The International Journal of Financial Systems
Financial systems form the backbone of modern economies, comprising a complex network of institutions, markets, regulations, and instruments that facilitate the efficient allocation of resources, risk management, and economic growth. Given the increasingly interconnected nature of our global economy, studying financial systems has become imperative for individuals, organisations, and policymakers alike. The development of financial systems is an ongoing process influenced by a myriad of factors, including technological advancements, regulatory frameworks, and changing market dynamics. Over time, financial systems have evolved from traditional, localised models to globalised, technology-driven ecosystems. Innovations such as digital banking, mobile payments, blockchain technology, and algorithmic trading have revolutionised financial transactions, reshaping the landscape of financial systems. Research on financial systems holds immense importance, as it delves into the intricacies and complexities associated with these systems. By examining various facets such as financial institutions, markets, instruments, regulatory frameworks, and risk management practices, researchers contribute to our understanding of how financial systems function, their efficiency, and their stability. Policymakers rely on this research to formulate effective regulations and policies that promote stability, enhance resilience, and mitigate systemic risks within financial systems. Furthermore, practitioners in the field of finance, including bankers, financial analysts, investment managers, and policymakers, benefit greatly from research on financial systems. These insights enable them to make informed decisions, manage risks effectively, and develop strategies that foster financial intermediation, sustainable economic growth, and financial inclusion. SCOPE The International Journal of Financial Systems welcomes papers from researchers, academics, and practitioners worldwide. We specifically invite contributions that address the following key topics: Financial Institutions Financial Instruments Financial Markets Financial Regulations and Policies Financial Inclusion Financial Literacy and Education Islamic Finance Sustainable Finance Innovative Financial Technology Financial System Stability Financial Integration
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<![CDATA[DeLone & McLean Model and Expectation Confirmation Model in Improving the Role of Digital Product Innovation in the Banking Industry: Evidence from Sharia Banking Aceh Province ]]>
<![CDATA[Yusmita, Fifi]]>;
<![CDATA[Ahlul Aqdi]]>
<![CDATA[ The International Journal of Financial Systems Vol. 2 No. 2 (2024) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v2i2.77
<![CDATA[The three-day disruption of BSI Mobile due to a cyber-attack raised serious data security concerns, especially in Aceh, which relies heavily on Indonesia's largest Islamic banking system due to Qanun No. 11 on Islamic Financial Institutions. This study examines the effects of system quality, information quality, service quality, security, and price value on user satisfaction with mobile banking in Aceh, and its influence on continued usage intention. SEM-PLS analysis of 582 BSI customers and a review of 30 articles shows that service quality, security, and price value significantly enhance satisfaction, driving continued usage, while system and information quality do not.]]>
<![CDATA[What Drives Firms to Enter Carbon Market? An Experimental Evidence ]]>
<![CDATA[Wijayanti, Dwi Marlina]]>
<![CDATA[ The International Journal of Financial Systems Vol. 2 No. 2 (2024) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v2i2.70
<![CDATA[Carbon exchange is a very new issue in Indonesia. Therefore, understanding the potential of carbon exchange to realize Net-Zero Emission is crucial. This study explores the factors that can encourage companies to enter the carbon exchange by understanding behavioral and non-behavioral factors. Psychological theory is also used to explain the motivation of corporate managers in making strategic decisions. This study is a quantitative study using experiments. The experimental design used is 2x2x2 between subjects. Data were analyzed using analysis of variance (ANOVA). The results of this study indicate that regulatory pressure, financial incentives, and international trade are factors that can encourage companies to enter the carbon exchange/carbon market. In addition, carbon trading is unable to outperform carbon taxes in the short term due to cost efficiency and investment costs in companies. In addition, this study can be a reference for policy makers to optimize the role of IDXCarbon in carrying out its functions and encourage more companies to be involved in carbon exchange trading to realize Net-Zero Emission by 2060.]]>
<![CDATA[Digital Payments and Regional Financial Intermediation ]]>
<![CDATA[Fariza Raz, Arisyi]]>
<![CDATA[ The International Journal of Financial Systems Vol. 2 No. 2 (2024) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v2i2.71
<![CDATA[The development of information and communication technology (ICT) in the banking sector leads to the proliferation of digital payments. Using Indonesia’s sub-national (provincial) banking data, we examine how bank loans and savings respond to digital payments. Our results show that digital payments increase transaction efficiency, boost consumption, and ultimately contribute positively to regional output. Digital payments also provide depositors with various investment options that can be accessed from mobile banking apps, thus increasing these investments while decreasing bank savings. These findings provide insights into the positive effects of digital payments on regional financial intermediation and development.]]>
<![CDATA[Utilisation of Demographic Bonus through Securities Crowdfunding Mediated by Financial Literacy, Inclusion and Trust ]]>
<![CDATA[Naufalia, Viani]]>
<![CDATA[ The International Journal of Financial Systems Vol. 2 No. 2 (2024) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v2i2.72
<![CDATA[The threat of the middle-income trap can actually be countered by Indonesia by exploiting and optimising demographic bonus, one of which is by maximising the potential of MSMEs as the largest contributor to national economic growth, namely by providing an alternative financing of Securities Crowdfunding listed in rule No. 16/POJK.04/2021. However, if we look at the demographic bonus conditions in Indonesia, we can see the negative gaps of the demographical bonus conditions, namely the lack of literacy, inclusion, and trust of MSMEs players in digital finance. So, the aim of this research is to find out how the exploitation of demographic bonus can be optimised through the innovation of securities crowdfunding, as well as supported by the mediation variables of financial literacy, inclusion and trust. The researchers used a quantitative research method with primary data in the form of a survey of 393 respondents from MSMEs in DKI Jakarta and its surroundings who are aged 15-49 years, then data analysis technique is Structural Equation Modelling (SEM) with the application SMART PLS 4.0. The results of this study show that securities crowdfunding can optimise the demographic bonus of 76.9%, then the conditions of financial literacy and inclusion can also support the implementation of securities crowdfunding in optimising demographic bonus of 61.2% and 59.7%. Thus, it is expected that the future potential of these securities crowdfunding can really be optimised to be one of the solutions for growing the national economy in the era of demographic bonus. In addition, the research also has implications for several sectors, as well as producing some policy recommendations.]]>
<![CDATA[How Does Banking Innovation Impact Banking Stability in Indonesia? The Moderating Role of Gender Diversity ]]>
<![CDATA[Kartiko, Nafis Dwi]]>
<![CDATA[ The International Journal of Financial Systems Vol. 2 No. 2 (2024) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v2i2.74
<![CDATA[This study aims to examine the impact of banking innovation on banking stability in Indonesia. Using financial data from 46 banks listed on the Indonesia Stock Exchange from 2004 to 2022 with 637 observations, this study applies the Ordinary Least Squares (OLS) method for its analysis. The results of this study show that banking innovation exerts a significant positive influence on banking stability in Indonesia. However, a surprising finding emerges from the moderation of gender diversity which turns out to have a negative effect on the relationship between banking innovation and banking stability, contrary to the literature that often shows a positive effect of gender diversity on firm performance. Additional analysis suggests that despite innovations, SOEs with strict structures and regulations may not be able to fully capitalise on the efficacy of such innovations due to bureaucratic barriers and strict government policies. In contrast, non-SOE firms are more agile and able to implement innovations with higher effectiveness, which contributes to their financial stability. The study also analyses various financial quadrants, showing that the effect of innovation on banking stability varies based on asset characteristics and firm age.]]>
<![CDATA[RegTech on Crypto FinTech: What Needs to be Done and Its Implications for the Anti-Money Laundering Mechanism ]]>
<![CDATA[Fajri, Kharisma Fatmalina]]>;
<![CDATA[Faachrezzi, Bima Rafly]]>;
<![CDATA[Kurniawan, Bagja]]>
<![CDATA[ The International Journal of Financial Systems Vol. 2 No. 2 (2024) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v2i2.75
<![CDATA[Crypto laundering has become a significant threat in Indonesia since 2015, particularly through digital payment systems. Despite efforts to combat this threat using Regulatory Technology (RegTech), the outcomes have been largely ineffective. This study expands on previous research exploring the causes of RegTech's ineffectiveness and seeks to provide policy recommendations based on RegTech provider perspectives, for Indonesian regulators to enhance crypto laundering mitigation through RegTech. The research employed an exploratory-inductive methodology, utilising primary data from semi-structured interviews with AML operating system specialists. The data were transcribed and thematically analysed using NVivo software. The findings reveal six key themes for improving RegTech effectiveness: (1) AML mechanisms tailored to various sizes of Crypto FinTechs; (2) Access to PEP data by RegTech providers; (3) Clear classification of RegTech; (4) Strengthened collaboration between regulators and RegTech providers; (5) Regulator-led education initiatives for Crypto FinTechs; and (6) The establishment and enforcement of sanctions. These insights hold significant implications for regulatory policies aimed at preventing crypto laundering through RegTech and contribute to the application of Rational Choice and Butterfly Effect theories in understanding crypto laundering as a criminal phenomenon.]]>
<![CDATA[Does Financial Innovation Support Development of Pensions and Insurance? The Moderating Role of Green Technology ]]>
<![CDATA[Kartiko, Nafis Dwi]]>;
<![CDATA[Mu’min, M. Silahul]]>;
<![CDATA[Anam, Muhammad Syariful]]>
<![CDATA[ The International Journal of Financial Systems Vol. 2 No. 2 (2024) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v2i2.76
<![CDATA[This study aims to assess the impact of financial innovation on the development of pension and insurance systems in ASEAN countries. Using secondary data analysis methods from 10 ASEAN member countries over the period 2004-2021, this study found that financial innovation has a positive and significant influence on operational efficiency and risk management in both sectors. The adoption of new financial technologies and innovative strategies is proven to promote sustainable growth, as well as strengthen financial stability, which has a positive impact on the welfare of people who depend on pension and insurance services. In addition, the application of green technologies in pension and insurance fund management also supports environmental sustainability and generates positive economic impacts. These findings confirm the importance of policies that support financial innovation as a key strategy in strengthening financial systems in the ASEAN region.]]>
