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
Articles
27 Documents
<![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.]]>
<![CDATA[Environmental, Social, and Governance (ESG) Risk towards Stock Market Reaction in Indonesia ]]>
<![CDATA[Simamora, Alex Johanes]]>
<![CDATA[ The International Journal of Financial Systems Vol. 3 No. 1 (2025) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v3i1.45
<![CDATA[Investors want to ensure that their investments will be sustainable by investing in a business that considers ESG aspects. This research aims to examine the effect of ESG risk on stock market reaction in Indonesia. Research samples include 300 observations that listed on the index of Indonesian Stock Exchange ESG Leaders. ESG risk is measured by ESG risk score. Stock market reaction is measured by abnormal return. Hypothesis test uses fixed-effect regression analysis. Based on data analysis, ESG risk has an effect on stock market reaction. The effect of ESG risk on stock market reaction occurs more in lower information asymmetry. It indicates that lower ESG risk captures effective ESG implementation and lower companies’ risks and attracts investors to buy the stock. This research provides new evidence of ESG risk on investors’ reactions on the Indonesian Stock Exchange.]]>
<![CDATA[Is Full-Fledged Sharia General Insurance More Efficient Compared to Sharia Business Units (UUS)? An Efficiency Evaluation Study Towards the Mandatory Spin-Off Period in Indonesia ]]>
<![CDATA[Marsella, Marsella]]>;
<![CDATA[Nurzaman, Mohamad Soleh]]>;
<![CDATA[Anwar, Saiful]]>
<![CDATA[ The International Journal of Financial Systems Vol. 3 No. 1 (2025) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v3i1.47
<![CDATA[This study explores the comparative efficiency of Islamic general insurance providers in Indonesia, focusing on full-fledged companies versus Islamic business units (UUS), particularly in light of the mandatory spin-off policy. Covering the period from 2017 to 2022, we adopt a two-stage analytical approach. First, we apply a non-parametric method — Data Envelopment Analysis (DEA) — to measure efficiency levels, using assets and business expenses as input variables, and net profit along with operating income as output variables. In the second stage, we employ Tobit regression to investigate the key drivers of efficiency, using the DEA scores as the dependent variable and Return on Assets (ROA), Return on Equity (ROE), Current Ratio, and Risk-Based Capital (RBC) as explanatory factors. Our findings reveal that Islamic business units consistently outperform full-fledged Islamic insurers in achieving higher efficiency. Furthermore, ROA emerges as a significant positive determinant of efficiency, while the Current Ratio shows a significant negative impact. In contrast, ROE and RBC do not exhibit significant influence on efficiency levels. These insights contribute to the discourse on the operational dynamics of Islamic insurance, offering practical implications for regulators and industry stakeholders navigating the evolving Sharia insurance landscape in Indonesia.]]>
<![CDATA[Women, Global Reporting Initiative Standards (GRI), and Carbon Emission Disclosure: Are Women Eco-Friendly? Evidence from Banking in Indonesia ]]>
<![CDATA[Anwar, Saiful]]>;
<![CDATA[Rusanti, Ega]]>;
<![CDATA[Maulidiyah, Dewi Rahmawati]]>
<![CDATA[ The International Journal of Financial Systems Vol. 3 No. 1 (2025) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v3i1.40
<![CDATA[This study aims to examine whether the adoption of the Global Reporting Initiative (GRI) Standards enhances carbon emission disclosure among banks in Indonesia. Furthermore, it provides empirical evidence that the presence of women on boards moderates the relationship between GRI adoption and carbon emission disclosure. The study was conducted on 40 conventional and Islamic banks listed on the Indonesia Stock Exchange (IDX) during the period 2015–2021. The analysis employs Ordinary Least Squares (OLS) regression, with robustness tests conducted using alternative measurement variables to ensure the consistency of the results. The findings consistently demonstrate that the adoption of GRI Standards positively influences carbon emission disclosure in Indonesian banks. The presence of women on boards promotes banks’ engagement in global climate change agendas, aligning with the implementation of Sustainable Development Goals (SDGs) 5, 8, and 13. This study reinforces stakeholder theory and Critical Mass Theory, indicating that a minimum threshold of female board members is necessary to influence strategic decisions, particularly in encouraging voluntary disclosures such as carbon emission reporting. Notably, the study also finds that carbon emission disclosure is valued by banking stakeholders in Indonesia. Therefore, policymakers are encouraged to establish regulations that mandate GRI adoption and ensure a minimum representation of women in strategic decision-making positions within the banking sector.]]>
<![CDATA[Analysis of Good Corporate Governance and Risk of Money Laundering: Terrorism Financing (ML/TF) at Securities Crowdfunding (SCF) in Indonesia ]]>
<![CDATA[Bandono, Bayu]]>;
<![CDATA[Setijanto, A. Dewo]]>
<![CDATA[ The International Journal of Financial Systems Vol. 3 No. 1 (2025) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v3i1.37
<![CDATA[We conducted a qualitative analysis method based on the results of a survey on governance and Anti-Money Laundering – Counter-Terrorism Financing (AML-CFT) addressed to each company implementing the SCF. In order to find out to what extent the implementation of governance and AML-CFT has been implemented by the SCF organizing companies, the questions in this research questionnaire are based on several aspects of governance and AML-CFT. This study analyzes the implementation of governance by SCF to find out and evaluate the extent to which the SCF companies are prepared to support a sustainable SCF industry, and the readiness to adequate infrastructure, including the Technical Guidelines for the Implementation of AML-CFT. Based on the survey results from 10 aspects of corporate governance, not all SCF implement good corporate governance. Furthermore, AML CFT implementation to prevent ML/FT risks also has not been fully carried out by SCF.]]>
<![CDATA[Implementing Innovative Credit Scoring (ICS) for Credit Risk Assessment and Loan Origination ]]>
<![CDATA[Supriadi, Iman]]>;
<![CDATA[Maghfiroh, Rahma Ulfa]]>;
<![CDATA[Abadi, Rukhul]]>
<![CDATA[ The International Journal of Financial Systems Vol. 3 No. 1 (2025) ]]>
Publisher : <![CDATA[Otoritas Jasa Keuangan ]]>
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DOI: 10.61459/ijfs.v3i1.36
<![CDATA[This research aims to analyze the implementation of Innovative Credit Scoring (ICS) in the financial industry through case studies of banks and fintech startups. This research uses a qualitative approach with case studies as the primary research design. The results show that ICS can improve process efficiency, scoring accuracy, and inclusiveness of credit access. ICS has significant practical implications, including improved efficiency, more accurate risk assessment, and more inclusive access to credit. Recommendations include cooperation with technology companies, regulatory oversight, attention to ethical aspects and algorithm bias, and developing a validation framework.]]>
