Digital Transformation of Human Resources in Islamic Banking: The Role of Digital Leadership and Human Resource Analytics in Building a Digital Culture for Performance Improvement (A Case Study of Islamic Banks in South Sulawesi)

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Sulawesi — Digital Culture Determines the Digital Transformation of Islamic Banking Human Resources in South Sulawesi. A study conducted by M. Yusuf Alfian Rendra Anggoro KR from Universitas Muhammadiyah Makassar and published in January 2026 in the International Journal of Business and Applied Economics (IJBAE).

The study by M. Yusuf Alfian Rendra Anggoro KR of Universitas Muhammadiyah Makassar shows that digital culture is the strongest factor in improving employee performance in Islamic banks, while also highlighting the critical roles of digital leadership and the use of Shariah-based people analytics.

This research is important because, although the adoption of digital technology in Indonesia’s Islamic banking sector continues to increase, its impact on employee performance has not been evenly felt. Data from the Financial Services Authority (OJK) indicate that most Islamic banks have implemented digital technologies in human resource management, yet only a small proportion have experienced comprehensive performance improvements. This condition is also evident in South Sulawesi, a region with strong growth in Islamic banking assets but ongoing challenges in human resource adaptation to technology.

Challenges of HR Digitalization in Islamic Banking

In recent years, Islamic banks in South Sulawesi have grown rapidly alongside the expansion of Shariah-based economic activities and Islamic MSMEs. However, this growth has not always been matched by human resource readiness. Many employees continue to face gaps in digital competencies and resistance to change, particularly when technology is perceived as conflicting with the religious values they uphold.

National surveys show that most Islamic bank employees feel that digital leadership within their institutions has not fully encouraged innovation. At the same time, the use of artificial intelligence (AI) in recruitment and human resource management processes in Islamic banks in South Sulawesi still lags behind the national average. These conditions motivated the conduct of this study.

Field Research in 15 Islamic Banks

The study involved 178 employees from 15 Islamic banks in South Sulawesi, selected proportionally based on position and type of bank. Respondents were employees who had worked for at least one year and were directly involved in the use of digital systems such as HR Information Systems, people analytics, or digital collaboration platforms.

Data were collected through surveys and analyzed using statistical approaches to examine the relationships among four main factors: digital leadership, people analytics, digital culture, and employee performance. This approach enabled the researcher to assess not only the direct effects of technology and leadership, but also the role of work culture as a key mediating factor.

Digital Culture as the Decisive Factor

The results show that both digital leadership and people analytics have a positive effect on the formation of a digital culture in Islamic banks. However, the most striking finding is that digital culture has the strongest influence on employee performance, surpassing all other factors.

In the context of Islamic banking, digital culture does not merely refer to the use of technology, but also encompasses ways of thinking, work values, and employee attitudes toward digital innovation that are aligned with Islamic principles. When this culture is well established, employees are more receptive to technology, work more productively, and continue to uphold values of justice, transparency, and Shariah ethics.

The study also finds that digital culture acts as a bridge between digital leadership and people analytics in enhancing employee performance. In other words, technology and leadership will not deliver optimal results without the support of an appropriate work culture.

Integrating Technology with Local Values

The uniqueness of this study lies in its approach to integrating digital technology with Shariah values and the local wisdom of South Sulawesi. Work culture values such as siri’ na pacce—which emphasize dignity, solidarity, and social responsibility—are seen as relevant in strengthening digital culture within Islamic banking institutions.

According to the researcher, digital approaches that are sensitive to local and religious contexts are more readily accepted by employees. Technology is positioned not as a threat, but as a tool to improve work quality while also serving as a means of worship and social contribution.

Implications for Industry and Regulators

These findings offer practical implications for the Islamic banking industry. Banks are encouraged not only to invest in digital systems, but also to develop Shariah-based digital leadership, apply fair and transparent people analytics, and implement internal programs to build an inclusive digital culture.

For regulators such as OJK and Bank Indonesia, this study serves as an important reference in formulating policies for the digital transformation of human resources in Islamic banking. Incentives, AI ethics guidelines, and Shariah-based digital culture standards are considered necessary to ensure that transformation proceeds in balance between efficiency and Islamic values.

Author Profile

M. Yusuf Alfian Rendra Anggoro KR, S.E., M.M - Universitas Muhammadiyah Makassar

Research Source

Anggoro KR, M. Yusuf Alfian Rendra. Digital Transformation of Human Resources in Islamic Banking: The Role of Digital Leadership and People Analytics in Building a Digital Culture for Performance Improvement (A Study of Islamic Banks in South Sulawesi).
International Journal of Business and Applied Economics (IJBAE), Vol. 5 No. 1, 2026.
DOI: https://doi.org/10.55927/ijbae.v5i1.58
Official URL: https://nblformosapublisher.org/index.php/ijbae