The Impact of Technological, Administrative, and Financial Transformations on the Financial and Operational Performance of Islamic Banks: A Field Study in the City of Zliten

Abstract

This study aims to analyze the impact of digital transformation on improving the financial performance of Islamic banks. It examines the role of modern financial technologies in enhancing operational efficiency, reducing costs, accelerating transaction processing, improving the quality of banking services, and boosting customer satisfaction and loyalty. This, in turn, empowers Islamic banks to achieve more sustainable and competitive financial performance. The study is based on the premise that digital transformation is no longer merely a technological option for Islamic banks, but rather a strategic imperative linked to their ability to adapt to the rapidly changing banking environment and enhance their efficiency and competitiveness, while adhering to the requirements of Sharia compliance. The study employs a descriptive-analytical approach, analyzing relevant literature and previous studies on digital transformation, financial technology, and the financial performance of Islamic banks. It also analyzes a range of indicators related to efficiency, profitability, and service quality. The study concludes that digital transformation contributes positively to improving the financial performance of Islamic banks by reducing operating costs, optimizing resource utilization, increasing the speed and accuracy of banking operations, developing financial products and services, and enhancing the customer experience.  The results also showed that employing technologies such as artificial intelligence, cloud computing, data analytics, blockchain, and fintech can support banking innovation, risk management, and enhanced competitiveness. The study recommends adopting an integrated digital transformation strategy, investing in technological infrastructure and human resources, and strengthening cybersecurity and digital governance to achieve a balance between technological innovation, Sharia compliance, and financial sustainability.