ANALYSIS OF ARTIFICIAL INTELLIGENCE IMPLEMENTATION IN ISLAMIC BANKING DURING AN ERA OF UNCERTAINTY
Abstract
This study analyzes the impact of Artificial Intelligence (AI) adoption on the performance of Islamic banks in Indonesia, with a focus on the moderating role of economic uncertainty. Using panel data from 12 Islamic commercial banks from 2021 to 2024, AI adoption is measured through a composite index evaluating the scope and depth of technology implementation across four dimensions: customer service, operations and compliance, credit and risk analysis, and strategic investment. The analysis employs a random effects regression model. The findings reveal a nuanced perspective AI adoption does not yet have a significant effect on Return on Assets (ROA). Similarly, economic uncertainty and its interaction with AI are found to be insignificant. These results indicate that AI integration in Indonesian Islamic banking remains preliminary and lacks strategic depth. The primary determinant of bank performance remains operational efficiency (OE). This study provides critical empirical evidence that AI investment does not automatically translate into profitability in this specific context. The findings enrich the discourse on fintech implementation in emerging markets and offer a foundation for developing more effective digital strategies for Islamic banking.
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Baker, S. R., Bloom, N., & Davis, S. J. (2016). Measurng Economic Policy Uncertainty. Lecture Notes in Electrical Engineering, 87 LNEE(VOL. 2), 383–391. https://doi.org/10.1007/978-3-642-19712-3_48
Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal Management, 17, 27.
Beck, T., Demirgüç-Kunt, A., & Merrouche, O. (2013). Islamic vs. conventional banking: Business model, efficiency and stability. Journal of Banking and Finance, 37(2), 433–447. https://doi.org/10.1016/j.jbankfin.2012.09.016
Berger, A. N. (2005). The Economic Effects of Technological Progress: Evidence from the Banking Industry. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.332900
Boot, A., Hoffmann, P., Central, E., Ratnovski, L., & Central, E. (2020). Fntech: What’s Old, What’s New? December.
Butt, U., & Chamberlain, T. (2025). Performance of Islamic Banks During the COVID-19 Pandemic: An Empirical Analysis and Comparison with Conventional Banking. Journal of Risk and Financial Management, 18(6), 1–25. https://doi.org/10.3390/jrfm18060308
Hamadou, I., Yumna, A., Hamadou, H., & Jallow, M. S. (2024). Unleashing the power of artificial intelligence in Islamic banking: A case study of Bank Syariah Indonesia (BSI). Modern Finance, 2(1), 131–144. https://doi.org/10.61351/mf.v2i1.116
Hassan, M. K., & Aliyu, S. (2018). A contemporary survey of islamic banking literature. Journal of Financial Stability, 34, 12–43. https://doi.org/10.1016/j.jfs.2017.11.006
IFSB. (2023). Regulatory Practices in Digital Islamic Banking. December. www.ifsb.org.
Iqbal, M. S., Sukamto, F. A. M. S. B., Norizan, S. N. B., Mahmood, S., Fatima, A., & Hashmi, F. (2025). AI in Islamic finance: Global trends, ethical implications, and bibliometric insights. Review of Islamic Social Finance and Entrepreneurship, 4(1), 70–85. https://doi.org/10.20885/risfe.vol4.iss1.art6
Irawan, D., Haryadi, & Puspa Arum, E. D. (2019). Analisis Pengaruh NPF, BOPO, CAR, FDR dan NIM Terhadap Return on Asset (ROA) Pada Bank Umum Syariah di Indonesia Tahun 2013-2017. Jurnal Akuntansi & Keuangan Unja, 4(1), 1–14. https://doi.org/10.22437/jaku.v4i1.7424
Knight, F. H. (1921). Knight, Frank Hyneman: Risk, Uncertainty, and Profit. In Die 100 wichtigsten Werke der Ökonomie (pp. 108–109). https://doi.org/10.34156/9783791046006-108
Lasmiatun, K., & Manteghi, N. (2025). The Impact of Artificial Intelligence (AI) Implementation on Islamic Financial Literacy and Global Economic Changes in the Banking World. Journal of Lslamic Economics and Bussines Ethics, 2(1), 23–43. https://doi.org/10.24235/jiesbi.v2i1.253
Maulani, S., Rakhmawati, A., Budiman, M. A., Sadewa, M. M., & Ainun, B. (2025). Artificial Intelligence in Islamic Financial Institutions in Indonesia: A Systematic Literature Review. International Journal of Economics, Business Management and Accounting (IJEBMA), 7(1), 231–246. https://doi.org/10.59890/ijebma.v7i1.2733
McKinsey. (2021). Indonesia and Islamic banking: An interview with Hery Gunardi. McKinsey & Company, December, 1–4. https://www.mckinsey.com/capabilities/m-and-a/our-insights/indonesia-and-islamic-banking-an-interview-with-hery-gunardi#/
Meero, A. (2025). Islamic vs. Conventional Banking in the Age of FinTech and AI: Evolving Business Models, Efficiency, and Stability (2020–2024).
Mohammed, M. O., & Taib, F. M. (2015). Developing Islamic Banking Performance Measures Based on Maqasid Al-Shari’Ah Framework: Cases of 24 Selected Banks. In Journal of Islamic Monetary Economics and Finance (Vol. 1, Issue 1, pp. 55–78). https://doi.org/10.21098/jimf.v1i1.483
OJK. (2023). Weekly Statistics Report. Capital Market Statistics.
Rakan, F. (2022). ROA Bank Umum Syariah Di Indonesia ( Studi Pada Tahun 2015-2020 ). 11, 2015–2019.
Rustandi, & Arifin, A. H. (2024). AI in Finance: A Systematic Literature Review. Proceeding International Collaborative Conference on Multidisciplinary Science, 1(2), 323–338. https://doi.org/10.70062/iccms.v1i2.66
Safriatullah, S., Auliadi, R., Amrullah, A., Nurmalawati, N., & Jais, M. (2025). Tantangan Implementasi AI di Perbankan Syariah: Perspektif Regulasi dan Etika. Jurnal Ilmiah Guru Madrasah, 4(1), 34–51. https://doi.org/10.69548/jigm.v4i1.40
Sarker, I. H. (2022). AI-Based Modeling: Techniques, Applications and Research Issues Towards Automation, Intelligent and Smart Systems. SN Computer Science, 3(2), 1–20. https://doi.org/10.1007/s42979-022-01043-x
Shalhoob, H. (2025). The role of AI in enhancing shariah compliance: Efficiency and transparency in Islamic finance. Journal of Infrastructure, Policy and Development, 9(1), 11239. https://doi.org/10.24294/jipd11239
Tayachi, T., & Brahimi, T. (2023). Analysis and Visualization of Scientific Research on Islamic Banking and Artificial Intelligence. IET Conference Proceedings, 2023(39), 341–352. https://doi.org/10.1049/icp.2024.0506
Teece, D. J. (2007). Explicating Dynamic Capabilities : The Nature And Microfoundations Of ( Sustainable ) Enterprise Performance. 1350(August), 1319–1350. https://doi.org/10.1002/smj
Yuliana, I. R., & Listari, S. (2021). Pengaruh CAR, FDR, Dan BOPO Terhadap ROA Pada Bank Syariah Di Indonesia. Jurnal Ilmiah Akuntansi Kesatuan, 9(2), 309–334. https://doi.org/10.37641/jiakes.v9i2.870
Published
2025-10-15
How to Cite
IHYANI, Liyali et al.
ANALYSIS OF ARTIFICIAL INTELLIGENCE IMPLEMENTATION IN ISLAMIC BANKING DURING AN ERA OF UNCERTAINTY.
Proceedings of the International Conference of Islamic Economics and Business (ICONIES), [S.l.], v. 11, n. 1, p. 671-678, oct. 2025.
ISSN 2541-3333.
Available at: <https://conferences.uin-malang.ac.id/index.php/iconies/article/view/3508>. Date accessed: 19 jan. 2026.
Section
Articles
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