DETERMINANTS OF CUSTOMER SATISFACTION AND ADOPTION OF ISLAMIC BANKING IN PAKISTAN

Abstract

Islamic banking system is gaining popularity however little is known about issues and barriers in adoption of Islamic banking. This study aims to understand determinants of customers’ satisfaction and adoption of Islamic banking in Pakistan. Data were collected from the sample of users of Islamic banking in major cities of Pakistan. A total of 276 responses were analyzed using multiple regression techniques through SPSS. Results suggest that religious values and service quality have positive impact on satisfaction of Islamic banking customers whereas factors like inadequate information, language barriers, and trust deficiency were negatively related to customer satisfaction. Customer satisfaction was positively related to adoption of Islamic banking. Findings of this study suggest that managers of Islamic banking should envisage policies to keep abreast their customers with useful information, remove language barriers by explaining complex terms into simple language and maintain service quality to enhance consumer trust. This study is among few studies that have incorporated multiple and diverse factors for necessary for the adoption of Islamic banking