This paper investigates the relationship among digital financial literacy (DFL), current saving behavior, current spending behavior, and foresight of future spending and saving behavior among Indonesian millennials. This research uses structural equation modeling to estimate the relationship among the variables. The research surveyed millennials in the 25–40 age group in several urban areas of Java island. The survey collected information of the indicators constructing the latent variables. The results indicate that DFL is influenced by social-economic standing. DFL also positively affects the current saving and spending behavior. Moreover, the current saving and spending behavior contribute to the future saving and spending foresight. This research suggests policymaker to provide knowledge about DFL to the millennials.

This study investigates the relationship between fintech and banks and how this relationship is affected by the COVID-19 pandemic. We use monthly stock data of all banks consistently listed on the Indonesian Stock Exchange from February 2018 to March 2021. For fintech data, we use a total of four proxies that encompass both lending and borrowing aspects of peer-to-peer lending fintech. To provide robust results, we use five model specifications. Furthermore, we also estimate the models using both the fixed effect and the two-step system generalized method of moments estimators. To see the dynamics of the relationship between fintech and banks before and during the pandemic, we estimate one of our five models using half-yearly data for each semester from the second semester of 2018 to the second semester of 2020. Our fixed effect and two-step system generalized method of moments estimates indicate a relatively less negative impact of fintech on bigger banks. This relationship is further exemplified during the COVID-19 pandemic period. We argue that these findings have significant implications for the Indonesian financial authorities’ open banking strategy and for the future of the Indonesian financial system in general.

This study aims at investigating the impact of the banking industry’s concentration on the stability of Islamic commercial banks in Indonesia. This study used a single country setting of 14 Islamic-commercial banks in Indonesia from 2011 to 2020. The data utilized in this study comprised all Islamic-commercial banks' assets in Indonesia, excluding commercial banks with Islamic business units. The influence of concentration level on the stability of Islamic-commercial banks was investigated using a panel data model. According to Hausman's test, the fixed-effect model is more suitable than the random-effect model. The findings indicate that the “concentration-stability” hypothesis was supported-robust using two concentration level measurements: CR4 and HHI. It is implied that banks tended to be more stable at the higher competition level. From the bank’s specific characteristics, only the cost-to-income ratio significantly influenced the bank's stability, as expected. Other bank-specific characteristics, such as bank size, credit risk, and income diversity, had no substantial influence on observed bank stability. A robustness check was performed by estimating new models that included multiple control variables that did not change the effect of concentration level on the bank’s stability. This study adds to the literature by demonstrating the “concentration-stability” hypothesis in the Indonesian Islamic-commercial banking industry. Moreover, this study’s results confirm the previous study’s findings using different methods and measures of industry concentration. In addition, this study is relevant in the context of the merger action of three large Islamic commercial banks.

Given the unprecedentedness and scale of the COVID-19 pandemic, the impact and effectiveness of fiscal, monetary, and public health policies in response to the pandemic are largely unknown. This paper aims at presenting empirical evidence on the response of the financial sector to fiscal, monetary, and public health policies implemented during the pandemic. Using random effect estimation with data from 40 economies, we find that the financial sector does not respond significantly to fiscal stimulus, the monetary policy relaxation during the pandemic also has less magnitude of impact, stricter physical containment measures are also found to be positively and significantly affect financial sector performance.

This paper attempts to measure the financial stability for Islamic and conventional banks and compare the result of financial stability between the two kinds of banks. In this study, financial stability will be measured using z-scores. The data sample used in this study include four Indonesian Islamic banks and four Indonesian conventional banks, which is represent by two larger banks and two smaller ones. After z-score is calculated, descriptive statistic and stationarity tests were also conducted to compare the stability results for both banks. A comparative study shows that conventional banks is maybe more stable than Islamic banks. Regression analysis using fixed effect model were conducted to investigate the factors influencing banks stability. Regression result shows the factor which have a significant influence to banks stability are Islamic dummy, size of banks and cost to income ratio. Although other variables such us credit to asset ratio, income diversity and Islamic banks income diversity have no significant effect to banks stability, they have the correct signs.