The Influence of Sharia Governance Quality on the Digital Performance of Sharia Banks

Nur Hasanah, Syafina Aprilliana, Rayo Jafa Alfarizi, Radita Ayi Widasari, Malwajariah Saragi

Abstract


This study examines the influence of Sharia governance quality on the digital
performance of Islamic banks amidst the accelerating digital transformation in the Islamic finance
industry. The main objective of this manuscript is to examine whether strong Sharia governance
mechanisms, such as the effectiveness of the Sharia Supervisory Board, the internal Sharia review
system, compliance processes, and the level of transparency, contribute to improved digital
banking performance. This study uses a quantitative approach with a panel data design obtained
from Islamic banks operating in several selected countries over a certain period. Digital
performance is measured using various indicators, including the level of digital service adoption,
the growth of online-based transactions, and the development of technological innovation. The
data are analyzed using multiple regression methods to assess the relationship between Sharia
governance quality and the digital performance of Islamic banks. The results show that higher
quality Sharia governance has a positive and significant influence on improving digital
performance. Banks with strong Sharia supervision tend to gain greater customer trust, encourage
the adoption of digital services, and generate sustainable digital innovation. This study concludes
that Sharia governance plays a role not only as a compliance instrument but also as a strategic
driver of the digital competitiveness of Islamic banking.


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