• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.1193-1204
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• 2021

This paper aims to examine the main factors that influence the adoption of Islamic banking services in Indonesia. This research collects primary data by distributing questionnaires to 550 respondents in 29 provinces in Indonesia. A total of 550 questionnaires were returned comprising 34.2 percent male respondents and 65.8 percent female respondents. Most of the respondents were in the age group of 21-30 years with the highest level of education being high school. Most of the respondents were working in private firms, with a monthly expenditure of IDR 2,500,000. The independent variables in this study are bank reputation, perceived complexity, perceived compatibility, perceived risk, relative advantage, religiosity, and social influence. Meanwhile, the dependent variable is customer interest in adopting Islamic banking services. The result of this study indicates that awareness and perceived compatibility have a positive effect on customer intention to adopt Islamic banking services. Likewise, religiosity and social influence also have a significant and positive effect on customer intention to adopt Islamic banking services. Meanwhile, bank reputation and perceived complexity have no effect on customer intention to adopt Islamic banking services. Lastly, perceived risk has a negative and significant effect on customer intention of adopting Islamic banking services in Indonesia.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.5
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• pp.413-420
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• 2021

The study aims to measures the service quality of Islamic banking in Malaysia from non-Malaysian customers' perspective based on the six different dimensions of the SERVQUAL model, namely, Shariah, assurance, reliability, tangibles, empathy and responsiveness. This study surveyed 100 non-Malaysian respondents from 25 different countries who have first-hand experience with Islamic banking services in Malaysia. The collected data were analysed by using the SPSS v23 for reliability analysis and descriptive statistics. The results indicates that customers' impressions of Islamic banks' service quality in Malaysia did not meet their standards. The independent variables, namely, compliance, assurance, reliability and empathy have positively affected customer satisfaction, while two dimensions, namely, tangibility and responsiveness does not significantly influence non-Malaysian customer satisfaction in the Islamic banking system in Malaysia. The findings of the study suggested that the Islamic banks should develop and obey the customer perception's policy by following customers' expectations and the results are also expected to include recommendations for improving the level of satisfaction of the Islamic banking system's foreign clients in Malaysia. Since this study was limited to Islamic banks in Malaysia, the findings may not be applicable to other traditional banks.

• Asian Journal of Business Environment
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• v.10 no.3
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• pp.35-42
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• 2020

Purpose: Islamic banking products and services have always claimed to be unique from its traditional interest-based counterpart. However, in practice, many Islamic banks are alleged to have drifted away from its paradigm version. The purpose of this study is to gauge the perception of university students in Malaysia towards Islamic banking products. Research design, data and methodology: Data were collected from 250 Malaysian university students. Structural Equation Modeling (SEM) was performed to test proposed hypotheses to identify factors influencing customers' perception toward Islamic banking products. Results: The main finding indicates that most of the respondents are familiar with Islamic banking products and consider Islamic banking products as useful as its conventional counterparts. The regression results show that respondents are less convinced of adherence to Shari'ah, efficiency and helpfulness of existing Islamic banks. Conclusions: This is a cue to the Islamic banks' stakeholders that they need to realign their practices in an ethically responsible way in accordance with Shari'ah if they wish to secure existing customers and attract potential ones. In a competitive banking environment, most banks provide efficient and readily available service; thus, focusing on this as a strategy hardly distinguishes an Islamic bank from an interest-based bank.

• Journal of Distribution Science
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• v.10 no.8
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• pp.25-34
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• 2012

Understanding customer' lifestyles important for banks because it will guide in determining marketing policies, such as services, pricing, service delivery and promotion decisions. From the customer' lifestyle, banks will know what kind of customers' attitudes, interests and opinions, so they also will understand what the costumer' needs and what services needed by them. For Islamic banks, customers understanding are important because, nowadays, the competition of the banks is not only with other Islamic banks but also with the well-established conventional banks offering Islamic products or services The aims of this research paper are to describe what factors underline the customer's lifestyle of both Islamic and conventional bank, to segment the bank customers based on their lifestyles and investigate the profile of each segments, to compare the characteristics of the segments, and to identify marketing policies based on the characteristics. The population of the study is banking customers in Indonesia, in which the researchers have used judgment sampling as sample selection. There were 186 customers of Islamic banks and 244 customers of conventional bank as respondents in this study. Statistical methods employed were exploratory factor analysis and cluster analysis. The finding of the study shows that there are twelve factor underlining the customers' lifestyle, namely: factor of fashion conscious, internet usage, sports spectator, financial and technology optimism, price sensitivity, independent, compulsive housekeeper, new brand tryer community activities, opinion leader, credit usage, and homebody. In addition, for Islamic banking, there are two market segments, namely fashionable-independent and innovative-social segment. Based on the lifestyle characteristics, the first segment has higher level in factor of fashion conscious, homebody, independent, optimism and price conscious, which is therefore called fashionable-independent segment. On the other hand, the second cluster has higher level in factor of new brand tryer, community minded, sport spectator, credit user, internet usage, opinion leader, and compulsive housekeeper, which is therefore called the innovative-social segment. Furthermore, for conventional banking, there are also two segments, namely persuasive-optimistic and sensitive-independent segment. The first segment has higher level on some factors, namely: opinion leader, optimism, internet usage rate, credit usage level, sport spectator, and new brand tryer. On the other hand, the second cluster is characterized by higher level in factor of price conscious, confidence, community minded, homebody, fashion conscious, and compulsive housekeeper. Managerial implications for the management of Islamic banks could be identified in this study as follows. Firstly, the twelve lifestyle factors of this study could be an alternative view in observe Islamic banking customers. The domination of both the fashionable conscious and the internet usage factor show that the aspects are quite instrumental in perceiving the customer' lifestyles, in which reflects the importance of these two aspects to customers. Secondly, in serving their customers, Islamic banks need to understand the customer lifestyle, in which the lifestyle segments found in this study provide a guide of how their needs were reflected. Finally, by understanding the segments and the characteristics each segment of the conventional banks, Islamic banks could adjust their marketing strategies differently from the conventional banks.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.4
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• pp.381-389
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• 2022

Studies examining the interplay between brand transgression and brand forgiveness is notably sparse especially in the context of Southeast Asian banking customers. The purpose of this research is to add to the existing literature by examining the impact of brand transgression, which is represented by negative past experience image incongruence, and corporate wrongdoing on brand forgiveness among Islamic banking customers in Malaysia. The increasing surge in interest in unfavorable brand relationships has sparked concerns about its impact on brand forgiveness. As a result, this theoretical argument, which lacks empirical proof, has to be statistically tested. The current study was conducted utilizing a non-probability purposive sampling technique among clients in the Klang Valley who had poor experiences with Islamic banking services. Data analysis included descriptive statistics, exploratory factor analysis, and multiple regression on a total of 211 valid replies. The findings show that two elements of brand transgression, image inconsistency, and corporate wrongdoing, have a major impact on brand forgiveness. However, the other dimension namely negative past experience was found to be non-significant to brand forgiveness. Research implications and directions for future studies are also discussed in this paper.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.9
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• pp.499-504
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• 2020

Service quality of any institution is a pull factor for attracting and retaining the customer. The present study examines the customer satisfaction level toward the quality of service offered by the Islamic banks in Oman. It also aims to find out which dimension influences customer satisfaction more concerning the other dimension chosen for the study. To fulfil the need of the study, a structured questionnaire is distributed amongst 100 customers of Islamic banks. The random stratified sampling technique is used for the collection of the data. The collected data is analyzed using the correlation and the multiple linear regression techniques. The result of the study indicates that timely service provided by the banking personnel has a mean score of 4.57, bank staff readiness to serve the customer has a mean score of 4.36, and the security of the banking operation has a mean score of 4.37 occupies the highest rank in their respective dimension chosen for the study. The study reveals that all three dimensions of quality of service represented by Services Reliability, Services Responsiveness and Services Security have a positive and significant correlation with customer satisfaction. The regression results also indicate that all three dimensions influence customer satisfaction of the Islamic banks.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.1
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• pp.169-175
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• 2019

Service quality has been a point of discussion from the decades as it is important for customer satisfaction, loyalty and retention. Various models have been proposed to measure the quality in the service sector. Models are modified in accordance with context and geography to assess the quality of service better. This study aims to investigate the impact of the modified e-SERVQUAL model on the customer perception about the existing relation and potential scope of doing business with a bank which in-turn will decide the performance of the bank. Statistical data was analyzed through various tests like reliability analysis, correlation and regression analysis using SPSS 25.0. The primary data of e-SQ and performance was gathered from 721 internet banking users using 32 item questionnaire, representing 72% response rates, of four selected Islamic banks of Malaysia. E-SERQUAL was modified by adding Shariah Compliance information about banks and products for Islamic banking customers. The finding specified that efficient & reliable services, fulfillment, security/trust, and Shariah compliance information have a significant association with the performance of Islamic banks. The research is original and its implications will be helpful for Islamic banks across the world to enhance the online experience of customers, which will help them to retain the customers in the rapid changing virtual environment.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.12
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• pp.353-361
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• 2021

An economic system is a means by which societies or governments organize and distribute available resources, services, and goods across a geographic region or country. The Islamic financial system faces a number of challenges as part of its role as a tool for developing economic activities. This study intends to advance research by Lassoued (2018) by expanding the research population to include Islamic banks in Asia and adding new dimensions - the size of the independent commissioner and corporate governance. The population of this study is the 100 largest Islamic banks in Asia. Statistical calculations with the STATA application is used for data analysis. Based on the test results, it was found that the size of the sharia board and the independent board of directors did not affect the financial stability of Islamic banking companies. Another finding is that the size of the independent commissioner affects financial stability. This finding shows that commissioners have played an active role in the company, indicating that if the sharia banking company has an ideal number of independent commissioners, it will be advantageous to the company's stability and business sustainability.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.517-525
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• 2021

The study investigates the behavior of Asian banks in response to the subprime mortgage crisis and examines how countries that have experimented with a mix of conventional and Islamic banking managed their balance sheet during that period. The study carries out an independent mean t-test comparing the difference of leverage of 464 conventional commercial Asian banks pre- and post-crisis from the largest twenty-five Asian economies based on GDP (2007). The analysis uses 10-year unbalanced panel data of conventional banks and employs the generalized least squares estimation using a dummy variable event window method to capture the response of Asian banks. The study finds evidence of a structural change in the capital structure of Asian commercial banks in response to the financial crisis. Findings suggest that conventional banks increased their capital position more in countries that have both Islamic and conventional banking than those countries without Islamic banking services. By having Islamic banking in their product portfolio, countries can exert market discipline on conventional banks. The study identifies a significant role of global macroeconomic shocks on banks liability structure decision-making. Evidence shows that this increase in capital positioning by banks was a permanent rather than a temporary response.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.721-730
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• 2020

This study investigates the impact of the country's governance on the revenue efficiency of 108 Islamic banks from 26 countries offering Islamic banking and finance products services. The technical efficiencies of individual Islamic banks have been analyzed using the Data Envelopment Analysis method. The data will be pooled across the selected countries and utilize the intermediation approach. The Ordinary Least Square estimation method is employed to examine the impact of country supervision and regulation on the technical efficiency of Islamic banks. As robustness check, the study examines the impact of the level of bank regulations and supervision on the efficiency of Islamic banks operating in different income-level countries. The results found that the stricter the supervisory power, the less strict capital requirement, the tighter the restrictions on non-banking activities, and the stricter the private monitoring enhance statistically significantly the level of efficiency of Islamic banks. In upgrading the regulations and supervision of the Islamic banks, the existing regulatory framework based on the Basel Committee on Banking Supervision (BCBS) must be complemented with the prescriptions on Islamic banking or Shariah compliance diligently, so that the Islamic banks could be regulated accurately and further improve the technical efficiency of their operations.