Customers’ perceptions of FinTech adaptability in the Islamic banking sector: comparative study on Malaysia and Saudi Arabia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ibrahim Abiodun Oladapo ◽  
Manal Mohammed Hamoudah ◽  
Md. Mahmudul Alam ◽  
Olawale Rafiu Olaopa ◽  
Ruhaini Muda
Keyword(s):  
Saudi Arabia ◽  
Structural Equation ◽  
Banking Sector ◽  
Banking Industry ◽  
New Technology ◽  
Primary Data ◽  
Islamic Banking ◽  
Content Type ◽  
Islamic Bank ◽  
The Impact

Purpose This paper aims to compare perceptions of Islamic bank customers concerning FinTech services in Malaysia and Saudi Arabia. It also investigates the level to which customers are willing to adapt FinTech services. Design/methodology/approach Primary data was collected from May to September 2019 using a questionnaire to survey 102 Islamic bank customers in Malaysia and 147 in Saudi Arabia. The data are analyzed based on Structural Equation Modelling using the partial least squares approach. Findings The findings show that knowledge, attitude and subjective norms are the highly significant determining factors that influence customers’ opinions on adapting to new technology, but awareness demonstrates only a moderately positive effect. Moreover, the impact of these factors on the intention to adopt FinTech services significantly differs between Malaysian and Saudi Arabian customers. Originality/value This is an original study based on primary data on customers of Islamic banking in Malaysia and Saudi Arabia. It provides some novel insights into how the banking industry can boost customers’ confidence and enhance their patronage by adopting FinTech in their business operation model. These findings should be of value to senior management, policymakers and regulators in the banking industry in both Muslim and non-Muslim countries.

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.

Sharia’h practice at Islamic banks in Pakistan

2018 ◽  
Vol 9 (3) ◽  
pp. 274-289
Author(s):  
Muhammad Tariq Majeed ◽  
Abida Zainab
Keyword(s):  
Risk Sharing ◽  
Banking Sector ◽  
Islamic Law ◽  
Banking Industry ◽  
Supervisory Board ◽  
Primary Data ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type

PurposeIslamic banks provide an alternative financial system based on Sharia’h (Islamic law). However, critics argue that operation at Islamic banks is violating Sharia’h particularly in terms of provision of interest free services, risk sharing and legal contract. The purpose of this paper is to empirically evaluate the Sharia’h practice at Islamic banks in Pakistan by considering some basic principles of Sharia’h. Design/methodology/approachPrimary data are collected from 63 branches of Islamic banks in Pakistan. Questionnaire is used as an instrument. The study uses structural equation modeling that includes confirmatory factor analysis and regression analysis. Data are codified and analyzed using SPSS and Amos. FindingsThis study finds that Islamic banks are providing interest free services, ensuring that transactions and contracts offered by Islamic banks are legal and offering conflict-free environment to customers. In contrast, estimated results expose that Islamic banks are not sharing risk and Sharia’h supervisory board is not performing its role perfectly. Similarly, it is found that organization and distribution of zakat and qard-ul-hassan are weak at Islamic banks. Research limitations/implicationsData are collected from Islamabad federal capital of Pakistan that hold just 5 per cent share of Islamic banking industry. This small share may not provide true picture of Islamic banking sector. Practical implicationsTo ensure risk sharing, Islamic banking industry must consider the development of new modes of financing and innovation of more products based on Sharia’h. State Bank of Pakistan should ensure separate regulatory framework that enable Islamic banks to provide qard-ul-hassan, organize and allocate zakat. Originality/valueThis paper discusses the perception of bankers, who are actually the executors, about Shariah’s practices at Islamic banks in Pakistan. There are not many discussions on this topic that could be found, and hence this could be considered as a significant contribution by this paper to the existing literature of Islamic finance.

scholarly journals Discovering the linear relationship of service quality, satisfaction, attitude and loyalty for banks in Albaha, Saudi Arabia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Adil Zia
Keyword(s):  
Saudi Arabia ◽  
Service Quality ◽  
Linear Relationship ◽  
Multiple Regression ◽  
Customer Loyalty ◽  
Structural Equation ◽  
Primary Data ◽  
Content Type ◽  
Relationship Of ◽  
The Impact

Purpose This study aims to examine the factors that lead to loyalty in bank customers. It establishes a relationship of service quality (SQ) with satisfaction and attitude that leads to customer loyalty. The impact of SQ along with satisfaction and attitude on customer loyalty is explored. Design/methodology/approach Primary data was collected from 1,097 customers of the banking service. Structural equation modelling (SEM) and multiple regression analyses was used to analyse the data. The adaption of multiple regression and SEM for the analysis authenticates the similar findings in both the methods of analysis. Findings All the factors contribute to the formation of SQ. There exists a linear relationship of SQ, satisfaction and attitude in the formation of customer loyalty. Research limitations/implications Sample can be more diverse and collected from different cities as well. Similar studies are possible for diverse demographic groups such as gender, age, education and others. Practical implications The results of this study have significant implications for understanding customer loyalty for banks of Saudi Arabia. Originality/value This research attempts to explore the factors responsible for the SQ in banks of Saudi Arabia so as to establish a relationship between SQ, satisfaction, attitude and loyalty.

Improving consumers’ willingness to pay using social media activities

2018 ◽  
Vol 32 (7) ◽  
pp. 880-896 ◽  
Author(s):  
Pedro Torres ◽  
Mário Augusto ◽  
Elaine Wallace
Keyword(s):  
Social Media ◽  
Willingness To Pay ◽  
Structural Equation ◽  
Banking Sector ◽  
Structural Model ◽  
Banking Industry ◽  
Qualitative Comparative Analysis ◽  
Social Media Marketing ◽  
Content Type ◽  
The Impact

Purpose This study examines the impact of social media activities on consumers’ willingness to pay a premium price (WTPp) in the banking industry, and investigates the role of consumer-brand identification (CBI) on this relationship. For the first time, the effect of electronic word-of-mouth (eWOM) is considered separately from other social media marketing efforts (SMME). Design/methodology/approach Data from a sample of 145 banking customers that follow bank social networks was analysed using structural equation modelling and fuzzy-set qualitative comparative analysis (fsQCA) to test a proposed structural model. Findings Findings indicate that the effect of eWOM and SMME on WTPp is fully mediated by CBI. The results uncover a viable path to achieve WTPp in the banking industry, which includes the joint presence of SMME, eWOM and CBI. Research/limitations implications The study was conducted on the banking sector of Portugal. It is advocated that further research would investigate the results in other service sectors, across different countries. Practical implications Findings highlight the importance of social media marketing in banking. Results reveal opportunities for managers in the banking sector to enhance CBI and ultimately WTPp, through SMME and eWOM. Originality/value The study is the first to consider the influence of SMME and eWOM as separate antecedents of WTPp. The findings indicate that the effect of eWOM and SMME on WTPp is fully mediated by CBI. In particular, the results of the fsQCA indicate that the combined presence of SMME, eWOM and CBI, is sufficient to obtain WTPp.

Emergence of social media as new normal during COVID-19 pandemic: a study on innovative complaint handling procedures in the context of banking industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Durgesh Agnihotri ◽  
Kushagra Kulshreshtha ◽  
Vikas Tripathi
Keyword(s):  
Social Media ◽  
Structural Equation ◽  
Banking Sector ◽  
Banking Industry ◽  
Equation Modeling ◽  
Media Environment ◽  
Content Type ◽  
Complaint Handling ◽  
The Social ◽  
The Impact

Purpose Banking industry has no option but to remain observant and redraft the contagion playbook as per the situation evolves owing to COVID-19. Therefore, this study aims to develop a model to examine empirically how effectively complaints are handled to control customer retaliation and negative e-word of mouth (eWOM) in such a pandemic situation, where banking institutions are using social media as a key platform. Design/methodology/approach A self-administered questionnaire was distributed among 309 participants who had encountered service failure and experienced complaint handling on Facebook. This study draws upon prevailing literature to test a series of hypotheses through structural equation modeling. Findings The findings show that effective complaint handling has a negative influence on customer retaliation in the social media environment. As a result, customer retaliation was found to have a positive association with negative eWOM. Therefore, this study has revealed that effective complaint handling will lead to decrease in customer retaliation and negative eWOM. Practical implications This study carries an understanding of effective complaint handling efforts by leading banks in the social media environment during the COVID-19 pandemic. This study recommends that customized and effective efforts by the banks can influence customer retaliation and negative e-WOM. Originality/value The study is conducted during COVID-19 pandemic considering the impact of COVID-19 on banking sector, which is a new phenomenon. This study has highlighted how banks have modified their working methodology during pandemic situation by using Facebook as a prominent platform to redress customers’ issues and complaints.

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.

Gamification in banking: a review, synthesis and setting research agenda

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shilpa Chauhan ◽  
Asif Akhtar ◽  
Ashish Gupta
Keyword(s):  
Research Agenda ◽  
Banking Sector ◽  
Banking Industry ◽  
Psychological Theory ◽  
Future Research ◽  
Content Type ◽  
Bank Management ◽  
Customer Behaviour ◽  
The Future ◽  
The Impact

Purpose The objective of this paper is to explore and extend the existing literature on the use of gamification in banking. Design/methodology/approach Gamification is a new concept, further its application in banking is in a nascent stage both from the perspective of research and application. To systematise the limited literature and to draw the future research prospects, studies are presented based on theories, characteristics, context and methodologies framework. Findings The synthesis of the literature on gamification opened to a spectrum of areas to determine the future of gamification in the banking industry. The study emphasises the use of social and psychological theory building in the banking industry. Further, the research on game elements is an underexplored area in the banking domain, while they have well exploited in other contexts. Banking context needs more literature evidence, empirically tested and validated research methods to understand the personality traits and customer behaviour arising from the use of gamification. Practical implications For bank management, this study lays the impact of gamification in this era of digital banking. With the right mix of hedonic and utilitarian elements, bank management shall be able to boost financial literacy, improve saving habits, simplify banking products and strengthen knowledge updates among bank employees. Understanding the key elements and present status of research on gamification and their impact on customer behaviour development is crucial for the bank in building strategic advantage. Originality/value This study on gamification applied explicitly to the banking sector. With no clear application of the elements and mechanics of technology used in gamification, this study presents past literature in a systematised manner and draws the future research agenda of gamification in banking services.

Islamic bank selection criteria in Nigeria: a model development

2019 ◽  
Vol 11 (6) ◽  
pp. 1837-1849
Author(s):  
Precious Chikezie Ezeh ◽  
Anayo D. Nkamnebe
Keyword(s):  
Factor Analysis ◽  
Exploratory Factor Analysis ◽  
Selection Criteria ◽  
Model Development ◽  
Reliability And Validity ◽  
Primary Data ◽  
Islamic Banking ◽  
Islamic Ethics ◽  
Content Type ◽  
Islamic Bank

Purpose The purpose of this study is to develop a model for the study of Islamic bank choice and to test the significant importance of the constructs that influence bank customers to choose Islamic bank in a pluralistic-secular nation. Design/methodology/approach Total of 348 conventional and Islamic bank customers were sampled. Five-point Likert-type question containing 27 bank selection items was used in collecting primary data. Cronbach’s alpha, composite reliability and average variance extracted are used to test the reliability and validity of the instrument. Also various descriptive statistics, exploratory factor analysis and one sample T-test are equally used in analyzing the work. Findings Exploratory factor analysis identified four factors. They are Islamic ethics, convenience, Islamic bank services awareness and physical evidence. Furthermore, the factors that show significant importance in the choice of Islamic banking are Islamic ethics and Islamic bank services awareness. The result equally shows that people are aware of Islamic banking. Practical implications This study provides insight on the factors that influence the selection of Islamic banking, an innovative banking concept. This study has obvious management and theory implications. Also, the study will assist the bank managers in developing effective marketing strategy to increase the market share. Originality/value This study reports Islamic banking selection criteria in a pluralistic-secular Nation. The study also developed a model that can be used in studying the choice of Islamic bank in special type of environment. Thus, Islamic banking is a new reality in the Nigerian financial scene.

What shapes students' perceptions of group work: personality or past experience?

2020 ◽  
Vol 34 (9) ◽  
pp. 1457-1473
Author(s):  
Suzanna Elmassah ◽  
Shereen Mostafa Bacheer ◽  
Reynold James
Keyword(s):  
University Students ◽  
Group Work ◽  
Structural Equation ◽  
Primary Data ◽  
Equation Modeling ◽  
Content Type ◽  
Group Experiences ◽  
Negative Perceptions ◽  
Past Experiences ◽  
The Impact

PurposeGroup work (GW) as a collaborative learning method for university students is a much-researched topic in the literature. However, a fairly neglected area is that of students' perceptions of the same. This study purports to bridge this gap in the extant literature via identifying the determinants of these perceptions.Design/methodology/approachUsing primary data gathered from a sample of 443 university students, the study applies the structural equation modeling (SEM) to estimate the impact of both personal traits and past experiences on the students' perceptions.FindingsThe SEM results reveal that students' perceptions of GW are determined by their relevant past experiences not by their personalities. This position is contradictory to other relevant studies undertaken thus far.Practical implicationsAccordingly, the study stresses the need for educators to create positive group experiences among students and to convert their past negative experiences into positive ones.Originality/valueWhilst group work holds significant learning benefits for students, negative perceptions about this rich method could eventuate in students refraining from participating in the same. By isolating the determinants associated with students' negative perceptions of GW, this study provides educationists with a strong case for developing suitable interventions aimed at enhancing students' positive perceptions of GW, and resultantly further maximizing its potential benefits.

Mobile-banking adoption: empirical evidence from the banking sector in Pakistan

2018 ◽  
Vol 36 (7) ◽  
pp. 1386-1413 ◽  
Author(s):  
Maya F. Farah ◽  
Muhammad Junaid Shahid Hasni ◽  
Abbas Khan Abbas
Keyword(s):  
Perceived Risk ◽  
Structural Equation ◽  
Banking Sector ◽  
Perceived Value ◽  
Equation Modeling ◽  
Mobile Banking ◽  
Content Type ◽  
Actual Use ◽  
Use Behavior ◽  
The Impact

Purpose The purpose of this paper is to study the important factors which help explain consumer intention and use behavior in mobile banking (m-banking) adoption. All constructs of the unified theory of acceptance and use of technology 2 are studied. Non-monetary value is studied through perceived value. Trust and perceived risk are also included to predict intention. Design/methodology/approach A questionnaire was utilized to evaluate customer responses on a five-point Likert scale. A convenience sampling technique was used to collect data from a sample of 490 respondents in Pakistan. The data were analyzed using AMOS and SPSS for Cronbach’s α, CR, CMV, AVE, Harmon’s single factor test, correlation and structural equation modeling. Findings The results of the study show that most of the predictors of intention, including perceived value, performance expectancy, habit, social influence, effort expectancy, hedonic motivation (except for facilitating condition), perceived risk and trust, are significant. All predictors of usage behavior are significant. Research limitations/implications A cross-sectional study was conducted due to time constraints. Practical implications Bank managers must focus on improving customers’ intentions to use m-banking as well as on providing facilitating conditions to increase its actual use. To boost mobile banking, banks’ management must consider the customers’ habits while designing their m-banking products. Originality/value The findings of this paper are not only interesting in terms of boosting m-banking diffusion rate, but also in terms of financial inclusion of the vast majority of mobile users. Further the impact of intention, facilitating condition and habit were checked on actual use behavior since people tend not always to act upon their intentions.

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