Optimising Operational Excellence in the Digital Age: A Study of Digital Banking Service Transformation in Indonesian Islamic Banks

Digital transformation has become a top priority in the banking industry, including Indonesian Islamic Banks (Bank Syariah Indonesia, BSI), in an effort to improve service quality and customer experience. This research aims to explore the role of operational excellence in improving the quality of digital banking services at BSI. The research method used is a qualitative approach with data collection techniques in the form of observation, interviews, and documentation analysis. This research involved 121 respondents who are BSI customers between the ages of 19 and 23 and who have a student education background. The results showed that the implementation of operational excellence at BSI had a positive impact on the tangible dimension (digital transaction features) and empathy (development of Islamic features), with satisfaction levels of 58.2% and 63.6%, respectively. However, challenges are still evident in the assurance dimension, where the satisfaction level only reached 50.2%, indicating the need for an improved cybersecurity system. In addition, service responsiveness needs to be improved, especially on live chat and call centre features, to meet the expectations of customers who want faster and more efficient services. The research also underlines the importance of collaboration with fintech companies to accelerate digital service innovation. Strategic recommendations include strengthening security systems, accelerating customer service responses with AI technology, and developing features that are more relevant to the younger customer segment. With the right strategy, BSI can maintain its lead in the digital Islamic banking industry and expand its market share.