This research aims to provide recent empirical evidence on the effect of digital financial innovation in Islamic banking worldwide on Islamic bank financing (IBF) and Islamic bank deposits (IBD).
This research used data from social media and Islamic bank websites for the year 2023 to examine the influence of digital financial innovation on IBF and IBD.
The results of this research indicate that digital financial innovation in Islamic banks, as measured by online disclosure through social media and websites, has a positive and significant effect on both the significance of Islamic banks and community welfare, which are measured by IBF and IBD. Independent T-test was conducted as an additional analysis to reinforce the outcomes of previous analysis.
This study limitedly involved only Islamic banks and only regarded cross-sectional data.
This research recommends the establishment of standard guidelines for financial information disclosure through social media and websites. Such guidelines could help enhance the significance of Islamic banking, improve the performance of Islamic banks and attract more investors.
This research helps reduce monitoring costs and improves information provision to stakeholders, thereby facilitating better-informed investment decisions.
Previous research has primarily used profitability and Tobin’s Q as indicators of company performance. However, no research have yet explored the relationship between digital financial innovation and the performance of Islamic banks, particularly in terms of IBF and IBD.
