Governance, Risk Management, Competition, and Bank Size on Islamic Compliance Risk

Purpose—This study examines the influence of Sharia governance, risk management, market competition, and bank size on Islamic law compliance risk, with regulatory quality positioned as a moderating variable. Design/methodology/approach—This study employed a quantitative explanatory design. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS. Findings—The findings show that Sharia governance, market competition, bank size, and regulatory quality reduce Islamic law compliance risk, while risk management requires stronger integration with Sharia control mechanisms. Regulatory quality functions more strongly as a direct institutional safeguard than as a moderating mechanism. Research limitations/implications—Future research should expand the model by including Sharia audit quality, ownership structure, digital banking risk, and comparative institutional settings. Practical implications— Islamic banks should strengthen Sharia supervision, compliance reporting, risk control integration, product governance, and regulatory enforcement. Originality/value—This study contributes to Islamic banking literature by developing an integrated compliance risk framework linking governance, risk management, competition, bank scale, and regulatory quality.