Modern Money and Banking

Final Project Presentation

Research Paper
Presented by: Nimra Shahzad (LCM-4013)
Zoha Imran (LCM-4022)
Rafia Imran (LCM-4015)
Jameel Raza (LCM-3994)
Presented to:
Mam Momina Sajid
 Topic:

Research Paper:
The Role of Digital Banking in Taking the Opportunities
and Challenges of Sharia Banks in the Digital Era
 Banking

 A bank is a financial institution that

accepts deposits from the public
and creates a demand deposit while
simultaneously making loans.
Lending activities can be directly
performed by the bank or indirectly
through capital markets.
Variables:
 Digital Banking (Independent Variable )

 Sharia Banking/ Islamic Banking (Dependent Variable)

 Obstacles (Moderating Variable )

 Opportunities (Moderating Variable)

 Digital Banking:

The Digital Banking definition is banking done

through the digital platform, doing away with
all the paperwork like cheques, pay-in slips,
Demand Drafts, and so on. It means availability
of all banking activities online.
Sharia Banking/ Islamic Banking:

 Islamic banking is defined as banking system which is in

consonance with the spirit, ethos and value system of
Islam and governed by the principles laid down by Islamic
Sharia. Interest free banking is a narrow concept denoting
a number of banking instruments or operations which
avoid interest.
 Obstacles:
An obstacle is an object, thing, action
or situation that causes an obstruction.
Different types of obstacles include
physical, economic, biopsychosocial,
cultural, political, technological and
military
 Opportunities of Digital Banking:

 Today's online banking customers enjoy instant

access from their computer or mobile device to a
full range of services, allowing you to: Check
balances on accounts and view records of your
transactions. Pay bills automatically each month
with easy-to-set-up auto payment. Transfer funds
between accounts.
Opportunities and Challenges of digital banking in Islamic Banking:

 Securing Social Media Communications

 Evolving Away from Legacy Applications

 Solving Security Issues at Scale

 Breaking Down Silos and Mitigating Risks

 Choosing Between Bricks-and-Mortar, Digital, or Both

 Securing Social Media Communications

 Utilizing social media to accelerate client communications presents a

couple of the biggest digital banking challenges ever security and
compliance. It’s also alarmingly easy for someone to post something
that’s misguided at best, or a regulatory violation at worst. Moreover,
you can’t afford to leave your social channels open to malicious
intrusions or staff negligence.
 Securing social media channels should be a priority. All
communications should go through a centralized monitoring system
that automatically detects violations of corporate policy and mitigates
them before they enter the wild.
 EVOLVING AWAY FROM LEGACY APPLICATIONS

 The lack of technological competence in many banks is alarming, and

consumers want more than ever to enjoy an experience that
traditional banking systems simply can’t offer. Many big banking
systems, for example, are built using the COBOL programming
language, which has been around for over 60 years! These legacy
systems simply weren’t designed for today’s connected digital
environment, making back-office technology in desperate need of a
refresh.
 Solving Security Issues at Scale

 Aside from securing social communication channels, the security of the

IT infrastructure and all that data it contains remains to be one of the
biggest digital transformation challenges faced by banks undergoing or
considering digital transformation.

 There was a time when IT security was relatively easy. You’d simply
install a firewall and be done with it. That’s certainly not true anymore.
 Breaking Down Silos and Mitigating Risks

 Banks have long been siloed organizations. Different departments with their own
goals using disparate systems. This inevitably leads to stunted growth, limited
scalability, and decreased customer satisfaction. In fact, more traditional banks
have built up an infamous reputation of giving customers a huge runaround
whenever they apply for a new service or receive support.

 The digital transformation in banking ushers in a unified platform that centralizes

data and connects multiple systems and departments. It effectively eliminates the
issues caused by silos.
 Choosing Between Bricks-and-Mortar, Digital, or Both

 Even with the advent and proliferation of digital technology, a significant

number of clients still prefer to transact inside an actual bank. That is a
fact. Players in the banking industry must see this as one of the persistent
digital banking challenges and opportunities for the banking sector: to find
that happy medium where they satisfy the needs of all their customers but
still be able to achieve transformation.
 Some customers like to check balances on their phones, but prefer to send
payments from a desktop. Others prefer the convenience of applying for a
loan using a quick online questionnaire. Still, more than two thirds of
consumers still consider it important to have a local branch nearby.
 Type of research:

This research design uses a qualitative approach with

a phenomenological approach which aims to identify
the opportunities and challenges faced by Islamic
banks in facing the digital era.
 Analysis of Research:
 Islamic banks will have a tremendous opportunity to promote social
contacts and provide ease of transaction processing to customers after
digital banking. But apart from that, Islamic banks continue to face
challenges such as intense competition between traditional banks and
Islamic banks and the lack of public understanding of internet banking
used in the banking industry, even after entering digital banking. In this
study, researchers collaborate with Islamic banks in the digital era to
provide good cooperation within the framework of Sharia law:
institutions, Talim demonstrations, mosques, and all things Islamic
 Conclusion:
 Bank preparation in the current digital era, namely providing fast, practical and
uninterrupted digital services.

 Today's Islamic banks are in the era of digital banking, especially because in
today's society the majority of Indonesian Muslims need a simple and fast process
to enable transactions that save time and money.

 The efforts of Islamic banks in facing the digital banking era are socializing and
encouraging the introduction of Islamic banking functions that are still based on
sharia principles and the provisions of Allah SWT.