Customer perception regarding Sharī‘ah compliance of Islamic banking sector of Pakistan

2016 ◽  
Vol 7 (4) ◽  
pp. 282-303 ◽  
Author(s):  
Lutfullah Saqib ◽  
Muhammad Aitisam Farooq ◽  
Aliya Mueen Zafar
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Banking Sector ◽  
Public Awareness ◽  
Interactive Effect ◽  
Islamic Banking ◽  
Main Stream ◽  
Islamic Banks ◽  
Content Type ◽  
The Impact

Purpose This paper aims to analyze the impact of Sharī‘ah compliance perception on customer satisfaction in Islamic banking sector of Pakistan. Design/methodology/approach Primary data were collected from 242 account holders of Islamic banks and Islamic banking branches of conventional commercial banks and analyzed by correlation and regression through self-administered questionnaires based on SERVQUAL model. Findings Significant moderating effects of Sharī‘ah compliance perception on the relation between service quality and customer satisfaction have been identified. Research limitations/implications As a cross-sectional study with convenience sampling restricts generalizability and because financial benefits offered by banks were not included as a variable, the scope of this study is limited to service quality only. Future research may focus on the moderating effect of Sharī‘ah compliance perception through longitudinal study with larger sample size in a multi-cultural environment. Practical implications Results of this paper recommend Islamic banks to focus on their core strength “Sharī‘ah compliance” while developing their product/service and building marketing strategies. Moreover, assurance of high-quality services will sustain such strategies against competition with conventional banks. Social implications Islamic banks must primarily develop their brand through extensive communication and public awareness programs regarding Sharī‘ah compliance standards in terms of products/services, policy/procedures, code of conduct and Sharī‘ah board. Originality/value This research examines moderating role of Sharī‘ah compliance perception between service quality and customer satisfaction in Islamic banking sector of an Islamic Republic with dual banking system. This interactive effect of Sharī‘ah compliance perception has not been found as an overriding theme in any of the main stream journals/articles. Therefore, this study fills this gap.

The impact of customer service quality on customer satisfaction in Islamic banking

2017 ◽  
Vol 8 (4) ◽  
pp. 595-604 ◽  
Author(s):  
Mohamed Abdulnaser Janahi ◽  
Muneer Mohamed Saeed Al Mubarak
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Customer Service ◽  
Banking Sector ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Quality Dimensions ◽  
Service Quality Dimensions ◽  
The Impact

Purpose The purpose of this paper is to contribute to the Islamic banking literature by examining the impact of different factors of customer service quality on customer satisfaction. Design/methodology/approach The paper presents a model which is not frequently used in Islamic banking literature and shows relationships between six factors of customer service quality and customer satisfaction in the Islamic banking sector. Customers of five main Islamic banks are contributing in this study. Findings This paper demonstrates strong and positive relationships between the six main dimensions of customer service quality (Compliance, Assurance, Reliability, Tangibility, Empathy and Responsiveness) and customer satisfaction. Research limitations/implications The study may suffer from lack of generalization, as it is conducted in one country (Bahrain). It might also be useful to enlarge the study sample and include comparison between Islamic versus conventional banking with regard to service quality and customer satisfaction. Practical implications This paper can influence the current Islamic banks with regard to service quality with an ultimate aim of increasing customer satisfaction and retaining customers. Originality/value This study is one of the few that focus on effects of customer service quality dimensions on customer satisfaction in the Islamic banking sector. It reveals that, although customers pay special attention to Sharia’h laws (compliance) in their transactions with banks, the way services are delivered matters to them too.

Customer perceived service quality and loyalty in Islamic banks

2016 ◽  
Vol 28 (1) ◽  
pp. 62-78 ◽  
Author(s):  
Muhammad Kashif ◽  
Mohsin Abdur Rehman ◽  
Lina Pileliene
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Cultural Context ◽  
Structural Equation ◽  
Banking Sector ◽  
Retail Banking ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Cultural Perspective ◽  
Content Type

Purpose – There is a plethora of research which has dealt with service quality issues in various service organizations. But a few researchers have presented state of service quality from a cultural perspective, especially within an Asian cultural context. The purpose of this paper is to measure service quality of Pakistani Islamic banks through validating a culturally sensitive scale: PAKSERV. Furthermore, the path from service quality to customer loyalty has been presented through applying PAKSERV service quality scale. Design/methodology/approach – Following a positivist tradition, the service quality to loyalty path in Islamic banking sector of Pakistan is established. A self-administered survey was conducted to approach 300 Islamic bank customers in major cities of Pakistan. The respondents were purposefully selected based on their extent of using the retail banking services. The data were analysed through employing various quantitative measures such as correlation and structural equation modelling employing AMOS. Findings – The findings reveal that Pakistani Islamic banking customers are satisfied with the service quality offered. All the dimensions of PAKSERV are found to significantly contribute towards customer satisfaction and loyalty. However, major focus of customer is on the dimensions such as responsiveness and sincerity which are understandable in high-risk avoiding and moderately power-oriented Pakistani society. Originality/value – The research has been first of its type to present the validity of PAKSERV scale in a collectivist cultural context of Pakistan. Furthermore, the path from the customer satisfaction to loyalty by employing PAKSERV scale has been presented for the first time.

The impact of Islamic Shariah compliance on customer satisfaction in Islamic banking services: mediating role of service quality

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Selim Ahmed ◽  
Muhammad Mohiuddin ◽  
Mahfuzur Rahman ◽  
Kazi Md Tarique ◽  
Md. Azim
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Customer Service ◽  
Mediating Effect ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Banking Services ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to investigate the impact of Islamic Shariah compliance on customer satisfaction through the mediating effect of service quality in Islamic banking services. Design/methodology/approach A total of 334 completed and usable questionnaires were collected from customers of Islamic banks in Bangladesh to test the hypotheses. The data were analyzed using SmartPLS 3. Findings The findings of this study indicate that Islamic Shariah compliance has a positive and significant influence on service quality and customer satisfaction of Islamic banking services. The research findings also indicate that service quality partially mediate the relationship between Islamic Shariah compliance and customer satisfaction of Islamic banking services. Research limitations/implications This study only emphasized on the Islamic banking services of Bangladesh and thus findings of the present study may not be applicable to other service areas. Practical implications The implications of the research are twofold. First, a strong standardized effect of Islamic Shariah compliance on service quality implies that customers are very sensitive to Shariah compliance related to Islamic banking services. Next, maintaining service quality is another crucial aspect to satisfy customers of Islamic banks. Quality of services will only be materialized when all the promises made by the bank function accordingly. Therefore, strategy makers of Islamic banks should assess the customer service quality and satisfaction regularly to improve the overall service experience of customers. Originality/value Limited studies have been conducted to investigate the mediating effect of service quality on the relationship between Shariah compliance and customer satisfaction in Islamic banking services. This study provides valuable insights to Islamic bank to integrate the service quality along with Shariah compliance to enhance customer satisfaction.

Internal marketing, service quality and perceived customer satisfaction

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Leigh De Bruin ◽  
Mornay Roberts-Lombard ◽  
Christine De Meyer-Heydenrych
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Banking Industry ◽  
Marketing Mix ◽  
Internal Marketing ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Internal Process ◽  
Perceived Ability

Purpose This study aims to explore the extent to which internal marketing influences employees’ perceived ability to deliver service quality in the Islamic banking industry in Oman. Additionally, the influence of perceived service quality on perceived customer satisfaction is established. Design/methodology/approach Data was obtained from retail banking branch employees at the customer front line of Islamic banks in Oman using electronic and person-administered surveys, and 272 responses were deemed suitable for data analysis. The measurement and structural models were measured through structural equation modelling. Findings The findings show that internal promotion, internal process and internal purpose are enablers of employees’ perceived ability to deliver service quality in the Islamic banking industry of Oman. In addition, service quality was found to have a strong positive influence on perceived customer satisfaction in Islamic banks. Research limitations/implications This study demonstrates that internal product, internal price, internal promotion, internal process and internal purpose are influencers of service quality, and the latter has a direct relationship with perceived customer satisfaction in Islamic banking. Practical implications The findings can guide the Islamic banking sector in Oman on how internal marketing can foster service quality, ultimately leading to positive perceived customer satisfaction experiences. Originality/value The internal marketing mix model is predominately a Western model, which has been tested primarily in mature Western markets. This study reflects on ten internal marketing mix elements, which have been tested for the enablement of service quality and perceived customer satisfaction in Oman.

Customer satisfaction and loyalty in Malaysian Islamic banks:a PAKSERV investigation

2015 ◽  
Vol 33 (1) ◽  
pp. 23-40 ◽  
Author(s):  
Muahmmad Kashif ◽  
Sharifah Suzana Wan Shukran ◽  
Mohsin Abdul Rehman ◽  
Syamsulang Sarifuddin
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Cultural Context ◽  
Islamic Banking ◽  
Network Marketing ◽  
Content Type ◽  
Confirmatory Factor ◽  
The Impact ◽  
First Time ◽  
Customer Satisfaction And Loyalty

Purpose – The purpose of this paper is to examine the impact of PAKSERV measures on customer satisfaction and loyalty in the Malaysian Islamic banking context. Design/methodology/approach – The dimensionality of the PAKSERV scale is examined with confirmatory factor analysis. A survey approach is adopted to collect data from 300 Islamic banking customers in Kuching, Malaysia. Findings – Results reveal an excellent model fit for the PAKSERV scale in collectivist cultural context of Malaysia. All dimensions of PAKSERV are validated except reliability. The issue of non-validity of the reliability dimension in an Islamic banking context is explained by extant literature. Practical implications – Islamic banks are recommended to focus on all the PAKSERV scale dimensions to impart service quality. Given a collectivist cultural setting, a “network marketing” approach is recommended to maintain a desirable level of customer satisfaction and loyalty. Originality/value – The PAKSERV scale has been employed for the first time to investigate the service quality-loyalty path in a collectivist cultural context. The validity of the PAKSERV scale has been operationalized for the first time in a collectivist cultural context.

Does the tag “Islamic” help in customer satisfaction in dual banking sector?

2019 ◽  
Vol 10 (1) ◽  
pp. 138-149 ◽  
Author(s):  
Fayaz Ahmad Lone ◽  
Ulfat Rashid Bhat
Keyword(s):  
Customer Satisfaction ◽  
Banking Sector ◽  
Banking System ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Level Of Satisfaction ◽  
Alternative Approach ◽  
Future Strategy ◽  
Conventional Banks

Purpose The purpose of this paper is to find out the importance of the tag “Islamic” in the title of banks. This will help to determine the future strategy of Islamic banks, while expanding to the countries where Islamic banking is seen as a religious banking and not an as an alternative approach to the conventional banking. Design/methodology/approach Adopting convenience sampling, a total of 596 customers of both Islamic and conventional banks were surveyed from four regions of Saudi Arabia (Makkah, Madinah, Riyadh and Dammam) using a self-structured questionnaire on a five-point Likert scale. Findings The results concede that Islamic banks without the tag “Islamic” and conventional banks have same customer satisfaction. There are some factors other than the tag “Islamic” which are driving customers towards Islamic banking. Those factors include physical aspects of the bank, level of satisfaction with the services, dealing and attendance by the staff and safety and security of the bank. Besides, the application of fundamental principles of Islamic banking works as a key motivation for customer satisfaction with Islamic banking. Practical implications Applying the tag “Islamic” is not as important as implementing the principles of Islamic banking. Islamic banks can survive and compete well even without using the “Islamic” tag if they implement the prime principles of Islamic banking and work on improving the factors highlighted by this study. This study can prove to be helpful in the expansion of Islamic banking in the countries where religious banking is not generally preferred by customers. Originality/value This is the first study to find out the customer satisfaction in a dual banking system (comprising of conventional banks and Islamic banks that do not use the tag “Islamic”), thereby filling the existing gap in the Islamic banking literature.

Impact of service quality, corporate image and customer satisfaction towards customers’ perceived value in the banking sector in Pakistan

2015 ◽  
Vol 33 (4) ◽  
pp. 442-456 ◽  
Author(s):  
Hashim Zameer ◽  
Anam Tara ◽  
Uzma Kausar ◽  
Aisha Mohsin
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Banking Sector ◽  
Perceived Value ◽  
Corporate Image ◽  
Content Type ◽  
Independent Variables ◽  
Customer Perceived Value ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to explore the impact of services quality, customer satisfaction and corporate image on customer perceived value in the banking sector of Pakistan. Design/methodology/approach – A model is developed to show the relationship between dependent and independent variables taken from the existing literature. The data are collected from 200 respondents taken from the five major cities of Pakistan using structured questionnaire. Correlation and regression are applied to estimate the relationship between variables and find out the extent to which the independent variables have impact on the dependent variable. Findings – Results show that there is a positive relation between the service quality, customer satisfaction and corporate image. It is also analyzed by the results that service quality and customer satisfaction have high impact on the customer perceived value where corporate image also effect the customer perceived value. Originality/value – This paper identified the impact of service quality, customer satisfaction and corporate image on the customer perceived value that helps the services sector especially banks how they can improve the customer perceived value through improving their service quality, customer satisfaction and corporate image.

scholarly journals Customer satisfaction in the digital era: evidence from Islamic banking

2020 ◽  
Author(s):  
Ghazi zouari ◽  
Marwa Abdelhedi
Keyword(s):  
Factor Analysis ◽  
Customer Satisfaction ◽  
Service Quality ◽  
Customer Service ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Five Dimensions ◽  
Islamic Bank ◽  
Digital Era ◽  
The Impact

Abstract PurposeBased upon an extended SERVQUAL model, this paper attempts to contribute to the Islamic banking literature by examining the impact of digitalization, as a service quality dimension, on customer satisfaction.Design/methodology/approachTwo dimensions, i.e. digitalization and compliance are added to the existing SERVQUAL model of five dimensions. Results are drawn from a self-completed survey of a convenience sample of 145 Tunisian Islamic bank customers for the year 2018. Factor analysis and regression analysis are used to determine factor structure and determine the impact of service quality dimensions, especially digitalization, on customer satisfaction in Islamic banking.FindingsThe factor analysis extracted five dimensions of service quality, i.e. confidence, compliance, digitalization, tangibles and human skills. The paper demonstrates a positive and significant relationship between the main dimensions of customer service quality and customer satisfaction, except for tangibles.Research limitations/implicationsAlthough the outcomes lend support to the extended SERVQUAL model, the results are derived based on a relatively small sample size in one country (Tunisia). This limits the generalizability of the study results. It might also be useful to enlarge the study sample and include a comparison between Islamic versus conventional banking about service quality and customer satisfaction.Managerial implications:To remain competitive, Tunisian Islamic banks need to pay attention to the way the services are delivered and not take it for granted that customers are only focusing on compliance. Dealing henceforth with Generation Y customers, they must persevere in bringing their customer service into the digital era.Originality/valueThis study is one of few which try to investigate the drivers of customer satisfaction for Islamic banks in a Digital Era. It reveals that although customers pay special attention to Sharia’ laws, the way services are delivered matters to them too. From now on, digital banking must appear among the Islamic bank features to stay relevant in the Digital Era.

State ownership and bank performance: conventional vs Islamic banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Turki Alshammari
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Positive Influence ◽  
State Ownership ◽  
Bank Performance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Banking Systems ◽  
The Impact

Purpose This paper aims to examine the effect of state ownership on bank performance for all banks in the Gulf Cooperation Council (GCC) countries during the period 2003 – 2018, for two distinct banking systems: the conventional and the Islamic banking systems. Design/methodology/approach To achieve the goal of the study, this paper uses a mean t-test to examine the mean difference of the related variables for both banking systems, and a regression test (using the GMM method) to explore the effect of state ownership on bank performance. Findings The most important result of the analysis is that state ownership has a significantly positive influence on bank performance for conventional banks but not for Islamic banks, in the GCC area. Originality/value This study adds to the scarce related literature comparative empirical results with respect to the impact of ownership on the performance of two different banking systems: the conventional system and the Islamic banking system in the GCC area. This study is likely to have implications for policymakers in terms of developing rules relevant to the governance of GCC’s two banking systems that can help to support the stability of the whole banking sector.

Strategic pricing by Islamic banks and the impact on customer satisfaction and behavioral intention

2020 ◽  
Vol 11 (9) ◽  
pp. 2017-2033
Author(s):  
Ali Rama
Keyword(s):  
Customer Satisfaction ◽  
Behavioral Intention ◽  
Relative Price ◽  
Islamic Banking ◽  
Decision Making Process ◽  
Islamic Banks ◽  
Price Expectations ◽  
Price Transparency ◽  
Content Type ◽  
The Impact

Purpose The study aims to capture customers’ different price expectations by constructing a multidimensional price perception in Islamic banking setting and the impact on customer satisfaction and behavioral intention, as a single price perception approach cannot reflect heterogeneity of price expectations. The study conceptualized customers’ price expectation into price reliability, price confidence, price transparency, relative price, price–quality ratio and price fairness. Design/methodology/approach An online questionnaire was distributed to Islamic banking customers in Indonesia to test seven proposed hypotheses of price perceptions on customer satisfaction and behavioral intention. The instrument used a five-point Likert-type scale to capture customer perception on the instrument variables and analyzed the functional relation of the model using multiple regression analysis. Findings Empirical findings reveal that customers experienced more price expectations in their banking decision-making process. The number and complexity of price expectations depend primarily on the customers’ interest, particularly on price transparency, relative price and price–quality ratio, and these dimensions affect satisfaction and behavioral intention. Islamic banking customers in Indonesia are highly aware of price transparency, have “relative thinking” on price differences and put price–quality ratio in their assessment. Research limitations/implications The study was conducted in Indonesian Islamic banking industry; the extension to other different countries may reveal difference in price complexity and implication to behavioral consequences. Any difference in customer attitude would bring managerial implication for different Islamic bank managers. Additionally, this study developed and examined five price dimensions, however, there may be additional price dimensions in different environment contexts. Further research is needed to identify any other price expectations that may affect customers’ behavior. Practical implications The results of this research allow bank practitioners to develop relevant pricing strategy to fulfil customers’ different price expectations in their decision-making process. Appropriate measures to different price expectations improve satisfaction, loyalty and, in turn, increase bank profits. Furthermore, this research provides useful information for future researchers in different settings. Originality/value This paper provides empirical analysis of pricing strategy by Indonesian Islamic banks and insights on customers’ experience toward different price expectations.

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