Transformation and Role of Indonesian Sharia Banks in Strengthening the National Sharia Banking Industry

Abstract

Bank Syariah Indonesia (BSI) is the result of a merger of three state-owned Islamic banks aimed at improving the competitiveness of the national Islamic banking industry. This study examines the transformation and role of Bank Syariah Indonesia (BSI) following the merger of three state-owned Islamic banks, which aims to strengthen the Islamic banking industry in Indonesia. This study uses a descriptive qualitative approach with secondary data analysis from BSI's annual reports, academic publications, and government policies related to the Islamic financial industry. The results of this study indicate that BSI has great potential in driving financial inclusion through digital innovation and international expansion, although it still faces challenges such as low Islamic financial literacy and competition with conventional banks. The merger is expected to improve BSI's operational efficiency and competitiveness, but its Islamic banking market share remains low compared to conventional banking. Data shows significant growth in BSI assets, reflecting public trust in Islamic banks. In addition, the importance of developing digital services such as BSI Mobile and global expansion into international markets is emphasized. This research provides valuable insights for the government and industry players in formulating more effective policies for the future development of Islamic banking, and emphasizes the need for stronger strategies to improve Islamic financial literacy and BSI competitiveness in the global market.