OPTIMIZING ISLAMIC BANKING THROUGH FINANCIAL SUSTAINABILITY

Abstract

This study aims to identify optimization strategies for Islamic banking with a focus on financial sustainability using the Analytic Network Process (ANP) approach, which provides a comprehensive analytical framework for the interconnected elements within the Islamic banking system. The study involved 65 respondents, consisting of academics, practitioners, and Islamic banking customers, offering diverse and relevant perspectives on the issues under investigation. Data were collected using structured questionnaires designed to gain an in-depth understanding of the factors influencing financial sustainability, including the dimensions of financial performance, environmental responsibility, and social impact. ANP analysis was conducted to determine strategic priorities that can be effectively implemented, taking into account the interactions among these key elements. The findings reveal that the financial performance dimension, encompassing operational efficiency, profitability, and risk management, serves as a critical foundation for achieving financial sustainability, while environmental responsibility emerges as an increasingly relevant supporting factor in the context of modern sustainability-oriented banking. Additionally, the social impact of Islamic banking activities, such as community empowerment and financial inclusion, constitutes an inseparable dimension in efforts to achieve long-term sustainability goals. These three elements are interrelated in a complex network that requires a holistic and integrative approach to formulate strategies that not only ensure financial stability but also foster positive contributions to society and the environment .