The Effect of Bank Compliance with Anti-Money Laundering (AML) Regulations on the Reputation of Indonesian Islamic Banks
DOI:
https://doi.org/10.70992/7rbj3978Keywords:
Anti-Money Laundering, Bank Compliance, Bank Reputation, Islamic BankingAbstract
The strengthening of Anti-Money Laundering (AML) regulations and the increasing risk of financial crimes have positioned AML compliance as a strategic issue in maintaining the reputation of the banking industry, including Islamic banking. This study aims to analyze the effect of Bank Syariah Indonesia’s compliance with AML regulations on bank reputation, both in aggregate and through its dimensions, namely Know Your Customer (KYC), Customer Due Diligence and Enhanced Due Diligence (CDD/EDD), suspicious transaction reporting, and AML training and compliance culture. This study employs a quantitative approach with an explanatory research design and a survey method. Data were collected through structured questionnaires administered to 150 employees of Bank Syariah Indonesia who are directly involved in compliance, risk management, internal audit, and AML-related operational functions. Data analysis was conducted using Partial Least Squares–Structural Equation Modeling (PLS-SEM) to assess validity, reliability, and structural relationships among variables. The results indicate that AML compliance has a positive and significant effect on the reputation of Bank Syariah Indonesia, with the model demonstrating moderate to strong predictive power. All dimensions of AML compliance significantly contribute to bank reputation, with AML training and compliance culture showing the strongest effect. These findings confirm that AML compliance functions not only as a regulatory obligation but also as a strategic governance mechanism that strengthens trust, legitimacy, and institutional reputation in Islamic banking. This study contributes theoretically by reinforcing the relevance of Stakeholder Theory, Legitimacy Theory, and Agency Theory in the context of Islamic banking, while practically offering insights for bank management and regulators in designing AML compliance policies oriented toward sustainability and reputational enhancement. This study aims to explore customer perceptions of green banking services provided by Bank Syariah Indonesia through an e-business platform. Using a descriptive qualitative approach, this study employs observation, interviews, and documentation to understand customer experiences and attitudes. The results show that the majority of customers understand the concept of green banking, although there are differences in understanding regarding its implementation in digital services. Customers who are more familiar with digital technology tend to understand the implementation of green banking better. Most feel comfortable using Bank Syariah Indonesia's digital services because of the convenience, speed, and transparent reporting features related to environmentally friendly products. However, some customers doubt the significant impact of their actions on sustainability. Customer perceptions of social and environmental benefits are greatly influenced by how the bank communicates its commitment to sustainability.
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