Indonesian Banking Sector Research Articles

Pengaruh Orientasi Pelanggan, Kepuasan Pelanggan, Kualitas Pelayanan Terhadap Loyalitas Pelanggan Mobile Banking Wilayah Jabodetabek

The rapid growth of the banking sector in Indonesia encourages intense competition between financial institutions. In this effort, banks must provide the best service (service excellent) to win the increasingly fierce competition. Therefore, improving service quality is crucial for banks to continue to compete and survive in this competitive banking industry. Providing superior banking services is the main key to ensuring the success of the mobile banking platform and meeting customer needs properly. This study aims to explore the effect of customer orientation, service quality, and customer satisfaction, on customer loyalty for mobile banking customers in JABODETABEK. This research is a quantitative study that uses a purposive sampling method and involves 188 female mobile banking users in JABODETABEK Indonesia. The results showed that the biggest influence, namely customer orientation, had a significant effect on customer satisfaction. Customer orientation affects service quality. Service quality has a positive effect on customer loyalty. Customer satisfaction has a positive effect on customer loyalty. Service quality does not affect customer satisfaction. The next result is that service quality does not mediate customer orientation and customer satisfaction. Customer satisfaction does not mediate service quality and customer loyalty. Future research is expected to use more specific respondents with different measurement techniques. Banks need to ensure that the mobile banking services provided achieve high-quality standards, including speed, reliability, security, and ease of use.

Determinan Profitabilitas pada Bank Konvensional di Indonesia

Increased economic growth in Indonesia is not always accompanied by increased profitability in the banking sector in Indonesia, this can be caused by various factors. This survey aims to provide the effect of non-performing financing, liquidity, and BOPO on profitability. The sample of this study is 204 data points from 72 conventional banks listed on the IDX and official banking websites during the period 2020 - 2022, through the purposive sampling method. Descriptive with a quantitative approach is the type of method used. Multiple linear regression analysis using the test tool, SPSS 18, is a technique that is applied in analysis. This study’s findings suggest that partially the LDR variable shows a positive as well as significant effect on profitability in conventional banks in Indonesia. Meanwhile, partially the NPL and BOPO variables shows a negative as well as significant effect for profitability in conventional banks in Indonesia. The effect of independent variables, according to the coefficient of determination of 82.8% can affect ROA, while the other 17.2% is influenced variables outside the research model.

Digital Banking Transformation AI Enhances Efficiency And Customer Experience Seminar Perspective Industry

This study examines the transformative impact of artificial intelligence (AI) on operational efficiency in the Indonesian banking sector. It investigates how AI technologies enhance responsiveness to customer inquiries, streamline service processes, and improve overall customer satisfaction. Using a qualitative approach, the research integrates literature reviews, in-depth interviews, and case studies to comprehensively analyze AI adoption and its implications. The findings demonstrate that AI implementation not only boosts operational efficiency but also facilitates personalized customer service through advanced data analytics and AI-driven automation. The study emphasizes the importance of transparent AI algorithms and robust data protection measures to address ethical considerations and ensure adherence to Sharia principles. Insights from leading banks such as Bank Mandiri and Bank BRI highlight substantial reductions in operational costs and enhanced service capabilities following AI integration. This research contributes to a deeper understanding of AI's role in shaping contemporary banking services and provides strategic recommendations for optimizing AI applications in Indonesian banks.

The Effect of Islamic Financial Socialization and Education on Public Interest in Using Islamic Banking Services

This study used SPSS analysis tool to investigate the effect of Islamic financial socialization and education on public interest in using Islamic banking services, involving a sample of 66 respondents in two major cities in Indonesia. A survey method with a questionnaire was used to collect data, which was then statistically analyzed using SPSS. The results of data analysis showed that Islamic financial socialization and education had a significant positive impact on increasing public interest in Islamic banking services. This finding confirms that an effective educational approach in improving the understanding of Islamic finance principles, such as profit-sharing and the prohibition of riba (interest), plays an important role in supporting the growth of the Islamic banking sector in Indonesia. Consequently, Islamic banks and financial institutions need to continuously improve their Islamic financial socialization and education strategies to expand people's access to religiously-compliant financial services and to strengthen sustainable financial inclusion in the country. This study aims to explore the effect of Islamic financial socialization and education on people's interest in using Islamic banking services, using SPSS analysis tools and involving a sample of 66 respondents in two major cities in Indonesia. A questionnaire survey method was used to collect data covering respondents' perceptions and level of understanding of Islamic finance concepts. The collected data were then statistically analyzed using SPSS to evaluate the relationship between socialization and education variables with interest in using Islamic banking. The results showed that Islamic financial socialization and education had a significant impact on increasing public interest in Islamic banking services. More than 65% of respondents showed increased interest after being involved in the socialization and education program. This finding reinforces the importance of a comprehensive education strategy in explaining the principles of Islamic finance such as profit-sharing, prohibition of riba (interest), and transparency in financial practices. The implication of this study is the importance of Islamic banks and financial institutions to continue developing Islamic financial socialization and education programs as part of the effort to build public understanding and trust in Islamic financial products. This will not only support the growth of the Islamic banking sector in Indonesia, but also strengthen broader and more sustainable financial inclusion within it. As such, this study contributes to supporting sustainable economic development through the promotion and adoption of Islamic financial principles that are in line with religious values.

THE EFFECT OF NARROW MONEY (M1), BROAD MONEY (M2) AND EXCHANGE RATE ON PROFITABILITY OF KBMI 1 AND 2 BANKS

The aim of this research is to analyze the effect of narrow money (M1), broad money (M2) and exchange rates on the profitability of KBMI 1 and 2 banks. This research is quantitative research that relies on numerical data. This study is crucial to deliver valuable informations to investors and management of company. The method of data analysis in this paper is carried out quantitatively which will be measured using statistics through SPSS version 27. The data used in this study is secondary data from January 2018 - December 2023 at KBMI 1 and 2 banks. Based on this study, it can be summarized that M1 and M2 have significant effect to ROA for KBMI 1 Banks. Exchange rate has significant effect to ROA for KBMI 2 Banks. The monetary authority really needs to maintain economic stability by making good monetary policy. This will also have an impact on increasing profitability in the banking sector in Indonesia. The findings of this study can help investors, policy makers, and other stakeholders in making decision and improving the bank performance in the future. This study has several limitations, there’s no investigation further of Return on Asset of the other countries such as developing and developed countries. Researchers who want to conduct research with the same theme are expected to use other variables more specific to Return on Asset. It is hoped that further research will pay attention to other factors that can effect Return on Asset of banking companies.

Board gender diversity and cyber security disclosure in the Indonesian banking industry: a two-tier governance context

PurposeThis study aims to determine the effect of board gender diversity on cyber security disclosure (CSD) in the banking sector of Indonesia as a developing country that adheres to a two-tier system.Design/methodology/approachThis study uses a panel data of 47 banks listed on the Indonesia Stock Exchange from 2014 to 2021. The board gender diversity is measured by three proxies, the proportion of women on the board, BLAU Index value and the critical mass of women. The authors used generalized method of moments estimation to eliminate the simultaneous equation bias.FindingsThe results show that the women board of commissioners increases CSD, and the women of board of directors/top management team were significantly negative for CSD.Research limitations/implicationsFirst, this research was only conducted in the banking sector. The results cannot be generalized to non-financial companies. Second, there is no measurement of the quality of the board from the level of education, experience, expertise and other characteristics of diversity such as age, nationality and religion.Practical implicationsThe study has revealed the need for the government’s role in providing oversight of the presence of women on the board so that banks fully comply with Indonesia Financial Services Authority regulations. Banks should also actively launch policies regarding the presence of women on the board to give a positive effect to stakeholders that women play an important role in decision making. Banks must also adjust the composition of female commissioners with a threshold of two people to maximize their function as supervisors.Originality/valueThis is the first research conducted on the banking sector in Indonesia as a developing country that adheres to a two-tier system. The results of this study provide evidence that patriarchal culture is still dominant in Indonesia.

Analysis of the Effect of Return on Assets, Solvency, Liquidity, and Capital Adequacy Ratio on Company Value with Good Corporate Governance as a Moderation Variable in LQ45 Banking Companies Listed on the Indonesia Stock Exchange for the 2014-2022 Period

This study aims to gather empirical evidence regarding the impact of Return on Assets (ROA), Solvency, Liquidity, Capital Adequacy Ratio (CAR), and the Corporate Governance Perception Index (CGPI) as a moderating factor on the value of LQ45 Banking Companies listed on the Indonesia Stock Exchange. This research is crucial for understanding how financial metrics influence firm value in a key segment of the Indonesian banking sector. The sampling method employed was purposive sampling, resulting in a selection of four companies analyzed over the period from 2014 to 2022, totalling 36 units of analysis. A quantitative descriptive approach was adopted, utilizing the MRA absolute difference test to analyze the data. The findings indicate that ROA has a significant positive influence on firm value, emphasizing the importance of profitability in enhancing firm valuation. In contrast, Solvency, Liquidity, CAR, and CGPI do not exhibit a significant effect on firm value. Furthermore, CGPI does not moderate the impact of ROA, Solvency, Liquidity, and CAR on firm value. These results suggest that banking companies should prioritize improving profitability metrics like ROA to enhance their value. This study provides valuable insights for managers and stakeholders aiming to optimize firm performance in the Indonesian banking sector.

Influence of Intellectual Capital on Financial Performance in the Banking Sector in Indonesia

The aim of this research is to examine the influence of intellectual capital on the financial performance of banking companies which is moderated by good corporate governance. The method used in this research is multiple linear regression analysis with moderating variables using Moderated Regression Analysis (MRA). The population in this study was 45 banking companies. The banking sector is one of the sectors that bridges between people who have excess funds and people who need funds. Not only is the company's financial performance a reference for the company's success, but company resources can also provide increased financial performance for the company's sustainability. Intellectual capital is one of the factors that influences bank performance. The research results show that Intellectual Capital has a positive effect on financial performance and Good Corporate Governance. However, Good Corporate Governance does not moderate the relationship between Intellectual Capital and financial performance. These findings underscore the importance of Intellectual Capital in improving financial performance and Good Corporate Governance practices, but do not support the moderating role of Good Corporate Governance in this relationship.

Comparative Analysis of Value-at-Risk in Market Risk Prediction in Banks Using GARCH Volatility

This study aims to compare the disclosure of Value at Risk (VaR) in market risk prediction among banks in Indonesia. By employing comparative and analytical methods, this research examines the effectiveness of VaR disclosure as a market risk prediction tool. Through the evaluation of VaR models disclosed by Indonesian banks and their comparison to a parametric model using asymmetric GARCH volatility for Variance Covariance Value at Risk, this study identifies the extent to which VaR disclosure can be relied upon to predict market risk. This research contributes to the understanding of risk management practices in the Indonesian banking sector and offers recommendations for improving market risk prediction accuracy through more effective VaR disclosures.

Integrated Sustainability: Embedding Eco-Friendly Practices in Indonesia's Banking Sector

Integrated Sustainability: Embedding Eco-Friendly Practices in Indonesia's Banking Sector

ESG Framework Assessment in Green Finance: A Case Study of the Indonesian Banking Sector

ESG Framework Assessment in Green Finance: A Case Study of the Indonesian Banking Sector

THE INFLUENCE OF FINANCIAL TECHNOLOGY AND LIQUIDITY ON THE FINANCIAL PERFORMANCE OF BANKS IN INDONESIA

The purpose of this study is to evaluate how financial technology and liquidity levels affect the financial performance in conventional commercial banks in Indonesia that are listed in the Financial Services Authority. The research population includes conventional commercial banks listed on the Indonesia Stock Exchange from 2017 to 2023. The sampling technique is conducted through purposive sampling. The data analysis method uses panel data regression analysis. The data used are from 49 banks with a total of 176 financial reports, and hypothesis analysis is conducted using SPSS software. The research results indicate that financial technology has an impact on the financial performance of the banking sector in Indonesia, while liquidity levels also play a role in influencing the financial performance in the same banking sector.

The influence of banking liquidity risk on profitability: The moderating role of capital adequacy ratio

The decline in bank liquidity due to slowing economic growth in Indonesia has decreased bank profitability. COVID-19 and the increase in the number of non-performing loans increased the level of bank liquidity risk and decreased capital. Hence, the purpose of this study is to analyze the influence of banking liquidity risk on profitability in the Indonesian banking sector and to examine the role of capital adequacy ratio as a moderating variable. The method section explains panel data analysis using the random-effect model in analyzing the influence of liquidity risk on profitability and the role of capital adequacy ratio as a moderating variable. The results of the analysis show that liquidity risk has a significant positive influence on profitability at the 1% significance level. Moreover, the t-statistic value for capital adequacy ratio as a moderating variable is 2.59 at a 1% significance level. This result shows that the capital adequacy ratio can moderate the relationship between liquidity risk and profitability. Furthermore, the robustness test results show that the deposit risk ratio is a good indicator for estimating liquidity risk. In addition, this study is useful for the banking sector in managing its capital adequacy ratio and as a reference for the government in setting policies related to banking capital.

The Effect of Financial Statement Comparability on Risk in the Indonesian Banking Sector

The Effect of Financial Statement Comparability on Risk in the Indonesian Banking Sector

The Influence of Internal Control and Good Corporate Governance Implementation on Fraud Prevention

This research is motivated by the many cases of fraud in the banking sector in Indonesia. The results of the 2019 Indonesian Fraud Survey stated that the fraud that occurred was caused by internal control factors and the implementation of good corporate governance. This research aims to determine the influence of internal control and the implementation of good corporate governance on fraud prevention in general banking in The research method used in this research is the verification method. The population in this research are internal auditors who work at commercial banks in the Jakarta and Bandung areas. The sampling technique used was a probability sampling technique with a simple random sampling technique, and used the Slovin formula so that the total sample was 47 internal auditors in the Jakarta and Bandung areas The data analysis used is multiple linear regression analysis using the SPSS program. Research results Simultaneously, Internal Control and the implementation of Good Corporate Governance have an effect on fraud prevention. Partially, the implementation of internal control has an effect on fraud prevention. Partially, the implementation of good corporate governance has an effect on prevention

DIGITAL TRANSFORMATION AND STATE-OWNED BANK'S PERFORMANCE: THE MODERATING EFFECT OF RISK PREFERENCE

This study examines the impact of digital transformation on the financial performance of Indonesian state-owned banks, using risk preference as a moderating variable. The study utilizes data from the annual financial reports of Indonesian state-owned banks from 2019 to 2023. Digital transformation is measured through text mining of annual reports, bank performance is primarily indicated by Net Interest Margin (NIM), and risk preference is assessed using the Z-score. Given the presence of autocorrelation in the fixed effects model, the Generalized Method of Moments (GMM) is employed. The results reveal that digital transformation does not directly affect bank performance. However, this relationship is significantly moderated by the banks' risk preferences. Banks with higher risk preference tend to leverage digital transformation more effectively, resulting in increased profitability and higher risks. Conversely, banks with lower risk preferences adopt digital technologies more cautiously, achieving steadier but potentially lower gains. These findings offer valuable insights for policymakers and bank managers in the Indonesian banking sector, emphasizing balancing technological advancements with risk management to maintain financial stability. This study highlights the crucial role of digital transformation in enhancing bank performance when aligned with risk management strategies and contributes to the understanding of the complex relationship between digital transformation, risk preference, and bank performance in emerging economies, particularly in the context of state-owned banks.

A study on Overseas Chinese bank in Indonesia - Focusing on Bank Central Asia

This study seeks to comprehensively analyze the historical development and current status of the Indonesian banking industry. Furthermore, it aims to delve into the origins, developmental trajectory, and current standing of Overseas Chinese Bank Central Asia, a pivotal player in the Indonesian banking landscape, while evaluating its competitive edge. Drawing from this examination, practical implications and strategic developmental approaches will be proposed. Through an extensive review of literature, we will scrutinize the evolution and present state of Indonesia's banking sector, along with the establishment, growth history, and current position of Bank Central Asia. Utilizing Porter's Five Forces analysis model, we will assess the competitive dynamics of Bank Central Asia, complemented by a SWOT analysis to scrutinize its internal and external environments. Despite its inception by overseas Chinese, Bank Central Asia has emerged as a frontrunner in Indonesia's financial realm. While it exhibits deficiencies in digital transformation, product innovation, customer experience, risk management, and collaborative innovation, it boasts strengths in network expansion, talent cultivation, and system enhancement for promotion and development. Leveraging these competitive advantages, Bank Central Asia has sustained its leading position within the Indonesian financial landscape. To maintain this competitive edge, Bank Central Asia must astutely navigate market trends, competitor actions, and regulatory shifts, making informed decisions and flexibly adjusting strategies as needed. Leveraging its external networks and internal strengths, Bank Central Asia has upheld a sterling reputation and achieved sustainable growth. The exploration of these Overseas Chinese banks not only sheds light on the intricacies of the Southeast Asian economies but also offers valuable insights into the dynamics of global banking and finance.

Impact of Financial Technology Firms on Banking Performance: Insights from Indonesia

The presence of fintech companies in the banking sector of Indonesia plays a crucial role in enhancing the conventional financial system. This study examines the influence of financial technology (Fintech) firms on the performance of banks by utilizing data from the Indonesian banking sector between 2018 and 2022. This study employs a regression analysis using a data panel fixed effect model. This study quantifies the impact of different financial variables, including Capital Adequacy Ratio (CAR), Gross Non-Performing Loans (NPL), Net Interest Margin (NIM), Return On Assets (ROA), Return On Equity (ROE), Operating Expense to Operating Income (BOPO), and Loans. Control factors in the context of Fintech include the deposit ratio (LDR), gross domestic product (GDP), and inflation. The results indicate that the financial indicators, including CAR, NPLgross, ROA, ROE, and NIM, do not have a statistically significant influence on Fintech. Additionally, Fintech is significantly influenced by other indicators such as BOPO (Balance of Payments) and LDR (Loan-to-Deposit Ratio), as well as control variables, including GDP (Gross Domestic Product) and inflation. This demonstrates that Indonesian banks can reap advantages by engaging in partnerships with fintech startups to enhance the financial system and optimize corporate profitability resulting from this collaboration.

Profitability as a Mediation for Problem Loans, Third-Party Funds, BI Rate on Company Value

This research from 2016 to 2022 intends to understand the relationship between the Islamic banking sector in Indonesia, company value, where profitability is the mediator between non-performing loans and third-party funds, and interest rates. This methodology uses purposive sampling to produce nine samples representing Islamic financial institutions. The criteria is an annual banking report, which can be obtained on the bank's official website or at the OJK. The quantitative descriptive methodology used in this research consists of the Sobel test and panel data regression analysis. Data analysis findings show that while profitability and the BI rate impact a company's value less, non-performing loans and third-party funding do. Profitability is unaffected by BI rates, non-performing loans, and third-party funding. Profitability does not mitigate the effect of third-party financing, non-performing loans, and the BI rate on a company's value.

Dinamika Lembaga Dan Aset Lembaga Perbankan Syariah Di Indonesia (Total Lembaga Dan Aset 2019 – Mei 2023)

This research utilizes a literature review method to investigate the dynamics of Islamic banking institutions and their assets in Indonesia from 2019 to May 2023. The 2022 Islamic Financial Development Report of Indonesia reveals a significant growth of 15.87% in the assets of the Islamic financial industry. The Financial Services Authority (OJK) emphasizes the resilience of the Islamic economic and financial sector, including Islamic banking, in facing the challenges of the COVID-19 pandemic. In 2022, the assets of the Islamic financial industry reached IDR 2,375.84 trillion, with growth primarily occurring in the Islamic capital market (15.51%) and Islamic Non-Bank Financial Institutions (20.88%). Indonesia remains a key player in the Islamic Finance Development Indicator 2022. This research describes the development of Islamic banking institutions from 2019 to May 2023, highlighting fluctuations in the number of branches and Islamic banks. Consolidation, Islamic financial literacy, and digital technology are key factors shaping the dynamics of this sector. Despite a decrease in the number of Islamic banks, total assets increased from IDR 624.564 trillion in December 2019 to IDR 785.646 trillion in May 2023. These factors support the growth and resilience of the Islamic banking sector in Indonesia.