Digital transformation, intellectual capital, and Sharia compliance in Indonesian Islamic banking

Abstract

Purpose – This study aims to systematically synthesize and evaluate existing empirical evidence on the performance effects of digital transformation and intellectual capital in Indonesian Islamic banking, with particular attention to their complementarity and the role of institutional and regulatory contexts. It also incorporates Islamic law viewpoints by examining how Sharia governance and compliance considerations shape digital economy practices and performance outcomes.
Methodology – Adopting a systematic literature review approach guided by PRISMA, this study reviews peer-reviewed articles indexed in Scopus database. Studies were screened using explicit inclusion and exclusion criteria and analyzed thematically across four domains: digital transformation pathways to performance and intellectual capital–performance linkages.
Findings – The review finds that digital transformation enhances efficiency, innovation, sustainability, and financial inclusion in Islamic banking. Intellectual capital—human, structural, and relational—emerges as a critical enabling capability that converts digital initiatives into both financial and Sharia-aligned performance outcomes.
Implications – For practitioners and policymakers, the findings highlight the importance of aligning digital strategies with investments in intellectual capital and supportive governance structures. For scholars, this review underscores the need to integrate capability-based and institutional perspectives.
Originality – This study offers one of the first comprehensive, theory-integrated syntheses of digital transformation and intellectual capital in Indonesian Islamic banking, advancing a holistic capability-based framework that explains performance heterogeneity beyond technology adoption alone, while integrating an Islamic law perspective to link Islamic digital economy practices in Sharia banking with socio-economic sustainability, financial inclusion, customer trust, and institutional legitimacy.