This study investigates the impact of Islamic Shariah compliance on customer satisfaction, focusing on the mediating effect of service quality within the context of Islamic banking services. Data obtained randomly from 124 Islamic bank customers in Indonesia were analyzed using multiple linear regression in SPSS. The results demonstrate that various factors, including attitude, subjective norms, and behavioral control, significantly influence the propensity of Islamic bank customers to adopt financial technology services offered by Islamic banks. It is important to note that this study is primarily centered on fintech-enabled Islamic banking services. This study underscores the need for Islamic Financial Institutions to enhance the success of fintech services and to promote these offerings to customers. Furthermore, it encourages Islamic financial institutions to harness technological advancements that streamline customer banking transactions. This study provides Islamic banks with valuable insights into the optimization of technology-driven financial services.
Top1. Introduction
Several studies identify diverse definitions of fintech. FinTech refers to the use of technology to provide financial solutions (Varma et al., 2022). FinTech is defined as the application of digital technology to financial intermediation issues (Griffin et al., 2023). The integration of financial technology (Fintech) plays a substantial role in enhancing the efficiency of the financial system through the reduction of operational costs, the provision of superior services, and the augmentation of consumer happiness (Hasan et al., 2023; Kou et al., 2021; Li et al., 2022; Qudah et al., 2023). In addition, fintech can play a relevant role in the SME transition towards a more sustainable business model, leading to better integration of circular economy practices (Pizzi et al., 2021). FinTech is an industry comprising companies that use technology to create a financial system and deliver financial services more efficiently (Griffin et al., 2023; Moro Visconti, 2020; Pentury, 2023).
The growth of internet use in Indonesia is already very high (Kharisma, 2022). More than 50 percent of Indonesian citizens are inseparable from the internet (Nopreza and Sumadi, 2022). The Indonesian Internet Service Providers Association (APJII) surveyed the Penetration and Behavior of Indonesian Internet Users in 2017”. The results of a survey in collaboration with Technopreneurs stated that the penetration of internet users in Indonesia increased to 143.26 million people, or equivalent to 54.7 percent of the total population of the Republic of Indonesia (Annisya et al., 2023).
Government Regulations through Bank Indonesia and the Financial Services Authority (OJK) have made several regulations related to this fintech (Suryono et al., 2021). This is to provide security assurance to consumers, or in this case, to the broader public. The availability of rules makes rights and responsibilities a crucial aspect of financial businesses.
In the subsequent four years, only nine companies engaged in FinTech operations were added, resulting in 25 enterprises in 2011-2012. As a result, finTech companies expanded by approximately 177.78 percent that year, compared to a growth rate of approximately 300 percent in 2006-2007. In 2013-2014, the number of FinTech companies increased from 25 to 40, with a growth of around 60 percent. Finally, from 2014 to 2016, the number of FinTech companies increased from 124 to 165, a phenomenal expansion, indicating that the number of FinTech companies increased by approximately 312.5 percent compared with the previous year (Nizar, 2017).
The emergence of FinTech creates direct competition between Fintech and banks (Murinde et al., 2022). Fintech also pursues partnerships or sells its services to financial institutions (Dasilas and Karanović, 2023; Mogaji, 2023; Ozili, 2018). The first strategy involves the collaboration between banks and fintech companies (Golodova and Grechkin, 2022; Ruhland and Wiese, 2022). For example, fintech can access numerous growth sources including clients, distribution, data, finance, experience, licensing, and trust. Banks have access to new ideas, solutions, capabilities, information, and possible investment opportunities through fintech, which has a far lower cost structure (Lutfi, 2018; Zhou et al., 2022).