DOES START-UP FINTECH AFFECT THE PROFITABILITY RATIO OF ISLAMIC BANKS? CASE STUDIES OF THREE STATE-OWNED ISLAMIC BANKS

The development of financial technology in the financial services sector provides benefits and conveniences, especially in the banking services sector. In overcoming this threat, the banking industry, especially Islamic banking, initiated a strategy by collaborating with financial technology. As banks controlled by the government, state-owned banks, namely Bank Mandiri Syariah, Bank Negara Indonesia Syariah, and Bank Rakyat Indonesia Syariah, took these steps to increase the company's profitability. This study aims to analyze the effect of Financial Technology (Fintech) on the profitability of the three banks. This research is a descriptive study with a quantitative approach by comparing the profitability ratios of banks for the 2015-2020 period that have collaborated with fintech. In this study, the data normality test and Paired T-Test were carried out to compare before and after seeing fintech start-ups. The results showed that based on the analysis of ROA, ROE, BOPO, and NPM at three banks, it was found that there was no significant difference after pressure with fintech.

The development of financial technology in the financial services sector that provides benefits and convenience for its users can be a threat to the banking sector, especially Islamic banking. Compared to financial sector services through financial technology, funding services through the banking industry are considered more complicated. In addition, banking regulations are notoriously rigid and convoluted. As a result, the public is more interested in financial services offered by financial technology than funding services from banks.
To overcome this threat, the banking industry initiated a strategy. The strategy is to link banking, especially sharia, with financial technology. In integrating the Islamic banking industry with financial technology, Islamic banking needs to make developments in the technology sector while increasing the financing portfolio as a source of income for Islamic banks. Because banking digitalization will impact reducing margins and affecting the profitability of the bank itself (Yanuar, 2019). The increase in the bank's portfolio will also increase the profit for the bank. Then the rise in bank profits will also impact expanding opportunities for Islamic banks to have long-term investments, namely by using financial technology in other banking processes (Yulia, 2019).
The benefits of Islamic banking by collaborating with financial technology have been stated in research conducted by Bella Gita, Inayah Aulia, and Irma Muzdalifa (2018). The study explained that after collaborating with financial technology, Islamic financial institutions, Islamic banking will be able to expand business actors, especially MSMEs, in enjoying the financial services offered. In addition, MSME actors can also apply for financing and request capital directly in the broader scope, only by carrying out the process through electronic media, without attending the nearest bank branch office. In this way, MSMEs and other business actors who enjoy these financial services will increase financial inclusion and increase the professionalism of the Islamic banking industry.
Collaboration between Islamic banking and digital financial sector services (financial technology) will make it easier for the public to access the products served by Islamic banking. Then, customers will feel more comfortable and more consistent in conducting transactions using Islamic banking services. Thus, it is hoped that this collaboration will increase the number of Third Party Fund (DPK) customers and Islamic banking funding, thereby increasing the profitability of the Islamic bank (Ridwan, 2018).
Profitability or profitability is the most powerful thing for the banking industry to succeed or fail in banking itself. The ability of banks to generate profits at banks is assessed based on the profitability ratio (Sutrisno, 2015). If a bank's profitability shows a high percentage, then the bank is considered to have had a good performance as well.

Islamic Banking Financial Technology
Financial technology (Fintech) brings many benefits, both in non-banking financial services and in banking. Among these benefits, fintech helps Islamic banks process product marketing data and business operations quickly and accurately and provides financial assistance (Prastika, 2019). In addition, the most significant impact for Islamic banking is that fintech can reduce transparency or asymmetric information to increase the efficiency of financial services at Islamic banks (Cupian & Akbar, 2020). banking services that can be accessed via SMS using codes, for example, account balance information, payments, and others. 5) Phone Banking, banking services customers can access via telephone (Prastika, 2019).

Banking Profitability
Profitability is one indicator to assess the performance of management in a company in managing wealth seen from the amount of profit earned. If the profitability is high, the management performance in a company can be said to be effective. If the profitability is low, it can be said that the company's management performance is not good enough (Puspawangi & Hendratno, 2020). According to Darsono, profitability is the ability of management to earn profits by increasing revenue and reducing the burden of income, expanding market share, and eliminating non-value-added activities (Prastika, 2019). In Islam, profitability is described in Q.S An-Nahl: 14.
To describe the ability of banks to earn a profit, a ratio is needed. The percentages used by banks in their profitability ratios are (Prastika,  The operating expense ratio is a comparison between operating expenses and operating income. In addition, it is also used to identify the level of efficiency and ability of the bank in carrying out its operations. BOPO formula: The Net Profit Margin ratio is used to identify the percentage of net profit on net sales to evaluate the efficiency of a company in controlling selling expenses. NPM formula: = Net Profit After Tax Sales 100%

Previous Studies
There have been several studies that have examined the influence of fintech on the profitability of Islamic banking, including a journal written by Cupian and Farid Fauzy Akbar with the title "Analysis of Differences in Sharia Banking Profitability Level Before

Nature and Type of Research
This research is descriptive. That is, it describes and describes the data that has been collected as it is without making a general conclusion. Furthermore, this study uses a quantitative approach by presenting data in numbers and then testing based on the established hypothesis (Sugiyono, 2017).

Data Source
This study uses secondary data sources obtained from records in the form of financial statements of several banks involved in this study and several published journals (Sujarweni, . Secondary data is used in financial ratios from the annual financial information obtained from each bank's official website. The data taken in this study is for five years, namely in 2016-2020. This period is considered sufficient to cover the development of Islamic banking profitability, influenced by the existence of Financial Technology, which continues to develop in Indonesia.

Population and Sample
The

Methods and Data Analysis
This study aims to determine the level of bank profitability by comparing Return On

Result
Analyzing the profitability ratios used by assessing the profitability criteria before and after collaborating with fintech.  Based on the table above, it can be seen that all the data shows that there is no significant difference between the two data with unequal treatment, which means that there is no effect after collaborating with fintech start-ups.

Effect of Financial Technology on Return on Assets (ROA)
The study results found that there was an increase in the value of the ROA ratio of Bank Mandiri Syariah before and after collaborating with fintech start-ups, from 0.58% to 4.07%. That means Bank Mandiri Syariah increased net profit after collaborating with  (2021), which states that there is a decrease in the analysis value of the ROA variable, and there is no significant difference in BRI Syariah Bank after collaborating with Fintech. The same thing was also stated by Sinambela and Rohani (2017) that the existence of internet banking services at banks does not have a significant effect in terms of banking financial performance as measured by ROA and ROE, which are caused by, among others, the use of internet banking services for banking transactions is not optimal, as well as problems in security, long-term maintenance and the bank's ability to maintain internet banking.
For BNI Syariah, it is known that the value of the ROA ratio analysis has increased from 1.39% to 1.52% with very healthy criteria. This shows an increase in net profit at BNI Syariah after collaborating with fintech. And the results of the study also state that there is no significant effect on BNI Syariah after collaborating with fintech, seen from the significance value, which is 0.408, which is greater than the 0.05 level of significance. Mobile Banking harms bank ROA. This is due to bank customers' incomplete use of mobile banking facilities.

Effect of Financial Technology on Return on Equity (ROE)
The study results found that at Bank Mandiri Syariah, the value of the ROE ratio analysis showed an increase from 5.85% to 12.97%. This means that banks can maximize their capital to obtain net profits and satisfy the interests of shareholders or investors after collaborating with fintech. As for the level of significance in the ROE ratio, it was found that there was no significant difference after the bank cooperated with fintech, indicated by a significance value of 0.099 greater than 0.05. It can be concluded that there is only a change or difference in the value of the ROE analysis. However, there is no significant difference after the bank cooperates with fintech. This is in line with Puspawangi and Hendratno's (2020) research, which states that fintech used by state-owned banks does not significantly impact the ROE ratio. There are only differences but no significant differences. Kristianti and Tulenan's (2021) research states that fintech is an innovation in banking, not a nuisance.
For this reason, it needs to be used as an opportunity to develop fintech services to improve financial performance, especially to earn profits.
At BRI Syariah, the ROE ratio analysis value before collaborating with fintech was 5.90%, and after working with fintech, it was 3.03%. This indicates a decrease in the level of the ROE ratio. This means that BRI Syariah cannot maximize the equity in generating profits and is not concerned with investor satisfaction after collaborating with fintech. And the level of significance shows that there is no significant difference after collaborating with fintech. This aligns with Ahmad Nor Solikhin's (2021) research, which also stated no considerable difference after BRI Syariah collaborated with fintech. There was a decrease in the value of the ROE ratio. Likewise, Yohani and Dita (2019) study states that internet banking does not significantly influence financial performance because internet banking use is not yet maximized.
For BNI Syariah, the ROE ratio analysis shows a decrease in the ROE level, as evidenced by the ROE ratio value before collaborating with fintech, which was 11.58% to 11.35% after collaborating with fintech. And the influence of fintech on BNI Syariah is that there is no significant difference with a significance value of 0.824, which is greater than 0.05. This research is in line with Sinambela and Rohani's study (2017) that the existence of there is no significant difference.

The Effect of Financial Technology on Net Profit Margin (NPM)
The results showed that the average NPM ratio at Bank Mandiri Syariah increased from 4.97% to 13.21% after collaborating with fintech. This is in line with Chiesa Utomo Sukmoto and Hendratno's (2018) research, which states that the increase in NPM positively impacts companies that implement information technology. And the influence of fintech on the NPM of Bank Mandiri Syariah is that there is no significant difference seen from the significance value of 0.090, which is greater than the 0.05 level of significance.
In BRI Syariah, the value of the NPM ratio analysis shows a decrease after collaborating with fintech, from 6.87% before teaming to 5.41% after collaborating. This research aligns with Ilhami and Marlius (2020)  Kampuang Tangah has decreased, which means the ability of banks to earn profits has reduced. And there is no significant difference seen from the significance value of 0.250 greater than 0.05. That means bank management in obtaining profits through managing bank operational costs must be considered not to harm banks (Ilhami & Marlius, 2020).

Conclusion
Based on the testing and exposure above, it can be concluded that: a. In the ROA ratio variable based on the analysis of the average value before and after collaborating with fintech, it was found that there was at Bank Mandiri Syariah and Bank Negara Indonesia (BNI) Syariah an increase in the percentage value of ROA.
That means the existence of fintech has a positive impact on generating net profits for banks. And at Bank Rakyat Indonesia (BRI) Syariah, the analysis value of the average ROA has decreased, which is caused by one of them being the less optimal use of fintech services. In the three banks, it was found that there were no significant differences after collaborating with fintech. b. In the ROE ratio variable based on the analysis of the average value before and after collaborating with fintech, it is known that at Bank Mandiri Syariah, the ROE ratio increased after collaborating with fintech. This means that Bank Mandiri Syariah can optimize its capital to generate net profits and satisfy the interests of shareholders.
Meanwhile, in BNI Syariah and BRI Syariah, the analysis of the average ROE value has decreased, which means that the bank cannot maximize capital to generate net profit and ignores the interests of investors. Of the three banks, there is no significant difference in the level of profitability of the ROE ratio after collaborating with fintech. For this reason, to optimize capital in generating net profit and investor satisfaction, banks need to take advantage of fintech and develop fintech services to maximize financial performance.
c. c. On the BOPO ratio variable based on the analysis of the average value before and after collaborating with fintech, it was concluded that Bank Mandiri Syariah and BNI Syariah experienced a decrease in the BOPO percentage level after collaborating with fintech. This indicates that banks' level of efficiency and ability in operational activities is increasing. It positively impacts profitability because banks can reduce their operating expenses. Meanwhile, at BRI Syariah, after working with fintech, the BOPO ratio level has increased due to increased operating expenses. The three banks showed no significant differences after collaborating with fintech. Banks need to take full advantage of fintech services to reduce operational costs.
d. In the NPM ratio variable based on the analysis of the average before and after collaborating with fintech, it is known that there is an increase in the NPM value at Bank Mandiri Syariah, which means that fintech has a positive impact on banks in generating profits. Meanwhile, at BRI Syariah and BNI Syariah, the percentage level of NPM has decreased. That means the ability of banks to generate profits also reduces. And it is known that the three banks do not have significant differences after collaborating with fintech. For this reason, banks must optimize fintech in managing operational costs to earn profits.