industry in Indonesia.

Various literatures mention that an increasingly concentrated market will have an impact on performance. This study aims to analyze the influence of market structure on the profitability of the Islamic banking industry in Indonesia, especially after the enactment of the Islamic banking act. This research used panel regression with random effect model. The result shows that market structure - proxies by market share (MS) and concentration ratio (CR4)- does not affect profitability of the Indonesian Islamic banking industry. This result implies that the performance of the Islamic banking industry in Indonesia is not supported by the traditional hypothesis and the efficient structures hypothesis. However, this research indicates that there is no collusive behavior in the Islamic banking industry in Indonesia. Meanwhile, for control variables such as liquidity ratio, default rate, and operational efficiency ratio have been found to have adverse effect on the performance of the Islamic banking industry in Indonesia.

The purpose in this study is to determine and analyze the market structure of the Islamic banking industry in Indonesia according to the Panzar-Rosse model and the level of competition between Islamic banking industry in Indonesia. To find out the market structure of the islamic banking industry it must be analyzed the effect of EAR, NPF, BOPO, FAR, FS, PL, PFF, PCE on the performance of Islamic banking as measured by ROA. The data used to answer and achieve these objectives is used secondary data from Islamic banks in Indonesia which has the largest asset ratings for a period of 6 years using the selected panel data method on the basis of Tests. The analysis model related to market structure uses the Panzar-Rosse model by looking for the H-statistic value and identified the Islamic banking equilibrium test on the panel data model of the performance of bank in Indonesia. This study found that the performance of Islamic banking measured by ROA simultaneously affected EAR, NPF, BOPO, FAR and FS and Panzar-Rosse approach will produce H-Stat value which is the sum of three main coefficients ofbanking inputs (labor, capital and funds). With H-Stat valued at 0.735 can be concludedthat the islamic banking industry in indonesia into the category of monopolistic market.The levels of the Islamic banking industry of Bank BNI, Bank BRI, Bank Panin and Bank Bukopin are monopolistic market while Bank Muamalat and Bank Mandiri are directed towards a joint monopoly market in the position of long-term equilibrium.

This research aims to take a deeper look at the impact of problems that arise in the period 2021 to 2023 on the performance of the Islamic banking industry in Indonesia. This study employs a qualitative methodology, including literature review and the Structure Conduct Performance (SCP) approach which is used specifically in industry performance. The findings are that Islamic commercial banks, especially the government-owned Bank Syariah Indonesia, dominate the Islamic commercial bank market in Indonesia followed by regional and commercial Islamic commercial banks. The dominance of government-owned Bank Syariah Indonesia is very evident from its market share and asset value. Almost half of the market share of Islamic banks in Indonesia is taken by Bank Syariah Indonesia. And of the thirteen Islamic commercial banks in Indonesia, only two Islamic commercial banks have poor performance. The practical implications are conducting the analysis performance of Islamic Banking Industry in Indonesia through SCP. The value of this research is the oligopolistic nature of the Islamic banking industry makes the development of the Islamic banking industry rather difficult compared to traditional banks

The purpose of this research was to analyse the influence of internal and macroeconomic variables on the profitability of the Islamic banking industry in Indonesia. A panel data regression approach, applying fixed effect and common effect models in order to to address potential biases in the estimation was used. The research sample consisted of five Islamic banks and covered the period from Q1 to Q4 of 2022. Chow test and Lagrange multiplier test were used to compare the analysis results. The used control variables included financing quality, financing to deposit ratio, exchange rate, and gross domestic product growth. The research was also based on economic, efficiency, and productivity theories in Islamic banking. Findings, The research results showed that the Islamic banking industry in Indonesia was increasingly compliant with prevailing regulations. The Bank Indonesia's policy interest rate (BI rate) did not significantly influence the profitability. Inflation had a negative impact on profitability, while the capital adequacy ratio showed a non-linear effect. All tested control variables exhibited an influence on profitability. Financing quality and exchange rate had negative impacts, while liquidity and economic growth had positive impacts on the profitability of the Islamic banking industry in Indonesia. The novelty of the paper is visible in the panel data regression approach that uses fixed effect and common effect models and provides an effective way to address estimation bias. Additionally, this research identified control variables that have a significant impact on profitability, including financing quality, liquidity, exchange rate, economic growth, and capital adequacy ratio to present breakthroughs and innovations.

The crisis in 2007 which originates from the state of the united states have an impact on the banking sector in indonesia . Banking is the financial sector that is not in spite of the impact of the financial crisis global. In october 2009, three general bank conventional namely bank mandiri, bank negara indonesia, and bank rakyat indonesia liquidity assistance asked of each government 5 trillion rupiah (bank indonesia , 2009 ) In contrast to general sharia-based bank, during the period of the crisis can still show a business activity is better. The role of a syariah banking continued to increase it looks from the association of community funds that continue to increase from 2007 until years 2013. The condition of islamic banking industry in indonesia seen from the growth of third party funds, market share to the total third party funds indonesian banking, the performance of return on assets, office network development, and the number of workers kerjasudah fairly stable from the period 2007 to 2013 period . The development of syariah banking industry it can ’t be good , there is still seen the gap between structural of syariah bank , where 2 bank controls more than 20 percent market share of total share of the third party funds syariah banking overall. The purpose of this research is analyzing the structure of the market in islamic banking industry in indonesia, analyse the influence on the performance of syariah bank market structure, and analyze the influence of behavior on the performance of syariah bank market in indonesia 2011-2014 year. The analysis used in this research is a method of data panel with simultaneous equations. This research result indicates that islamic banking industry in indonesia oligopoli presently, simultaneously the structure of markets influences behavior and conduct market effect on the performance of syariah bank market in indonesia 2011-2014 in the period .

This chapter attempts to find the ideal reserve requirement–financing to deposit ratio (RR-FDR) ratio for Islamic banking industry in Indonesia by deriving the ideal quantitative formula of the ideal RR-FDR and conducting simulations to identify its impact to each Islamic bank. Simulations on the financial ratios related to calculating RR-FDR are conducted based on the bank profit maximization model and the bank balance sheet approach. The results find that FDR is suggested to be between 77 and 109 % with 5 % RR. However, the liquidity reserve position of each Islamic bank shows that there are five Islamic banks having a minimum liquidity reserve (less than 5 % RR) and seven Islamic banks having a minimum liquidity reserve (less than 8 % RR). It means Islamic banking industry in Indonesia does not have enough liquidity reserves to mitigate both short-term and long-term liquidity mismatches leading to liquidity pressures. Hence, the regulator is suggested to consider such an optimal FDR-RR in Islamic banking industry for an effective implementation of the macroprudential policies.

Abstract. Introduction. The indicator in the assessment of banking performance is the bank's ability to generate profits or profitability. Profitability is the bank's ability to generate profits from its capital and assets. The level of effectiveness of the bank in seeking or earning a profit can be seen from the income of an investment obtained from the sale or the banks' performance to earn a profit by measuring the level of profitability ratios in seeking profit. Purpose. This study aims to analyze the performance of Islamic banking in terms of profitability and the influence of Bank Size, Operational Efficiency, Market Share, Liquidity, Liquidity Risk, Net Operation Margin, and Giro Wajib Minimum on Profitability Islamic Banking Industry in Indonesia during the 2015-2020 period. Results. (1)The majority of banks have a low ROE value which means that most Islamic banks in Indonesia have low profitability (2) The size of Islamic banking and Operational Efficiency has a negative and significant effect on the profitability of Islamic banking (3) Market Share, Liquidity, Liquidity Risk and minimum statutory reserves positive and significant effect on profitability (3) Net Operation Margin has a positive and insignificant effect on the profitability of Islamic banking. Conclusions. Bank size, operational efficiency, market share, liquidity, liquidity risk, net operation margin, a minimum statutory reserve has a significant effect on the profitability of the Islamic banking industry in Indonesia. Liquidity, liquidity risk, net operation margin, statutory reserves have positive effects on the profitability of the Islamic banking industry in Indonesia.

Purpose This study aims to investigate the behavioral aspects of Indonesian Muslims that hinder them from switching from conventional to Islamic banks, leading to a low market share of the Islamic banking industry in Indonesia. Design/methodology/approach This study used a quasi-experimental design with a full factorial 2 × 2 between-subjects setup with three scenario-based treatments (operational, income and legal perception) to test the robustness of heuristic decision-making patterns. A total of 320 participants from Islamic and conventional bank customers in Indonesia took part in the experiment. Data analyzed using a one-sample t-test and descriptive statistical comparison to examine heuristic-based behavioral differences across treatments. Findings The empirical results reveal that Indonesian Muslims consistently rely on heuristic reasoning when evaluating banking options. Initial beliefs strongly shape responses to new information, leading to overreaction to belief-consistent information and underreaction to contradictory information. Although switching behavior toward Islamic banks is evident, many consumers continue to maintain accounts in conventional banks due to religious norms, emotional aversion to riba, limited Islamic financial literacy, and institutional constraints such as payroll systems, resulting in a stagnant Islamic banking market share. Sensitivity testing further shows that respondents reacted most strongly when the statement “trade is the same as usury” was framed in legal or Sharia terms, highlighting the dominant influence of the religious status of riba. Practical implications This study implies that Islamic banks should adopt communication strategies that address belief misperceptions of “trade equals riba” by applying cognitive framing, segment marketing based on consumers’ heuristic responses and collaborate with institutions to reduce structural dependence on conventional banks. Originality/value This study is the first to investigate the behavioral aspect that explains the stagnancy of the Islamic banking industry in Indonesia using a theory-driven conceptual framework. In addition, this study simultaneously applies the heuristic theory of representativeness and anchoring adjustment.

The Islamic banking sector is a fundamental pillar in shaping the trajectory of Indonesia's Islamic industry, fostering sustainable economic growth. As a financial institution, it facilitates capital flows and significantly contributes to national economic growth. This study aims to analyze strategies for the development of Islamic banking in Indonesia using the ANP method, addressing the research gap on this topic and responding to the urgent need for strategies to enhance the Islamic banking industry in Indonesia. This research uses the Analytic Network Process (ANP) method, which is based on three basic principles: complexity structuring, measurement, and synthesis. The results of this study can be concluded that the strategy of accelerating the development of the Islamic banking industry in Indonesia using the ANP method, focusing on the problems of human resources, regulation, product innovation, and low public literacy. The main strategies include increasing Islamic banking literacy, developing the quality of human resources and infrastructure, and diversifying products according to market needs. Policy recommendations include comprehensive training for human resources, coordination of regulatory institutions, digital product innovation, and public education on the advantages of Islamic banking.

Indonesia is the most populous Muslim country in the world. Taking into account also its endowment and potential economic resources, the Islamic banking industry in Indonesia was expected to take on an important role in facilitating more financial resources and to contribute to the internationalization of the Islamic mode of financing particularly in the Asia-Pacific region. However, the reality is far from the expectation. This book aims to clarify the causes and fundamental constraints leading to the extraordinarily low level of Indonesia’s Islamic financial deepening. The authors draw on the traditions of Institutional Economics which are concerned with the rules or mechanisms of creating the 'incentive' and 'threat' for economic players because the rules (institutions) would matter as the determinant for economic development and economic efficiency. This book offers a fairly new analytical lens by hypothesizing that Islamic banks must earn additional profit– the authors coined as ‘Islamic bank rent’ - to maintain their franchise value as prudent Shari’ah-compliant lenders when compared to conventional banks. The authors argued that insufficient provision of the Islamic bank rent opportunity may have caused the Indonesia’s Islamic banks the opportunity to learn and improve their skill and capacity for the credit risk management. The book also offers evidence in support of implementing economic and affirmative policy necessary for incubating and developing the Islamic banking industry in Indonesia and making Indonesia an international Islamic financial hub in the Asia-Pacific region. This book will be a useful resource for policy makers and researchers interested in Islamic banking in Indonesia.

This study discusses the market structure, conduct, performance (SPK) Islamic banking industry as well as the enforceability SPK Islamic banking industry. Variables include the study of concentration, market share, advertising intensity, the level of financing, financing problems, capital intensity, and the performance of the Islamic banking industry include profitability and operational efficiency, as well as variable dummy macro economic conditions. Source data from the financial statements of Islamic banking, and financial statements of four foreign Islamic banks, namely Bank Syariah Mandiri, Bank Muamalat Indonesia, Bank Mega Sraiah, and BNI Syariah. The technique of multiple regression analysis using panel data. The results showed that the market structure of the Islamic banking industry is an oligopoly 2005-2014 period. But in the meantime, there has been a change in the structure of the full oligopoly (2005-2008), a tight oligopoly (2009-2012) and became a monopolistic competition (2013-2014) due to the emergence of new Islamic banks in 2010 up to 2015 amounted to Islamic banks 12. Determinants of real influence on the market share structure is variable and intensity behavioral advertising. Advertising will increase the intensity and the concentration of market share. Perikalanan intensity intensive Islamic banks classified about 25 percent. That is about a quarter of the income allocated to the cost of promotion and advertising. Advertising intensity can improve the structure and market share. Advertising determinants that influence the behavior of Islamic banks is capital intensity, market share, concentration and interaction of market share, expansion financing and capital intensity. SCP variable relationships in the study of Islamic banking industry in Indonesia were tested empirically is the hypothesis of efficiency. Profit performance of the banking industry was not caused by the structure of sharia concentrated or collusion of the oligopoly but because of its efficiency. Keywords: concentration, market share, promotion intensity, profitability.

The purpose of this study is to search for and find a model for developing human resources competencies based on Islamic values in Islamic banking in Indonesia. The study was a descriptive-analytical study with a normative juridical approach by using library research. The findings in this study are the human resources competency development model based on Islamic values in Islamic banking in Indonesia is to use the concept of professional qualifications and employment in the Islamic banking financial industry with the criteria and concepts of having hard & soft skills competencies, including honest, transparency, trustworthy, and personal development based on worship, faith, science, charity, and missionary endeavor.