ISLAMIC BANKING IN THE REGIONS: CHALLENGES AND PROSPECTS FOR ENHANCING SAVINGS INTEREST RATES

In this research, the author will analyse the factors that influence people's interest in saving in Islamic banks, especially in the regions. Some of the factors to be analysed include financial literacy, trust level, location, income, and perception of profit sharing. Therefore, innovation in Islamic banking services, including the provision of mobile banking applications that comply with sharia principles, can be one of the effective strategies to increase the attractiveness and interest of the public in saving at Islamic banks. This research adopts a mixed approach, which includes both qualitative and quantitative methods, to explore the impact of financial literacy, trust, and perceived profit sharing on interest in saving in Islamic banks. This approach was chosen in order to gain a deeper understanding of the factors that influence interest in saving in Islamic banks. This research reveals that financial literacy and location have no significant effect on people's interest in saving in Islamic banks. In contrast, factors such as public trust, income, and perception of the profit-sharing system show a positive and significant influence. These findings suggest that in order to increase interest in saving in Islamic banks, financial institutions need to focus more on building public trust as well as providing a deeper understanding of the products and services they offer.