IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/126280.html
   My bibliography  Save this paper

Digitalization, Emerging Technologies, and Financial Stability: Challenges and Opportunities for the Indonesian Banking Sector and Beyond

Author

Listed:
  • Jameaba, Muyanja Ssenyonga

Abstract

Today’s financial institutions have to adapt to changing business environment, increasingly demanding and differentiated customer preferences, and digitalization and technological changes. Using a documentary analysis approach, the article navigates the implications of the adoption of distributed ledger technology (BCT) on functions and performance of the general banking sector and financial system stability. Results underscore the role of DLT adoption in fundamentally changing the financial service development and delivery landscape, operations, providers, regulatory regime, and performance. DLT adoption is envisaged to trigger the entry of new non-bank providers, facilitate the development of collaborative financial innovations and operations, adoption of new business models that support open banking principles, maintain the leveraging of Big Data and data analytics. Consequently, banks have a diversified customer base, strengthened capacity and capabilities to leverage customer experience , fostering the development and deployment of financial innovations that bolster competitiveness. Moreover, DLT adoption has the potential to enhance the integrity and authenticity of financial service delivery, reduce vulnerability to cyber insecurity and financial fraud, foster decentralized authentication of financial transactions, increase operational efficiency, lower compliance cost, shorten onboarding of new product offers and customers, accelerate new product development and deployment. Moreover, DLT adoption enables traditional banks to protect their interest and non-interest income sources from new and nimbler players, bolsters banks’ financial intermediation and monetary policy transmission functions, widens banks’ ability to provide wealth custodianship services, fosters the provision of financial payments services to wider, diversified and transboundary clientele, and strengthen bank’s role in maintaining financial system stability

Suggested Citation

  • Jameaba, Muyanja Ssenyonga, 2024. "Digitalization, Emerging Technologies, and Financial Stability: Challenges and Opportunities for the Indonesian Banking Sector and Beyond," MPRA Paper 126280, University Library of Munich, Germany, revised 26 Sep 2025.
    • Handle: RePEc:pra:mprapa:126280
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/126280/1/MPRA_paper_126280.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stijn Claessens & M. Ayhan Kose & Luc Laeven & Fabián Valencia, 2013. "Understanding Financial Crises: Causes, Consequences, and Policy Responses," CAMA Working Papers 2013-05, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Wallis, Joe & Dollery, Brian, 2001. "Government Failure, Social Capital and the Appropriateness of the New Zealand Model for Public Sector Reform in Developing Countries," World Development, Elsevier, vol. 29(2), pages 245-263, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stijn Claessens & M. Ayhan Kose, 2013. "Financial Crises: Explanations, Types and Implications," CAMA Working Papers 2013-06, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Chau-kiu Cheung & Karoline Anita Anderson & Wangnong Liao, 2024. "Intergenerational Respect, Support for the Societal System, and Morale," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 171(1), pages 237-258, January.
    3. Michele Manna & Stefano Nobili, 2023. "Banks' holdings of and trading in government bonds," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 257-283, January.
    4. Stijn Claessens & M. Ayhan Kose & Luc Laeven & Fabián Valencia, 2013. "Understanding Financial Crises: Causes, Consequences, and Policy Responses," CAMA Working Papers 2013-05, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    5. Yasin Mimir & Lorenzo Ricci, 2024. "Financial imbalances and macroeconomic tail risks: A structural regime-switching investigation," Working Papers 64, European Stability Mechanism, revised 15 Nov 2024.
    6. Piotr Ciżkowicz & Andrzej Rzońcaz, 2017. "Are Major Central Banks Blinded By The Analytical Elegance Of Their Models? Possible Costs Of Unconventional Monetary Policy Measures," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(01), pages 87-108, March.
    7. S. Franceschini & G. Marletto, 2017. "The dynamics of social capital during public participation: new knowledge from an on-going monitoring," Working Paper CRENoS 201706, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    8. Toma Sorin-George & Gradinaru Catalin, 2018. "Too Big To Fail Banks In The Age Of Globalization," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 0, pages 131-136, December.
    9. Siddharth Sharma & Hernan Winkler, 2018. "The labour market effects of financial crises : The role of temporary contracts in Central and Western Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(1), pages 35-60, January.
    10. Godwin Awio & Deryl Northcott & Stewart Lawrence, 2011. "Social capital and accountability in grass‐roots NGOs," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 24(1), pages 63-92, January.
    11. Michael Devereux & Niels Johannesen & John Vella, 2019. "Can Taxes Tame the Banks? Evidence from the European Bank Levies," The Economic Journal, Royal Economic Society, vol. 129(624), pages 3058-3091.
    12. Ouyang, Alice Y. & Wang, Jifan, 2022. "Shadow banking, macroprudential policy, and bank stability: Evidence from China’s wealth management product market," Journal of Asian Economics, Elsevier, vol. 78(C).
    13. Friebel, Rocco & Yoo, Katelyn Jison & Maynou, Laia, 2022. "Opioid abuse and austerity: Evidence on health service use and mortality in England," Social Science & Medicine, Elsevier, vol. 298(C).
    14. Connie Kivuti & Dr. Arbogast Akidiva, 2025. "Role of Government in Public Sector: Focus on Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(7), pages 5835-5839, July.
    15. Oussama Abi Younes & Leila Dagher & Ibrahim Jamali & Paul Makdissi, 2024. "Quantifying Turbulence: Introducing a Multi-crises Impact Index for Lebanon," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 175(1), pages 1-24, October.
    16. Stijn Claessens & M. Ayhan Kose, 2013. "Financial Crises: Review and Evidence," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 13(3), pages 1-23.
    17. ROTARU, Livia Maria, 2014. "The Financial Crisis – Explaining The Costs," Journal of Financial and Monetary Economics, Centre of Financial and Monetary Research "Victor Slavescu", vol. 1(1), pages 187-193.
    18. Reza Roshanpour & Amirreza Keyghobadi & Ali Abdi & Mohammad Ehsanbakhsh, 2025. "Enhancing inflation forecasting across short- and long-term horizons in IRAN: a hybrid approach integrating machine learning, deep learning, ARIMA, and optimized nonlinear grey Bernoulli model," SN Business & Economics, Springer, vol. 5(6), pages 1-21, June.
    19. Rhys Andrews, 2007. "Civic Culture and Public Service Failure: An Empirical Exploration," Urban Studies, Urban Studies Journal Limited, vol. 44(4), pages 845-863, April.
    20. Samba Mbaye & Ms. Marialuz Moreno Badia & Kyungla Chae, 2018. "Bailing Out the People? When Private Debt Becomes Public," IMF Working Papers 2018/141, International Monetary Fund.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:126280. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.