Understanding trust & commitment of individual saving customers in Islamic banking

Abstract

Purpose – This paper aims to examine the relationship among trust, commitment and ego involvement and their impacts on word-of-mouth communication (WOM) for individual saving customers in Islamic banking. Design/methodology/approach – The conceptual model and the hypotheses are formulated based on trust and commitment theory, organizational commitment theory, social judgment theory and the results of previous empirical studies on buyer–seller marketing relationship in business-to-customer (B2C) markets. Quantitative research methodology was performed to examine the model and the hypotheses. The data were collected using survey with questionnaire. The respondents of the survey are 100 Islamic banking individual saving customers. Multiple regression analysis was used to test the proposed model and the hypotheses. Findings – The research results show that affective commitment has a positive and significant impact on WOM, while normative commitment and calculative commitment have no significant impact on WOM. Ego involvement has a positive and significant impact on trust, normative commitment, calculative commitment and affective commitment. However, trust does not have a significant impact on calculative commitment, normative commitment and affective commitment. Research limitations/implications – This research was only conducted in one Islamic bank in Indonesia. The data collection using the convenience sampling method as well as the use of a small sample size caused the limitation of the research results in representing across the retail customer of the bank. This study can be replicated with a larger sample size and by involving more Islamic banks to examine the stability of the findings. Practical implications – The research results indicate that ego involvement has an important role in shaping trust and commitment of Islamic banking individual saving customers. Given this, the managements of Islamic banks need to ensure that the banks they have managed are relevant, important and appropriate with the values espoused by their individual customers. Originality/value – This study is important because of the limited literature which discusses relationship marketing in the context of Islamic banking. Furthermore, this research has a novelty on the inclusion of ego involvement in explaining trust and commitment. The use of commitment as a multi-attribute construct also enriches the literature on buyer–seller marketing relationship in B2C markets due to the limited literature that addresses commitment as a multi-attribute construct.