Readiness of Islamic Financial Institutions in Indonesia to Handle Data Security Risks in the Digital Era

Abstract

This study explores how ready Islamic financial institutions in Indonesia are to face data security risks amid rapid digitalization. As technology transforms banking services, particularly from 2015 to 2019, new risks such as hacking, data breaches, and fraud emerge. Using a qualitative method with NVivo software, this research analyzes interviews and regulatory documents. Findings show progress in adopting technologies like firewalls and encryption, yet gaps remain in resources, expertise, and regulatory alignment. Strengthening technology, regulation, employee training, and customer awareness is crucial. Collaboration with fintech and regulators is also vital. This study highlights the importance of enhancing data security in Indonesia’s Islamic financial institutions during the digital era.