Fintech, Digital Banking, and Profitability Under Macroeconomic Pressure: Evaluating Regulatory and Institutional Implications for Indonesia’s Banking System

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Published Sep 23, 2026
https://doi.org/10.21098/jcli.v5i3.360

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Vol. 5 No. 3 (2026)

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Sri Sulasmiyati
Universitas Brawijaya
Adilla Sari Siregar
Universitas Brawijaya

Abstract

The digital banking era has introduced risks and opportunities that significantly affect bank profitability. This study examines 28 banks listed on the Indonesia Stock Exchange (IDX) between 2020 and 2022, focusing on the influence of credit risk, digital banking, and fintech on profitability, measured in this study by Return on Assets (ROA). Employing panel data analysis through EViews 12, two regression models were tested, one excluding and one including GDP as a control variable. Comparative results underscore Non-Performing Loans (NPLs) as the most consistent determinant, exerting a significant negative effect on ROA. While peerto-peer (P2P) lending initially appeared to hinder profitability, its impact diminished once macroeconomic conditions were controlled for. Moreover, although mobile banking adoption continues to expand, its immediate contribution to profitability remains statistically insignificant within this sample. Overall, the findings highlight credit risk as the primary concern, suggesting that stronger regulatory frameworks and enhanced collaboration between banks and fintech firms are essential to safeguarding financial stability. These insights emphasise the need for policymakers and banking executives to prioritise credit risk management while fostering a cooperative ecosystem to navigate the complexities of the digital transformation.

Keywords: credit risk, digital banking, financial technology, macroeconomics, profitability, regulatory governance

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How to Cite
Sulasmiyati, S., & Sari Siregar, A. (2026). Fintech, Digital Banking, and Profitability Under Macroeconomic Pressure: Evaluating Regulatory and Institutional Implications for Indonesia’s Banking System. Journal of Central Banking Law and Institutions, 5(3), 521–554. https://doi.org/10.21098/jcli.v5i3.360

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