Journal of Finance and Islamic Banking

Financial Literacy and Cognitive Biases: Key Determinants of Gen Z Investment Choices

Mega Ningtyas, Maretha Ika Prajawati, Misbahul munir — Tue, 21 Jan 2025 00:00:00 +0700

This study investigates the influence of financial literacy and cognitive biases on investment decisions among Gen Z investors in Indonesia. A cross-sectional descriptive survey design was employed, guided by a positivist epistemology. Data were collected from 229 respondents through an online questionnaire and analyzed using Structural Equation Modeling-Partial Least Squares (SEM-PLS) to test the hypotheses. The results reveal that financial literacy and cognitive biases significantly impact investment decisions. Higher financial literacy is associated with more rational and informed investment choices. Conversely, cognitive biases, including hindsight bias and the illusion of control, strongly influence decision-making processes. These findings highlight the importance of targeted financial education programs to enhance financial literacy and reduce the effects of cognitive biases, enabling Gen Z investors to make better financial decisions. This study provides valuable insights for policymakers and educators to support the financial well-being of the younger generation.

Enhancing Green Banking Practices to Support Sustainable Development Goals: A Case Study of Bank Syariah Indonesia in Purwokerto

Ubaidillah MEI, Akhris Fuadatis Solikha, Putri Khoirunnisa Azahra — Tue, 21 Jan 2025 00:00:00 +0700

Green banking policies are crucial in aligning banking practices with environmental sustainability and supporting the global agenda of Sustainable Development Goals (SDGs). However, the implementation of such policies, particularly in Islamic banking institutions in Indonesia, remains underexplored. This study examines the implementation of Green Banking policies at Bank Syariah Indonesia in Purwokerto and assesses customer perceptions of these policies. Using a qualitative approach with field research methods, data were collected from Bank Syariah Indonesia employees, the Financial Services Authority (OJK), the Ngudi Dadi Livestock Group, customers, and MSMEs in Banyumas. Data analysis utilized the Miles and Huberman model with validation through the Triangulation method. The results reveal that Bank Syariah Indonesia has implemented Green Banking through Defensive, Preventive, Offensive, and Sustainable Banking approaches. Additionally, the application of the Green Coin Rating (GCR) framework—including carbon emissions reduction, green rewards, green building initiatives, recycling practices, paperless operations, and green investments—contributes to achieving the SDGs. These findings address research gaps and emphasize the policy's contributions to sustainability and customer engagement.

Islamic Banking and Halal MSME Development: Financial Access and Inclusion

Muhammad Khozin Ahyar, Catur, Dimas — Wed, 12 Feb 2025 00:00:00 +0700

This study examines the accessibility of MSME financing in Islamic banks, focusing on the transformations accelerated by the Covid-19 pandemic. As community activities were restricted, Islamic banks rapidly digitized their services to maintain customer engagement. Despite digital advancements, financing processes, especially for MSMEs, still heavily rely on face-to-face interactions, which pose challenges for MSME clients with limited access to information, capital, and guarantees. Using a quantitative approach with SmartPLS, the research investigates the impact of various financial inclusion indicators on MSME financing. The outer model test confirmed the validity and reliability of all variables (AVE > 0.50, Cronbach’s Alpha > 0.75). The inner model test revealed that office networks and IRDPK significantly influenced MSME financing, while ATM availability showed a moderate effect. Additionally, the IRPBY variable did not exert a positive impact. This study highlights the crucial role of Islamic bank office networks in facilitating MSME access to financing, especially in the halal sector, and suggests that further digital innovations could enhance accessibility.

Evaluating BSI Mobile User Satisfaction: The Impact of Product Quality and User Decisions with Islamic Branding as a Moderator

Jamilatul Arrohmah, Kharis Fadlullah Hana — Thu, 13 Feb 2025 00:00:00 +0700

Digital transformation in the banking sector has reshaped customer expectations, necessitating the adoption of mobile banking services. However, despite the increasing number of BSI Mobile users, there is still limited understanding of how product quality and user decisions influence user satisfaction, particularly within the framework of Islamic branding. Existing research on digital banking primarily focuses on service quality and usability, but studies examining the moderating role of Islamic branding in customer satisfaction remain scarce. This study aims to bridge this gap by analyzing the direct and moderated effects of product quality and user decisions on user satisfaction with BSI Mobile. A quantitative approach was employed, collecting data from 100 respondents via a structured questionnaire. Data analysis was conducted using SmartPLS 4 with Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that user decisions negatively impact satisfaction, while product quality positively influences satisfaction. Furthermore, Islamic branding negatively affects satisfaction but positively moderates the relationships between product quality, user decisions, and satisfaction. These insights highlight the need for improved product quality and strategic Islamic branding approaches to enhance digital Islamic banking services and customer engagement.

Investigating the Impact of Technology Acceptance Factors on Digital Payment Interest

Rifaatul Indana — Mon, 17 Feb 2025 00:00:00 +0700

This study aims to analyze the factors influencing interest in using digital payment systems by applying the Technology Acceptance Model 2 (TAM 2) approach. The research population consists of students at UIN Sunan Kalijaga Yogyakarta who use digital payment services. Data collection was conducted through an online questionnaire distributed via Google Forms, resulting in a sample of 165 respondents who met the research criteria. The collected data were then analyzed using the SmartPLS 3.0 application to test the proposed hypotheses. The findings reveal that seven out of ten hypotheses were accepted, while three hypotheses were rejected. The study highlights the significant impact of subjective norms, image, job relevance, output quality, and perceived usefulness on students' interest in using digital payments. However, certain variables, such as perceived ease of use, were found to have no significant effect on perceived usefulness. These results provide valuable insights into the factors driving digital payment adoption among students, emphasizing the role of social influence, perceived benefits, and system efficiency. The study contributes to a deeper understanding of digital payment acceptance and offers recommendations for improving adoption strategies.

The Influence of Credit Risk and Liquidity with Guarantee Interest Rate as a Moderator on the Financial Performance of Conventional and Islamic Rural Banks (BPR and BPRS)

Arief Rachman, Putra Pamungkas — Mon, 28 Apr 2025 00:00:00 +0700

This study aims to evaluate the financial performance (profitability), credit risk, and liquidity of BPR and BPRS before and during the pandemic. The study focuses on analyzing the impact of credit risk and liquidity on profitability and the moderating effect of the guarantee interest rate on liquidity in relation to the financial performance of BPR and BPRS. Design/methodology/approach: A total sample of 1,349 BPR and 153 BPRS across Indonesia was analyzed using Stata software. The research employed quantitative methods to test the proposed hypotheses regarding the relationships between credit risk, liquidity, and profitability, while assessing the moderating role of the guarantee interest rate. Research Findings: The findings show that NPL/NPF significantly affects the financial performance (ROA) of BPR and BPRS, with an increase in NPL/NPF negatively impacting profitability. Additionally, the guarantee interest rate strengthens the positive relationship between LDR/FDR and ROA, indicating that higher interest rates improve fund management and financial performance. Theoretical Contribution/Originality: This study contributes to the literature by highlighting the significant role of credit risk management and the importance of interest rate moderation in enhancing the financial stability and profitability of BPR and BPRS. It also emphasizes the differences in risk management approaches between BPR and BPRS, especially during economic downturns like the pandemic.