Determinants of Islamic banking products and services adoption in Morocco: a conceptual framework

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amal El Mallouli ◽  
Hassan Sassi
Keyword(s):  
Conceptual Framework ◽  
Perceived Risk ◽  
Relative Advantage ◽  
Islamic Banking ◽  
Extensive Literature ◽  
Islamic Banks ◽  
Research Model ◽  
Adoption Studies ◽  
Content Type ◽  
Doi Theory

Purpose The Moroccan monetary authorities have implemented an Islamic banking system since 2017 as an alternative to the conventional system. However, the adoption of Islamic banking products and services is not widely accepted by customers. The purpose of this study is to propose a conceptual framework to understand the determinants of Islamic banking products and services adoption in Morocco. Design/methodology/approach This study develops a conceptual framework based on the diffusion of innovation theory (DOI). Thus, with reference to an extensive literature review done regarding adoption studies, the proposed research model integrates perceived attributes of innovation (relative advantage, compatibility, complexity and observability) suggested by the DOI theory. It also integrates other relevant variables that should be considered in the context of this study. These include knowledge, perceived risk and customer involvement. Findings The proposed conceptual framework demonstrates and justifies the relevance and the applicability of Rogers’ DOI to understand consumer decisions to adopt an innovation in general as well as Islamic banks in particular. Originality/value Several studies have examined the factors influencing the adoption of Islamic banks; however, those carried out in the Moroccan context remain very limited. The majority of these studies examine the intention to adopt in the future, whereas the present study seeks to establish a conceptual research model that examines the determinants of current adoption of Islamic banking in Morocco and the continuity of this adoption over time. The novelty of this study is to develop a modified model based on DOI theory which, according to the existing literature, has not yet been tested in the Moroccan context.

scholarly journals Acceptance of Islamic banking as innovation: a case of Pakistan

Humanomics ◽  
2017 ◽  
Vol 33 (4) ◽  
pp. 499-516 ◽  
Author(s):  
Muhammad Ali ◽  
Chin-Hong Puah
Keyword(s):  
Diffusion Of Innovation ◽  
Structural Equation ◽  
Relative Advantage ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Confirmatory Factor Analyses ◽  
Content Type ◽  
Islamic Bank ◽  
Bank Managers ◽  
Doi Theory

Purpose This study aims to investigate the factors that determine the customer adoption of Islamic banking in Pakistan. Design/methodology/approach This paper aims to use a sample of 540 Islamic bank customers located in the biggest city of Pakistan (Karachi). This study is based on the diffusion of innovation (DOI) theory and analyzed the role of five attributes (compatibility, relative advantage, complexity, observability and trialability) along with the consumer awareness about the customer adoption of Islamic banking. Additionally, the present research also considers Islamic banking as a new idea (innovation) in Pakistan under the framework of DOI theoretical assumptions. The exploratory and confirmatory factor analyses are applied to the sample data. The theoretical framework is then tested using structural equation modeling. Findings The findings of the study revealed that all five attributes of the DOI theory are positively and significantly related to the customer adoption of Islamic banking. The customer awareness also proved its importance in the hypothesized model by representing a positive and significant relationship. Originality/value The present study provides a useful guideline for the Islamic bank managers and the academicians to better understand the customer adoption of Islamic banking.

A conceptual framework for the adoption of Islamic banking in a pluralistic-secular nation

2018 ◽  
Vol 9 (4) ◽  
pp. 951-964 ◽  
Author(s):  
Precious Chikezie Ezeh ◽  
Anayo D. Nkamnebe
Keyword(s):  
Conceptual Framework ◽  
Information Quality ◽  
Relative Advantage ◽  
Islamic Banking ◽  
Financial Industry ◽  
Content Type ◽  
Customer Involvement ◽  
Islamic Bank ◽  
Promotional Efforts ◽  
Conceptual Study

Purpose Islamic banking is an emerging product in Nigeria; it has evolved as a new reality in the Nigerian financial scene since 2011. Thus, the purpose of this paper is to propose a conceptual framework for the study of Islamic banking adoption behavior among bank customers in Nigeria. Design/methodology/approach This study is a literature and theoretical review of past studies to develop a comprehensive framework for the study of Islamic banking adoption behavior in Nigeria. Findings In this conceptual study, the researcher identified 12 independent variables, namely, relative advantage, compatibility, complexity, observability, trialability, uncertainty, promotional efforts, awareness, customer involvement, perceived information quality, profit/loss sharing and religiosity, as suitable variables for the study of Islamic bank adoption in Nigeria. Practical implications As Islamic banking is an innovative and unique product, which differs from conventional banking, it is hopeful that upon validating the framework, it will provide useful insight on the adoption behavior of Islamic bank customers in Nigeria. Social implications This study will be useful to Islamic banks in gaining and maintaining their existing customer, and policymakers, regulators and other relevant stakeholders will be able to strategize in accordance with their respective assignments toward the development and growth of the Nigerian financial industry. Originality/Value Most previous studies concentrated on product attributes of innovation adoption. But, this current study inculcated the consumers’ attitude and perception toward adoption of Islamic banking. Thus, the authors then propose several factors that can influence adoption of Islamic banking in Nigeria.

scholarly journals Conceptual framework of internal Sharīʿah audit effectiveness factors in Islamic banks

2020 ◽  
Vol 12 (2) ◽  
pp. 171-193
Author(s):  
Latifah Algabry ◽  
Syed Musa Alhabshi ◽  
Younes Soualhi ◽  
Omar Alaeddin
Keyword(s):  
Conceptual Framework ◽  
Vital Role ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Audit Process ◽  
Content Type ◽  
Finance Industry ◽  
Governance Practices ◽  
Islamic Financial Institutions ◽  
Audit Effectiveness

Purpose The main purpose of this research is to figure out the most effective determinants that play a vital role in enhancing the effectiveness of the internal Sharīʿah audit in the Islamic banking industry. Design/methodology/approach This paper reviews the existing literature to build comprehensive knowledge that would assist in determining the main factors that impact on the effectiveness of Sharīʿah audit in Islamic banks. Findings This research proposes a conceptual framework of factors that impact on Sharīʿah audit effectiveness in IBs based on previously published studies. The proposed framework includes external and internal factors as well as internal Sharīʿah audit structure, process and requirements. Practical implications First, the regulators need to provide a detailed framework for Sharīʿah audit which covers the main requirements for effective Sharīʿah governance. Second, Islamic financial institutions (IFIs) need to pay more attention to following the Sharīʿah audit process in order to achieve the objective of effective Sharīʿah governance. Finally, the dearth of empirical research on the role and effectiveness of Sharīʿah audit in Islamic banking highlights the need to develop an appropriate methodology to enhance the study of the effectiveness of Sharīʿah governance practices. Originality/value The Sharīʿah ensures compliance with its rules and regulations and enhances the soundness and credibility of the Islamic finance industry. This study identifies a number of issues that require further investigation in order to establish a better system of Sharīʿah audit and to identify the factors that affect Sharīʿah auditing practices. This paper is unique in covering the main elements that have influence on the effectiveness of Sharīʿah audit and proposes them in one framework.

scholarly journals The antecedents of Muslim customers’ intention to invest in an Islamic bank’s term deposits: evidence from a Muslim majority country

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sri Rahayu Hijrah Hati ◽  
Sigit Sulistiyo Wibowo ◽  
Anya Safira
Keyword(s):  
Perceived Risk ◽  
Online Survey ◽  
Perceived Value ◽  
Perceived Quality ◽  
Equation Modeling ◽  
Product Knowledge ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank

Purpose The purpose of this study is to examine the impacts of product knowledge, perceived quality, perceived risk and perceived value on customers’ intention to invest in Islamic Banks. This study specifically examines an Islamic bank’s term deposits. Design/methodology/approach Structural equation modeling was used to analyze the data collected from 217 customers of an Islamic bank in Indonesia using an online survey. Findings This study highlights the central and dual roles of perceived risk as both the independent and the intervening variable that mediates the relationship between product knowledge and Muslim customer intention to invest in an Islamic bank’s term deposits. Research limitations/implications This study only investigates term deposits as one type of investment in Islamic banks. This study contributes to the literature by examining the role of product knowledge, perceived quality, perceived risk and perceived value on Muslim customer intention to invest in Islamic term deposits. Practical implications The results of this study highlight the requirement for Islamic banks to educate customers to improve the depositors’ product knowledge because Muslim customers’ risk and value perception and intention are strongly influenced by product knowledge. Originality/value The investigation of perceived risk is particularly relevant for Islamic financial products because of the inherent nature of risk sharing in Islamic finance. This study investigates the role of product knowledge in influencing the Muslim customers’ perception of risk, quality, value and their intention to invest in Islamic bank term deposits. Ideally, the profit loss sharing concept (PLS) should be applied; however, in this context, revenue sharing is applied because of Indonesia’s central bank regulation.

Loyalty towards Islamic banking: service quality, emotional or religious driven?

2019 ◽  
Vol 11 (1) ◽  
pp. 66-80 ◽  
Author(s):  
Dwi Suhartanto ◽  
Christopher Gan ◽  
Ira Siti Sarah ◽  
Setiawan Setiawan
Keyword(s):  
Service Quality ◽  
Customer Loyalty ◽  
Structural Equation ◽  
Islamic Banking ◽  
Emotional Attachment ◽  
Islamic Banks ◽  
Content Type ◽  
Perceived Service Quality ◽  
Islamic Bank ◽  
Bank Managers

Purpose This paper aims to integrate and examine three loyalty routes (i.e. service quality, emotional attachment and religiosity) in developing customer loyalty towards Islamic banking. Design/methodology/approach Data were collected from 412 Islamic bank customers from Indonesia. Variance-based structural equation modelling was applied to evaluate the association between service quality, emotional attachment, religiosity and customer loyalty. Findings This study reveals that customer loyalty is more driven by emotional attachment and religiosity rather than by perceived service quality. Although not directly affecting customer loyalty, service quality strengthens customer satisfaction towards Islamic banks. Practical implications This study provides an opportunity for Islamic bank managers to increase their customer loyalty through the development of emotional attachment and religiosity. To improve customer loyalty, this study suggests that Islamic banks have to provide prompt, accurate and non-personal service. It is also important for Islamic bank managers to keep the bank operation compliant with the Sharia law. Originality/value This study is the first attempt to assess the three loyalty routes simultaneously in influencing customer loyalty.

Is Islamic bank profitability driven by same forces as conventional banks?

2016 ◽  
Vol 9 (1) ◽  
pp. 46-66 ◽  
Author(s):  
Hajer Zarrouk ◽  
Khoutem Ben Jedidia ◽  
Mouna Moualhi
Keyword(s):  
Dynamic Panel Data ◽  
Islamic Banking ◽  
Subprime Crisis ◽  
Islamic Banks ◽  
Mena Region ◽  
Bank Profitability ◽  
Content Type ◽  
Large Sample ◽  
Islamic Bank ◽  
Conventional Banks

Purpose The purpose of this paper is to ascertain whether Islamic bank profitability is driven by same forces as those driving conventional banking in the Middle East and North Africa (MENA) region. Distinguished by its principles in conformity with sharia, Islamic banking is different from conventional banking, which is likely to affect profitability. Design/methodology/approach The paper builds on a dynamic panel data model to identify the banks’ specific determinants and the macroeconomic factors influencing the profitability of a large sample of 51 Islamic banks operating in the MENA region from 1994 to 2012. The system-generalized method of moment estimators are applied. Findings The findings reveal that profitability is positively affected by banks’ cost-effectiveness, asset quality and level of capitalization. The results also indicate that non-financing activities allow Islamic banks to earn higher profits. Islamic banks perform better in environments where the gross domestic product and investment are high. There is evidence of several elements of similarities between determinants of the profitability for Islamic and conventional banks. The inflation rate, however, is negatively associated with Islamic bank profitability. Practical Implications The authors conclude that profitability determinants did not differ significantly between Islamic and conventional banks. Many factors are deemed the same in explaining the profitability of conventional as well as Islamic banks. The findings reported in the current paper might be of interest for policy makers. It is recommended to better implement non-financing activities to improve Islamic bank profitability. Originality/value Unlike the previous empirical research, this empirical investigation assesses the issue whether Islamic banks profitability is influenced by same factors as conventional model. It enriches the literature in this regard by considering the specificities of Islamic banking to identify the determinants of profitability. Moreover, this study considers a large sample (51 Islamic banks) through a different selection of countries/banks than previous studies. In addition, the period of study considers the subprime crisis insofar it ranges from 1994 to 2012. Hence, this broader study allows the authors to draw more consistent conclusions.

The consumers’ commitment and materialism on Islamic banking: the role of religiosity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Junaidi Junaidi ◽  
Ready Wicaksono ◽  
Hamka Hamka
Keyword(s):  
Structural Equation ◽  
Survey Study ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Positive Effects ◽  
Islamic Bank ◽  
Muslim People ◽  
The Impact

Purpose This paper aims to investigate whether and how religiosity (e.g. extrinsic and intrinsic) influences the mediator variables (consumers’ commitment and materialism) in the Islamic bank consumers context. It also examines how the mediators should be influence consumers’ preferences. Design/methodology/approach In total, 658 Muslim people and Islamic bank consumers were recruited for a survey study and structural equation modeling was used to test the research hypotheses. Findings The empirical results indicate that religiosity (e.g. extrinsic and intrinsic) has significant and positive effects on consumers’ commitment and materialism, whereas intrinsic religiosity has no significant effect on consumers’ commitment which subsequently influences consumers’ preference. Furthermore, mediator variables (e.g. consumers’ commitment and consumers’ materialism) have partial mediators between religiosity and consumers’ preferences. Research limitations/implications The current study was limited to Indonesian Muslim people; there is a future need to study consumers’ attitudes and engagement in religious products and services (e.g. Islamic brands). It is can help practitioners, regulators and researchers to observe the dynamic behavior to elaborate on the impact of religion and Islamic products on consumers’ preference. Practical implications The bank managers and regulators should enhance the information of products and services Islamic banks and the difference principle between conventional banks. Moreover, enlighten the consumers about the principle operation of Islamic banks from the perspective of marketing and religiosity. Originality/value This study contributes to consumers’ behavior literature and, specifically, for the decision-making process through developing and testing a model of religious determinants toward Islamic bank products, as well as offers new insights into the determinants of religion and consumers’ decision process toward Islamic banking.

Drawing ethical mentation in Islamic banks; addressing operational lines heterogeneity with special reference to Al-Ghazali’s ethical philosophy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shinaj Valangattil Shamsudheen ◽  
Saiful Azhar Rosly ◽  
Syed Abdul Hamid Aljunid
Keyword(s):  
Decision Making ◽  
Special Reference ◽  
United Arab Emirates ◽  
Partial Least Square ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Ethical Philosophy ◽  
Divine Knowledge

Purpose This study aims to examine the decision-making behaviour of Islamic banking practitioners of the United Arab Emirates with special reference to the operational line heterogeneity by employing factors that are religious in nature such as intellect, satanic force and divine knowledge as encapsulated in al-Ghazali’s ethical philosophy. Design/methodology/approach A total of 337 samples were collected from the Islamic banking practitioners in the United Arab Emirates using a purposive sampling technique, and the empirical analysis was conducted with the measures of model fit and bootstrapping technique using Partial least square Structural equation modelling and multi-group analysis. Findings The empirical findings reveal that the dedicated use of intellect in making decisions related to ethical issues where desires and emotions tend to overwhelm reason and human choices. While divine knowledge is found ineffective guidance of the intellect, the element of satanic force is found significantly impacting decision-making. As the lack of religious consciousness is evident among respondents, higher exposure to operational risk is expected. These findings were found identical across the Islamic banking practitioners in different lines of operations. Research limitations/implications The span of the study is limited to a single country. Future studies are recommended to replicate the study to more markets where the share of Islamic finance is significant. Practical implications Findings of the study highly suggest respective authorities of Islamic financial institutions to intensify the capacity-building programs on the foundation of faith which includes Islamic thought and worldview, to enhance the corporate ethical decision-making. Moreover, equal importance should be given to all the banking practitioners regardless of line of business operations. Originality/value With undue emphasis is given to the juristic (fiqh) aspects of Shariah compliance in the Islamic banking and finance industry, less has been attempted to explore its ethical dimension (akhlaq) in the compliance parameters that leave a relatively large gap to address prevailing unethical practices in Islamic finance institutions. Findings from this study can be useful as a warning to the Islamic banking firms to enhance the sense of God-fearing and improve existing measures in the organisation in mitigating operational risks that may arise from people or system and consequently ensure the smooth governance of the Islamic banks.

Identifying the gaps between customer expectations and perceptions on service quality dimensions of Islamic banks in Malaysia

2015 ◽  
Vol 7 (4) ◽  
pp. 424-441 ◽  
Author(s):  
Rafikul Islam ◽  
Selim Ahmed ◽  
Dzuljastri Abdul Razak
Keyword(s):  
Service Quality ◽  
Age Groups ◽  
Educational Background ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Customer Expectations ◽  
Banking Service ◽  
Significant Difference

Purpose – This paper aims to identify the gaps and differences between customer expectations and perceptions on service quality of Islamic banks in Malaysia based on six dimensions of service quality, namely, reliability, responsiveness, assurance, empathy, tangibles and Islamic Shari’ah compliance. Design/methodology/approach – This study surveyed 179 customers who have first-hand experience with Islamic banking services in Malaysia. The research data were analysed using reliability analysis, independent samples t-test and one-way analysis of variance. Findings – The results indicated that customers’ perceptions failed to meet their expectations on the service quality of Islamic banks in Malaysia. The results also indicated that those customers (respondents) aged below 30 years have higher expectations on empathy from the Islamic banking service compared to other age groups. However, there is no significant difference between customer expectations and perceptions of Islamic banking service quality based on educational background and occupation. Research limitations/implications – This research focused solely on Islamic banks in Malaysia and thus the results might not be applicable for other conventional banks. Originality/value – The findings are expected to provide guidelines for enhancing the satisfaction level of clients of the Islamic banking system in Malaysia and other countries.

Are Islamic banks different? The application of the Radical Affinity Index

2019 ◽  
Vol 12 (1) ◽  
pp. 2-29 ◽  
Author(s):  
Leire San-Jose ◽  
Jon Cuesta
Keyword(s):  
Great Britain ◽  
Design Methodology ◽  
Islamic Banking ◽  
Ethical Dimension ◽  
Islamic Banks ◽  
Ethical Perspective ◽  
Content Type ◽  
Social Commitment ◽  
Practical Implications ◽  
Ethical View

Purpose The purpose of this paper is to extend the literature on Islamic banking by examining their ethical dimension using transparency, placement of assets, guarantees and participation from Radical Affinity Index. Design/methodology/approach To this end, a sample of 20 Islamic banks from 13 countries (Bahrain, Saudi Arabia, Malaysia, Pakistan, Kuwait, Tanzania, Great Britain, Oman, Iraq, Egypt, Bangladesh and Qatar) was used. Findings The results are robust to ethical effects. The evidence suggests that among Islamic banks, at least some of them could improve their ethical requirements of the Sharia; they obtained lower scores than ethical banks in terms of RAI variables (transparency, placement of assets, guarantees and participation). Research limitations/implications It is used a random sample rather than population with the limitations that entails. The variables in the index are based on ethical perspective; then, the index is applied in Islamic banking but with the ethical view limitation. Practical implications The Islamic banks have the option to increase their transparency including further information regarding the beneficiaries of the benevolent funds; moreover, it would offer a clearer view about their ethical and social commitment towards society. Originality/value Additionally, this paper broadens the scope of the literature by analysing the determinants of Islamic banking around ethical dimensions of financial entities.

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