Although Indonesia is the world's largest Muslim-majority country, Indonesian consumers overwhelmingly prefer conventional banks to Islamic ones. A survey conducted in 2023 revealed that 61 percent of respondents use conventional banking services, compared with 35 percent who prefer Islamic banks.
Key factors influencing banking preferences
The relatively low adoption of Sharia banking services can be attributed to several reasons. In a 2023 survey, 44 percent of respondents said they were satisfied with their current banking services, while 40 percent saw little difference between conventional and Sharia banks. Reflecting this sentiment, Islamic banks held a modest 7.46 percent share of Indonesia's total banking assets.
Market dynamics in Indonesia's banking sector
The competition between conventional and Sharia banks in Indonesia is further influenced by the rapid rise of fintech and digital banking solutions. These platforms are reshaping the financial landscape by offering seamless, user-friendly services that appeal to tech-savvy consumers. Among the most popular Sharia banks, Bank Syariah Indonesia (BSI) leads with 51 percent of the respondents, followed by BCA Syariah at 22 percent, but the integration of digital services remains a key challenge.
Most used banks among Muslim consumers in Indonesia as of March 2023, by type
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Populix. (April 18, 2023). Most used banks among Muslim consumers in Indonesia as of March 2023, by type [Graph]. In Statista. Retrieved December 22, 2024, from https://www.statista.com/statistics/1404336/indonesia-popular-type-of-banks-for-muslim-consumers/
Populix. "Most used banks among Muslim consumers in Indonesia as of March 2023, by type." Chart. April 18, 2023. Statista. Accessed December 22, 2024. https://www.statista.com/statistics/1404336/indonesia-popular-type-of-banks-for-muslim-consumers/
Populix. (2023). Most used banks among Muslim consumers in Indonesia as of March 2023, by type. Statista. Statista Inc.. Accessed: December 22, 2024. https://www.statista.com/statistics/1404336/indonesia-popular-type-of-banks-for-muslim-consumers/
Populix. "Most Used Banks among Muslim Consumers in Indonesia as of March 2023, by Type." Statista, Statista Inc., 18 Apr 2023, https://www.statista.com/statistics/1404336/indonesia-popular-type-of-banks-for-muslim-consumers/
Populix, Most used banks among Muslim consumers in Indonesia as of March 2023, by type Statista, https://www.statista.com/statistics/1404336/indonesia-popular-type-of-banks-for-muslim-consumers/ (last visited December 22, 2024)
Most used banks among Muslim consumers in Indonesia as of March 2023, by type [Graph], Populix, April 18, 2023. [Online]. Available: https://www.statista.com/statistics/1404336/indonesia-popular-type-of-banks-for-muslim-consumers/
