<![CDATA[Research Aims: This study reframes the growth challenge of Indonesia’s Islamic banking as a financial-service marketing problem: strengthening customer adoption, trust, and perceived value to expand market penetration in a dual-banking environment while maintaining resilience. Design/Methodology/Approach: Using a system dynamics perspective, the study develops a causal loop diagram (CLD) grounded in a review of policy-document and prior empirical marketing/Islamic banking literature. A multi-actor lens is applied to map how regulators, government, customers, conventional banks, fintech, and ESG investors shape adoption and competitive dynamics. Research Findings: The CLD identifies seven reinforcing loops that can accelerate adoption and market share (capability reinvestment, socio-cultural social proof, digital youth adoption, sustainability reputation/green funding, literacy–inclusion growth, policy support, and social capital). It also identifies six balancing loops that can cap growth (non-performing financing/NPF–capital constraints, cyber-risk trust erosion, climate-risk credit deterioration, governance weakness, competition-driven margin compression, and social-capital erosion). The model suggests that adoption-led growth is sustainable only when trust- and risk-sensitive constraints are actively managed. Theoretical Contribution/Originality: This paper contributes a marketing-oriented, system-based explanation of why Islamic banking market penetration can stagnate and how multi-actor interventions can unlock adoption dynamics. Practitioner/Policy Implications: The most robust strategy is a policy bundle combining governance strengthening, calibrated prudential support, digitalization with cyber resilience, and literacy/inclusion programs, complemented by ESG incentives with climate-risk analytics. Research Limitation/Implications: The CLD offers a dynamic hypothesis for Islamic financial product marketing and provides a foundation for future stock–flow simulation and empirical testing of adoption and trust mechanisms.]]>
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