Jordanian Islamic Banks Research Articles

Ijara Ending with Ownership (Lease) A Case Study of Jordanian Islamic Banks

Ijara Ending with Ownership (Lease) A Case Study of Jordanian Islamic Banks

The Impact of Financial Technology on returns of shares for Jordanian Islamic Banks

This research aims to elucidate the profound impact of financial technology (FinTech) on the returns of shares for Jordanian Islamic banks, specifically, Jordan Islamic Bank, Arab Islamic Bank, and Safwa Islamic Bank. Using the descriptive analytical method, appropriate for the nature of the study, comprehensive data was meticulously gathered from various studies and reports, addressing both theoretical and empirical dimensions. The study encompasses the entire population of Jordanian Islamic banks.Through a rigorous analysis of FinTech trends spanning 2016 to 2021, the research establishes statistically significant differences (at a significance level of α≤0.05) among Jordanian Islamic banks regarding their FinTech adoption. Furthermore, the study discerns statistically significant variations in the returns of shares for Jordanian Islamic banks during the same timeframe.The findings underscore the need for strategic initiatives, including targeted marketing campaigns, to enhance awareness of electronic banking. Additionally, emphasis should be placed on fortifying the security and confidentiality elements integral to electronic banking services. This research provides valuable insights for practitioners, policymakers, and stakeholders in the ever-evolving landscape of Islamic banking and financial technology.

The Role Of Internal Financing Sources To Reduce Liquidity Risks

This study aims to analyze the impact of internal financing sources on liquidity risks in Jordanian Islamic banks during the period from 2008 to 2022, using regression analysis. The results show that increasing paid-in capital, reserves, and retained earnings reduces liquidity risk and enhances financial stability. It has been shown that Islamic banks are able to manage these resources effectively. The study recommends strengthening these sources and applying advanced risk management procedures that are compatible with Sharia controls.

The Role of Direct Credit Facilities in Financing Small and Medium Enterprises in Jordan Case Study (Islamic International Arab Bank)

Objectives: The study aimed to identify the role of Islamic banks operating in Jordan (Islamic International Arab Bank) in providing appropriate financing for small and medium-sized enterprises, and on the effectiveness of the financing methods adopted in the Jordanian Islamic banks to finance small and medium-sized projects, and on the most important obstacles and difficulties facing Islamic banks (Islamic International Arab Bank) when providing appropriate financing to small and medium-sized enterprises. Methods: The study relied on the descriptive approach in order to describe and explain the role of Islamic banks in financing small and medium enterprises and to identify the most important obstacles faced by Islamic banks. Results: The study concluded that there is a role for Islamic banks in financing small and medium enterprises, which is a strong relationship, since the correlation coefficient is 99.8, and there is an effectiveness of Islamic financing formulas in financing small and medium enterprises. There are some obstacles that Islamic banks (International Arab Islamic Bank) face when providing financing to small and medium enterprises. Conclusion: The study recommended the need for the competent authorities such as the Central Bank to work to provide the elements of success for Islamic banks because of their important role in providing financing for small and medium enterprises. And that Islamic banks should provide feasibility studies for the projects that provide financing to them.

The Impact of Financial Risks on the Profitability of Absolute Investment Account Holders in Jordanian Islamic Banks: The Moderating Role of Market Share

This study aimed to test the impact of financial risks on the profitability of absolute investment account holders in Jordanian Islamic banks and the moderating role of market share. The study used a descriptive and analytical approach, relying on data from the Jordanian Central Bank statistics and annual reports of a sample comprising (3) banks for the period between (2012-2021 AD). Financial risks were measured through credit risks, liquidity risks, and capital risks, while market share was treated as a moderating variable. The profitability of absolute investment account holders was measured through deposit returns. The study found variability among Jordanian Islamic banks in the profitability of absolute investment account holders. The results showed no significant impact of financial risks (liquidity risks and credit risks) on the profitability of absolute investment account holders. The impact was confined to capital risks. The study recommended Islamic banks to increase regulatory capital and enhance market share, both in terms of funding sources (deposits) and providing a financing mix suitable for various investment sectors.

The Internal Determinants of Cost Efficiency in Jordanian Islamic Banks

The study aimed to identify the internal factors affecting cost efficiency in Jordanian Islamic banks for the period (2012-2021). The study expressed cost efficiency through the expenses-to-revenue ratio as a dependent variable. The independent variables were the return-on-assets ratio, return-on-deposits ratio, capital adequacy ratio, ownership rights-to-assets ratio, fixed capital cost ratio, labor costs, and bank size. The study used a descriptive-analytical approach, where data stationarity was tested, and the Autoregressive Distributed Lag Model (ARDL) was employed to determine the effect of independent variables on the dependent variable. The study found a statistically significant positive impact of the capital adequacy ratio, ownership rights-to-assets ratio, and fixed capital cost ratio. It detected a negative effect of labor costs and found no statistically significant differences in the return-on-assets ratio, return-on-deposits ratio, and bank size on cost efficiency in Jordanian Islamic banks. The study recommended working to enhance cost efficiency by improving resource distribution, enhancing technical proficiency, and refining the banks' inputs, thus increasing their competitiveness and profitability.

The Effectiveness of Fintech Strategies in Mitigating Credit Risk: A Case Study of Jordanian Islamic Banks (2016-2022)

The Effectiveness of Fintech Strategies in Mitigating Credit Risk: A Case Study of Jordanian Islamic Banks (2016-2022)

The Impact of Financial Technology Expenditures on Attracting Deposits and Investing Funds: An Applied Study on Jordanian Islamic Banks

Purpose: The study aims to demonstrate the impact of financial technology expenses on attracting deposits and utilizing funds within Jordanian Islamic banks. Method/design/approach: To achieve this, the researchers used a descriptive-analytical approach to describe the phenomenon of financial technology expenses from 2016 to 2022, and to analyze its effect on deposit attraction and fund utilization in the relevant banks. Results and conclusion: The study's results indicated a tangible and positive impact of financial technology expenses on deposit attraction in Jordanian Islamic banks during the studied period. Additionally, the results also demonstrate a positive effect of financial technology expenses on the volume of funding and investment in Jordanian Islamic banks during the studied period. Statistical analysis revealed that these results have statistical significance, suggesting that financial technology expenses have a strong and tangible impact on deposit attraction and fund utilization in Jordanian Islamic banks. Research implications: The study results suggest that upcoming research could delve into the policy implications, for bodies to back fin.tech integration in Jordan's banking industry. Subsequent inquiries could examine customer behavior risk management approaches and the lasting viability of fin.tech investments. Moreover conducting studies across regions and pinpointing future research avenues are essential to enhance comprehension of how fin.tech influences deposit attraction and fund utilization, in Islamic banks. Originality/value: The Significance of this research lie, in its investigation of the effects of fintech spending on banks in Jordan shedding light on the merging realms of Islamic finance and contemporary technology. The results offer advice for decision makers, banking leaders and scholars striving to boost the efficiency and competitiveness of banking, in Jordan and other regions.

The Impact of Resonant Leadership on Strategic Adaptation in Jordanian Islamic Banks

The Impact of Resonant Leadership on Strategic Adaptation in Jordanian Islamic Banks

Technological turbulence as hindrance between factors influencing readiness of senior management and implementing blockchain technology in Jordanian Islamic banks: a structural equation modeling approach

The purpose of the study was to identify the factors that influence senior management for adopting blockchain technology in the banking industry in general and Islamic banking in particular. Furthermore, the research addressed the moderating role of technological turbulence as it holds a significant hindering role. This study employed the analytical approach, and the data were collected through questionnaires distributed to several senior management employees in both the Jordan Islamic Bank and the Islamic Arab Bank. The research instrument was developed and confirmed by the experts in the field. For identifying the significance of the variables incorporated in the researchers applied structural equation modeling technique. The findings revealed that economic efficiency, bank security, customer expectations, education, training and preparation all are significant predictors of readiness for implementing blockchain technology in the Islamic banks in Jordan. The study concluded that blockchain technology should be adopted by all Islamic banks because of its advantages and also the management needs to be educated regarding the same; they should be provided appropriate training.

The role of metaverse and blockchain in enhancing digital Islamic finance: empirical perspective

Purpose This study aims to investigate the connections between the adoption of technology, user experience (UX), financial transparency and accountability, specifically focusing on the moderating influence of cultural sensitivity in the Jordanian context. Design/methodology/approach This study gathered data from 272 participants who are working in the operational Islamic banks in Jordan. Partial least squares structural equation modeling (PLS-SEM) is used for the hypotheses testing. Findings The results indicate that cultural sensitivity plays a significant role in shaping the UX, consequently influencing perceptions of financial transparency and accountability in e-Islamic finance within the metaverse. This study underscores the intricate interplay between technological advancements, adherence to Sharia principles and diverse cultural expectations, forming the crux of the research. Originality/value This research brings a novel perspective by examining the complex connections among technology adoption, UX, financial transparency and accountability, specifically within the distinctive context of Jordan. This research study innovates by checking out how social sensitivity moderates these partnerships, specifically in the context of e-Islamic finance in the metaverse. It adds value to the academic area by shedding light on the intricate interaction between technological development, adherence to Sharia concepts and differing cultural expectations. Ultimately, this adds to a much deeper understanding of the multifaceted nature of this domain.

The intention to adopt metaverse in Islamic banks: an integrated theoretical framework of TAM and religiosity intention model

Purpose This paper aims to explore the intention to adopt the Metaverse in Islamic banks, with a particular focus on evaluating perceived usefulness, ease of use, user satisfaction and the influence of religiosity. Integrating the technology adoption model (TAM) and religiosity intention model, this study will dissect the multidimensional aspects influencing the acceptance of Metaverse technologies. Design/methodology/approach Surveying Islamic bank professionals in Jordan, this study used a structured questionnaire and data augmentation to analyze Metaverse adoption factors. Using partial least squares-structural equation modeling, the relationships between ease of use, usefulness, religiosity and satisfaction were explored. Findings The study identifies pivotal relationships among perceived usefulness, ease of use, user satisfaction and religiosity in the context of adopting metaverse technologies in Islamic banks in Jordan. Evidence highlights the dominant role of perceived usefulness and ease in influencing both intention to use and satisfaction levels. Religiosity, while not a direct influencer, plays a collaborative role, underscoring a balanced mix of technological and religious elements that will potentially shape the adoption trajectory of metaverse technologies within this specific banking sector. Practical implications Integrating metaverse technologies in Islamic banks necessitates balancing technological advances with Sharia compliance. The study underscores the importance of aligning user experience with religious values and fostering innovation within Islamic ethical guidelines. Originality/value This study uniquely integrates the TAM and religiosity-intention model to explore metaverse adoption in Islamic banks, unveiling a nuanced interplay between technology and religious values. It offers practical insights for tailoring innovations in the Islamic financial ecosystem.

The role of artificial intelligence in developing the accounting system in Jordanian Islamic banks

The current study aims to determine the role of artificial intelligence (AI) in developing the accounting system (AS) in Jordanian Islamic banks. Currently, Islamic banks in Jordan are included in the research population. Using a quantitative research approach, 128 workers of Islamic banks in Jordan were chosen as a sample for this study. The study used a survey questionnaire instrument that was created based on past relevant literature and studies to collect the required data. The results indicated that there is an influence of AI (big data, intelligent agents, expert systems and automation processes) on the development of the AS in Jordanian Islamic banks. Accordingly, the study recommends that to improve AS tasks and reduce associated costs, accountants and accounting companies should always increase their understanding of artificial intelligence.

The influence of some fintech service on the performance of Islamic bank in Jordan

Islamic banking across the developing countries may undoubtedly become more prevalent thanks to financial technology, making it more competitive in the financial sector. The current study's goal is to extensively address fintech on Islamic banks and to examine the effect of fintech Services upon Islamic banking financial performance around Jordan. The investigation utilized a quantitative-descriptive survey approach. The study utilized annual data (panel data) which were acquired via financial institutions figures of the annual statements from the Jordan's Islamic Bank (JIB) registered with Amman Stock Exchange from 2017 to 2021. This investigation found Fintech services, such as internet banking, mobile banking, crowdfunding, and automated teller machines had a substantial effect on JIB's financial performance. The positive beta value suggests that there were favorable relationships among JIB's financial success from 2017 to 2021 on Fintech services. Finally, the study recommends that JIB increase its efforts to inform the public concerning Islamic banking services.

Digital transformation: An empirical analysis of operational efficiency, customer experience, and competitive advantage in Jordanian Islamic banks

This research aims to investigate the impact of digital transformation on the operational efficiency, customer experience, competitive advantage, organizational performance, and risk management in Jordanian Islamic banks. A descriptive analytical method was used, collecting primary data from a survey of 68 employees across four Islamic banks. Statistical tools, including linear regression and correlation, were used for data analysis and hypothesis testing. The findings revealed that digital transformation significantly influences the operational efficiency, competitive advantage, customer experience, organizational performance, and risk management of Islamic banks at a significance level of α ≤ 0.05. While digital transformation generally enhanced operational outcomes and customer experience, it also increased exposure to risks such as electronic attacks, fraud, and privacy concerns. The results highlight the importance of integrating digital transformation in Islamic banking while employing robust risk management strategies. These findings provide insights for policymakers, bank managers, and researchers in formulating strategic initiatives for digital transformation in the banking sector. The research contributes to the literature by focusing on the role of digital transformation in Islamic banking, a less-explored area in academic studies. This research also presents valuable implications for practice, specifically for banks and regulators to balance the potential of digital transformation with the associated risks.

Factors affecting Jordanian Islamic banks towards competitive advantage

Factors affecting Jordanian Islamic banks towards competitive advantage

Examining the adoption decision of Islamic electronic banks in Jordan

This study aims to examine the factors affecting Jordanian Islamic banks’ customers’ adoption of electronic banks. The study relied on quantitative methods, where the study designed a questionnaire based on the Technology Acceptance Model (TAM) which derived from the Theory of Reasoned Action (TRA). The study sample consisted of 470 respondents. The study applied the Partial Least Squares Structural Equation Modeling (PLS-SEM), where the results of the Chi-square test and the standardized root mean square residual (SRMR) test showed the validity of the model for analysis. The results showed that usefulness, privacy, and awareness affect the adoption of e-banking, and that ease to use and electronic skills affect the adoption of e-banking through usefulness. The results also show that Infrastructure does not affect the adoption of e-banking, and Convenience does not affect the adoption of e-banking through Intention to use e-banking. The study advises Islamic banks to spread awareness about the importance of electronic banking and design easy-to-use electronic services that enjoy privacy and security.

The Risks of Using Financial Technology on the Jordanian Islamic Banking Sector

The current study aimed to investigate the impact of the risks associated with the use of financial technology on the Islamic banking sector in Jordan. The researcher adopted a descriptive-analytical approach by referring to previous studies and scientific journals. The researcher developed a study tool, a questionnaire, that was tailored to the study's objectives. The study's population consisted of administrative employees in Islamic banks, numbering approximately 4,094 employees. The study sample was drawn from employees in the northern region of Jordan, with 218 questionnaires distributed and 206 questionnaires returned. After reviewing the questionnaires, it was found that 6 questionnaires were not valid for statistical analysis. Among the study's key findings, there was a statistically significant impact of the risks associated with various types of financial technology (lack of knowledge, operating systems, information security) at a significant level (α≤0.05) on the Islamic banking sector in Jordan. The results also indicated a good level of financial technology application in Islamic banks in Jordan. One of the main recommendations from the study is the necessity to develop banking regulatory and supervisory frameworks to keep pace with advancements in modern financial technology models. This can be achieved by utilizing regulatory technology and striking a balance between promoting competition and financial innovations, while ensuring the stability of the banking sector.

The influence of board of directors’ characteristics on corporate social responsibility disclosures in Jordanian Islamic banks

In an era where organizations are increasingly recognizing the paramount importance of addressing societal and environmental concerns, corporate social responsibility (CSR) has emerged as a pivotal facet of contemporary business practices. Within the banking sector, Islamic banks assume a significant role in advocating ethical and socially responsible conduct. This study delves into the impact of the board of directors' characteristics on corporate social responsibility disclosures (CSRD) within Jordanian Islamic banks. Data were meticulously gathered from three Jordanian Islamic banks, all of which are listed on the Amman Stock Exchange (ASE), over the span of the years 2010 to 2022. Our findings illuminate that Jordanian Islamic banks, on average, disclose 47 percent of their CSR endeavors, marking a commendable level of transparency, particularly when contrasted with less developed economies. Notably, independent directors comprise 42% of the board composition, with the average age of board members standing at 41 years. Moreover, 8.10% of board members hold degrees in finance and accounting, while 0.24% possess professional experience within the Big Four accounting firms. On average, Jordanian Islamic banks convene 10.27 board meetings annually, and 48% of directors maintain multiple directorships. Significantly, our analysis underscores that all examined characteristics of board members have a favorable influence on CSR disclosure within Jordanian Islamic banks. This paper constitutes a substantial contribution to the extant literature by providing empirical substantiation of the nexus between the board of directors' characteristics and CSRD in Jordanian Islamic banks, with a specific emphasis on the unique domain of Islamic banking, which has hitherto received limited scholarly attention. Further avenues of research are recommended to explore additional variables and delve deeper into the intricate interplay between board characteristics, external contextual factors, and the disclosure of CSR activities.

The Contribution of the Islamic Economics to Reduce the Unemployment Caused by the Corona Pandemic (Covid-19) on the Jordanian Labor Market

The research aimed to study the contribution of the Islamic economy in reducing the unemployment problem caused by Corona pandemic (Covid-19) in the Jordanian labor market. The study used the descriptive analytical approach and the inductive approach. One of the most important results of the study was that the Corona pandemic and its accompanying economic repercussions had caused an increase in the unemployment rate in Jordan, and that the Islamic economics tools and institutions have contributed to mitigating this increase. The Jordanian Zakat Fund, Awqaf Funds Development Department, and donations to the Al-Khair Account, contributed to mitigating the economic effects of the Corona pandemic on the Jordanian labor market. Jordanian Islamic banks also contributed, through Al-Qard Al-Hasan, to mitigate the effects of the pandemic on unemployment. The study recommended the need to urge the rich to provide financial assistance in its forms, and encouraging investment in projects that employ large numbers of unemployed.