Determination of Lombok Island Community Preferences to Become Islamic Bank Customers with Religiosity as a Moderating Variable

Abstract

Islamic banking in Indonesia continues to experience developments marked by increasing assets and market share. However, Islamic banking is still lagging behind conventional banking, including in Lombok Island, where the majority of the Population is Muslim. This study aims to explore the factors that influence the preferences of the people of Lombok Island in choosing Islamic banks, with a focus on the influence of service quality, perception, financial literacy, product knowledge, Islamic branding, and the role of religiosity as a moderating variable in the relationship. This type of research is explanatory research (explanatory research) with a quantitative approach. The Population in this study was Islamic customer banks in Lombok Island, with a sample of 210 respondents determined using Nonprobability Sampling, and the data collection tool used was a questionnaire. Data analysis used Partial Least Squares-Structural Equation Modeling (PLS-SEM). The study results indicate that service quality, perception, financial literacy, product knowledge, and Islamic branding significantly influence the preferences of the Lombok Island community to become Islamic bank customers, as evidenced by the T-Statistic value > 1.96 and P-Value < 0.05. At the same time, religiosity cannot moderate the relationship between service quality, perception, financial literacy, product knowledge, and Islamic branding on the preferences of the Lombok Island community to become Islamic bank customers. Based on this, it is recommended that Islamic banks improve Islamic branding and service quality and hold financial education programs for the community.