Sharia Compliance and Islamic Digital Banking: Empowering SMEs in Indonesia

This study explores the role of Sharia compliance in enhancing the adoption and use of Islamic digital banking services in Indonesia, with particular attention to its implications for Small and Medium Enterprises (SMEs). Using a modified UTAUT 3 model, this research incorporates Sharia compliance and trust as critical variables influencing user behavior. A quantitative approach, including an online survey with 129 respondents, was used, and data were analyzed with PLS-SEM. The findings demonstrate that Sharia compliance significantly impacts actual usage but does not moderate the relationship between intention and behavior. Trust and personal innovation also play pivotal roles in driving adoption, while factors such as facilitating conditions, hedonic motivation, and price value were found to have minimal influence. These insights underscore the importance of aligning Islamic digital banking services with Sharia principles to meet the needs of SMEs, ultimately fostering greater trust, efficiency, and technological innovation. The study offers practical recommendations for Islamic banks to better engage SMEs by focusing on Sharia compliance and user trust in their digital services.