Asset Growth, Risk Management, and Digital Transformation in Islamic Banking: A Contemporary Analysis of Indonesia’s Financial Sector Stability

Authors

  • Jusrianto Jala Universitas Muhammadiyah Sidenreng Rappang

Keywords:

Islamic banking, financial performance, financial stability, Indonesia, asset growth, financial inclusion, digital banking

Abstract

This study examines the financial performance and stability of Indonesia’s Islamic banking industry during 2023–2025 by analyzing asset growth, financing expansion, third-party funds (DPK), profitability, capital adequacy, and asset quality. Using a quantitative descriptive approach with secondary data from official Islamic banking statistics and annual reports, the study applies trend analysis and ratio-based evaluation to assess industry performance and financial resilience. The findings show continuous asset and financing growth, supported by increasing third-party funds, reflecting stronger intermediation capacity and depositor confidence. Profitability (ROA) and capital adequacy (CAR) improved over time, while non-performing financing (NPF) declined, indicating better asset quality and risk management. These developments suggest that Indonesia’s Islamic banking sector is progressing toward greater institutional maturity and financial stability. The study also highlights the role of regulatory support, financial inclusion, and digital transformation in driving growth, although challenges such as limited market share, financial literacy gaps, and uneven digital adoption remain. The findings imply the need for stronger governance, digital banking infrastructure, and inclusive Islamic financial development to enhance long-term competitiveness and market penetration.

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Published

2026-06-03

How to Cite

Jala, J. (2026). Asset Growth, Risk Management, and Digital Transformation in Islamic Banking: A Contemporary Analysis of Indonesia’s Financial Sector Stability. Journal of Islamic Finance and Banking, 1(1), 1–7. Retrieved from https://journal.idscipub.com/index.php/jifb/article/view/1575

Issue

Vol. 1 No. 1 (2026): June 2026

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Articles

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