Strengthening a sustainable Islamic financial industry through digital banking

Abstract

Purpose

This study aims to determine the factors that influence the actual behavior of Islamic digital banking customers based on the users’ perspectives during the recovery from the COVID-19 pandemic crisis.

Design/methodology/approach

This study used a causal exploratory method with quantitative and qualitative approaches presented in two parts. The first study (Study 1) was empirical testing of the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) used WARP-partial least square by modifying the variables of customer trust and satisfaction. A. Hayes’s PROCESS procedures were applied to examine the moderating effects of age, gender and experience. The second study (Study 2) explored the obstacles and solutions to improve digital banking services. The survey was conducted on 897 Islamic bank customers throughout Indonesia.

Findings

The results showed that all the hypotheses about the direct effect of the modification of the UTAUT2 model were supported empirically except for the effect of price value and hedonic motivation on behavioral intention, and there was just one moderating effect in this study. The other results show that 35 factors became obstacles to using digital banking.

Research limitations/implications

This study had limited qualitative data collection techniques that were less deep and comprehensive. This happened because respondents were given complete confidence to fill in the open questions without any follow-up to customer answers. For further research, an in-depth interview method can be added to crucial information from the customer and expert side to get in-depth and complementary data regarding constraints and solutions. This study only used a sample of customers of Islamic banks; further research is expected to use customers of Islamic banks and conventional banks to compare their preferences for digital banking.

Practical implications

This study offered seven strategies that could encourage increased digital banking transactions to accelerate crisis management, mitigate cybercrime and communicate the positive impact of digital banking effectively and efficiently.

Social implications

This study offered seven strategies that could encourage increased transactions using digital banking to accelerate crisis management, mitigate cybercrime and communicate the positive impact of digital banking effectively and efficiently.

Originality/value

Most of the existing studies focused on the modification model of the UTAUT2 model. The study is unique because it has proposed the obstacle and solution to improve digital banking service in Islamic Bank in Indonesia.