FACTORS INFLUENCING INDONESIAN HESITANCY IN ENTRUSTING THEIR FINANCIAL AFFAIRS TO BANK SYARIAH INDONESIA (BSI)

• Main Author: Azzahra, Azra
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77678
• Institution: Institut Teknologi Bandung

Indonesia, the largest country with a majority of Muslims, has seen an increasing demand for Shariah-compliant financial services. This research study focuses on addressing the challenges and opportunities surrounding the adoption of Islamic banking services in Indonesia, with a particular emphasis on Bank Syariah Indonesia (BSI) resulting from the merger of three state-owned Islamic banks. The study investigates the factors influencing Indonesians' hesitation to use Islamic banking services and examines the impact of the merger on trust among existing and potential users. Through a quantitative research approach, data was collected through surveys and literature reviews. The sample size comprises 136 respondents selected through purposive sampling, considering individuals within the productive age group who possess active banking or financial accounts. The data is analyzed using SPSS software. The findings reveal that the merger of three state- owned banks to form BSI has significantly improved trust and awareness among users and potential users of Islamic banking services. Factors such as the understanding of Islamic law and the reputation of the merged entity have positively influenced user interest in adopting Islamic banking. However, the study also indicates that brand awareness alone does not exert a significant influence on user interest. These results emphasize the need for continuous efforts to educate the public about the benefits and principles of Islamic banking to further enhance its adoption. While the merger of the three Islamic banks has positively impacted trust and awareness, sustained efforts are required to address the challenges and perceptions that hinder the broader adoption of Islamic banking services in Indonesia. Recommendations for future research include larger and more diverse sample studies, deeper qualitative investigations, and assessments of financial performance and regulatory dynamics to inform the continued development of Islamic banking in Indonesia.