Islamic Banking Services Research Articles

The Effect of Brand Experience on Customers’ Engagement Behavior within the Context of Online Brand Communities: The Impact on Intention to Forward Online Company-Generated Content

The purpose of this study is to assess the antecedent role of brand experience (BE) in the intention to forward online company-generated content (CGC) within an online Islamic banking sector. The present study analyzed 387 valid responses collected through an online survey conducted among a number of online Islamic bank customers in Palestine. The results of this study revealed that BE has a stronger influence on customers’ intention to forward online company-generated contents. This research pioneers the empirical research in Palestinian Islamic banking systems exploring the instrumental role of BE on customers’ engagement behaviors, as well as the intention to forward online CGC. In addition, this research aims to fill the existing gap in the under-researched area of the online branding of Islamic banking services.

Contrasting the drivers of customer loyalty; financing and depositor customer, single and dual customer, in Indonesian Islamic bank

Purpose This study aims to investigate the drivers of loyalty in Indonesian Islamic banks, especially group of depositor vs financing customer and single vs dual customer. Design/methodology/approach The objectives of this study were the seven major commercial Indonesian Islamic banks using the purposive sampling technique. In total, 105 questionnaires were processed, consisting of questions regarding depositors, financing, single and dual customer. Structural equation modeling using partial least squares were the analysis methods used to test the hypothesis, while in-depth interviews were conducted with Islamic bank managers to validate the findings. Findings Image has a significant relationship with customer satisfaction, as well as trust. Similarly, customer satisfaction has a significant relationship with trust. Trust has a significant relationship with loyalty. For a financing customer, the image is very influential on customer trust. For a depositor customer, customer satisfaction is very influential on customer trust. For single customer, customer satisfaction has a stronger influence on the image, compared to dual customer. Practical implications Islamic banks need to maintain good image and service quality to create strong, reliable and long-term relationships with customers, more specifically, in terms of improvement and product innovation. A bank focuses on the micro or macro segment, as well as financing. Financing products should be referred to customers’ needs. Bank reputation can be done by strengthening branding and corporate culture in marketing strategy. Shariah compliance has the highest loading factor to trust customers. Indonesian Islamic banks need to maintain customer trust by sticking to Islamic principles and continuing to ensure that its products and services are in accordance with Islamic principles. In Indonesian Islamic banks, it is very important to keep the legal aspects in all of products and services. Deposit products and services of Islamic banks should be in line with the rules of the financial services authority and Bank of Indonesia culture. Bank efforts to strengthen reputation can be done by strengthening branding and corporate culture in marketing strategy, while increasing the attractiveness of the products by way of research and development (R&D) must endeavor to make products and services attractive in terms of both product characteristics and price. Furthermore, it is necessary to support a good marketing strategy to market their products. Social implications Research can be used more widely in determining public policy, by strengthening the marketing strategy and public education. Islamic banks can work together with local religious departments to maximize marketing strategies to educate and convince people to be active economically under Islamic sharia guidance. Islamic banks need to maintain customer trust by sticking to the principles of sharia and continuing to ensure that products and services conform to sharia principles. Islamic bank management can strengthen customer trust by having a good risk management system, so that customers feel secure with Islamic bank transactions. In addition, sharia banks as companies must demonstrate social responsibility by distributing ZIS managed from customers and implementing CSR as a form of awareness of the surrounding community. Originality/value The study revealed the factors that lead to loyalty on the financing, depositor and the single and dual customers. The study found that improvement and innovation, strategic and sustainability are new indicators used to build images of Islamic banks.

Innovation diffusion theory and customers’ behavioral intention for Islamic credit card

PurposeOne of the main challenge when launching new banking services is to overcome resistance to change so as to accelerate market acceptance. This is the case of an Islamic credit card (ICC). Grounded in innovation diffusion theory (IDT) and theory of reasoned action (TRA), this paper aims to study the purposes and empirically tests an integrated model to explore, which factors influence of ICC.Design/methodology/approachPartial least squares and structural equation modeling was used to assess the hypotheses. Accordingly, the empirical results, obtained in a sample of 762 bank customers.FindingsIntentions to use of ICC are mostly determined by relative advantage, compatibility, customer awareness, satisfaction and attitude. The combination of IDT and TRA significantly explain the ICC adoption.Originality/valueThis research has provided a theoretical understanding of the ICC adoption determinants with the intent of promoting a more in-depth understanding of various elements influencing acceptance and usage of this Islamic banking service.

Instagram: its roles in management of Islamic banks

Purpose This study aims to explore Instagram’s role in management practices of Islamic banks, particularly in Indonesia. The facts that presently Instagram is one of the fastest-growing social media platforms globally and Indonesia has the fourth highest number of Instagram users make this study increasingly relevant to observe how Instagram assists businesses in training trust by engaging users through visual content. Design/methodology/approach A comparison and an analysis of nine Indonesian Islamic banks’ use of Instagram was conducted, considering whether Instagram can potentially serve as a low-cost channel to promote the products and services of Islamic banks to a broader audience, including strategies that work/do not work well to be applied in managing the banks’ Instagram accounts. This aim also aligns with Islamic banks’ desire to boost market share, particularly in Indonesia, which has the largest Muslim population globally. Findings In the course of qualitative research, this study finds that the nine Islamic banks use Instagram for marketing and promotional activities, which boosts engagement with current and potential customers, provides better information access and promotes the banks’ brand identity publicly. Despite these achievements, most Indonesian Islamic banks still tend to use Instagram as a one-way rather than a two-way communication channel, reflecting the findings of previous studies. Originality/value There is little guidance about social media’s role in management practices of financial institutions in general and even less for Islamic banks; hence, we summarize how Islamic banking practitioners and business leaders use Instagram to enhance public engagement. Furthermore, because Islamic banks have unique characteristics that distinguish them from their conventional counterparts, we also review aspects of Sharia-related compliance related to social media use (particularly Instagram) at Islamic banks.

Analisis Penerapan dan Sistem Bagi Hasil Akad Mudharabah Dalam Akuntansi Syariah

Islam is the religion that is most widely adhered to by the people of Indonesia, so it is not surprising that since before the year two thousand Islamic banks have emerged in this country, starting from Bank Muamalat which was first in Indonesia and then independent Islamic Banks to various conventional banking systems which opened the. In Islamic banking itself, there are many products offered, ranging from pure savings, financing to Islamic banking services like a conventional one, but there are fundamental principles that distinguish between the two. Therefore there is a need for further understanding of Islamic banking products Through this research, it is expected that the implementation and system of profit sharing in the Mudharabah contract in sharia accounting will be well known and in accordance with Sharia PSAK and the fatwa of the national sharia council (DSN). The results of this study are that the results of the mudharabah contract and sharia accounting are of two types, namely profit loss sharing, and revenue sharing, these two methods can be used in determining profit sharing in carrying out mudharabah contracts.

The Effect of Religiosity, Bank Image, and Perceived Quality on Customer Purchase Intention towards Islamic Banking

Islam is a religion that guides its followers in every aspect of life including economic activities. Islamic banks provide services to their customers on the basis of Islamic principles (Sharia) and guided by Islamic economics. Many factors influence customer Purchase Intention towards Islamic banking services. This study investigates the influence of Religiosity, Bank Image and Perceived Quality on Customer Purchase Intention towards Islamic Banking Services in Pakistan with the mediating role of Customer Attitude. Questionnaire (survey) was conducted to know the customer response about Islamic Banking. A sample of 250 bank customers was taken as respondents. A 5 point Likert scale was used to measure customer responses. Correlations and SEM tests are applied for complete study analysis by using IBM SPSS V21 and AMOS V 21. The findings of the study indicate that Perceived Quality and Bank Image are more influencing factors in determining Customer Purchase Intention. Religiosity also has significant role in forming the customer Purchase Intention towards Islamic banking services. The results suggest that marketers at Islamic banks should adapt marketing strategies that enhance Bank Image and Perceived Quality.

Exploring the Impediments Faced by the Banking Customers to Adopt Islamic Banking Services in Pakistan

Islamic banking facilitates Muslims to comply with their religious obligations while fulfilling their banking needs. Surprisingly, adoption of Islamic banking services remains low compared to conventional banking in various Muslim countries. The objective of this qualitative study is to explore why conventional banking customers dont adopt Islamic banking services in Pakistan. Semi-structured in-depth interviews were conducted with fifty customers of conventional banks. The findings suggest that conventional banking customers are hesitant to adopt Islamic banking services in Pakistan owing to their lack of knowledge about Islamic banks, their liking conventional banks because they consider current Islamic banking not really Islamic, poor service delivery at Islamic bank branches, geographical barriers and some social reasons. The social reasons preventing adoption of Islamic banking services include friends and familys influence to open a conventional bank account, unacceptability of Islamic bank account in ones social circle, and employers transferring salaries in conventional banks. Based on this research, we propose policy implications to Islamic banks management for capturing the conventional banks customers in Pakistan and providing better services really in line with the Islamic principles. Finally, limitations of this study and future research directions are discussed.

Hukum Musyarakah Mutanaqhisah dan Implementasinya pada Perbankan Syariah

House is part of everyobe needs. In oder to get house they deired, they can use Islamic Banking services. One of financial products offered by Islamic Banks is financing home ownership or conventional banks loans reffered to as products (Mortgages). In offering products related to home ownership, islamic banking is using Musharaka Mutanaqisha contract (Transaction). The purpose of this paper is to determine the extent of Mutanaqishah Musyarakah law and its implementation in Islamic bank institutions. The result of this study shows that this type of contract (musyarakah mutanaqishah) is legal and can be implemented in Islamic bank institutions in financing products for the procurement of goods (houses)

UAE Islamic banking promotional strategies: an empirical review

PurposeThe purpose of this paper is to develop, measure and empirically validate the promotional techniques adopted by Islamic banks and the effect of these methods on consumer interest in Islamic banking products and services in the UAE (United Arab Emirates).Design/methodology/approachData were collected through 250 questionnaires distributed randomly to customers of five leading UAE Islamic banks and, following outlier analysis, the final sample size was reduced to 205, representing a sample of 82% of polled respondents. Multiple regression analysis was used on four key factor determinants that contributed towards the customers’ attitude in determining the most influential promotional strategies adopted by the Islamic banks.FindingsThe study found that the promotional strategies adopted by the UAE Islamic banking sector are having a significant impact on customer attitude towards Islamic banking products and services. The use of mass media has been partially successful, while the use of social media as a promotional tool is predicted to further enhance competitiveness for the UAE Islamic banking industry.Research limitations/implicationsThis paper is limited to five leading UAE Islamic banks and a specified set of promotional techniques nevertheless its findings have potential implications and can be extended and validated through studying the customers’ attitude towards promotion techniques used by Islamic banks in the GCC and MENA regions.Originality/valueThis paper adds value to the limited research on modern marketing and promotional strategies adopted by UAE-based Islamic banks and while regionally specific, it is valuable in its potential application to the Islamic banking sector in the entire GCC and MENA region.

Customer Satisfactions on Islamic Banking Services in Almadinah City, Saudi Arabia

Providing quality services is a key element to compete in the banking industry. Islamic banks showed significant expansion in the past decades worldwide. In the current study, customer satisfaction towards services provided by Islamic banks in Almadinah city, Saudi Arabia was investigated. A total of 292 customers of full-fledged Islamic banks were recruited in the study. Customer satisfaction was measured using a self-administered questionnaire. The results showed acceptable levels of customer satisfaction toward Islamic banking services (85%). In addition, personnel, image, reliability, and compliance with Islamic law were the most important service dimensions that affect customer satisfaction. Finally, gender differences were noticed with respect to customer satisfaction with females seemed to be less satisfied than males. The present findings provide positive feedback to the Islamic banking sector in Almadinah city to improve customer satisfaction of their services.

Factors persuade individuals’ behavioral intention to opt for Islamic bank services

Purpose The sustainable development of Islamic banking services has motivated a significant number of depositors to choose Islamic bank services instead of the conventional bank. There are various factors that can persuade the depositors’ choice to choose an Islamic bank. This paper aims to examine the factors that persuade individuals’ behavioral intention to choose Islamic bank services. Design/methodology/approach To achieve this objective, this study uses the theory of planned behavior (TPB) as the underlying theory to measure the factors that persuade the depositors’ behavioral intention to choose Islamic bank services. A total of 300 questionnaires were distributed to the Malaysian Islamic Bank’s depositors in Peninsular Malaysia. The data from the questionnaires were analyzed using structural equation modeling (SEM). Findings The result showed the three variables that predicted behavioral intentions of the depositors, namely, attitude (ATT), subjective norms (SN) and perceived behavioral control (PBC), were found to be significant in persuading depositors’ behavioral intention to choose Islamic bank services. Furthermore, the findings of the study also confirmed the relevance of using TPB to measure the depositors’ behavioral intention. The results could advance knowledge in the area of Islamic finance and also have positive implications for practitioners. Originality/value The study offers an insight into the present environment involving Islamic banking services which was established in Malaysia 30 years ago. In the context of the current study, the present environment refers to the depositors’ intention to opt for the service and the factors that influence the depositors to choose Islamic banking services apart from the religious factor which has been well acknowledged by a significant number of previous studies.

Factors influencing consumers’ adoption of Islamic mobile banking services in Malaysia

PurposeThis paper aims to test the factors that can influence the adoption of Islamic mobile banking services among the current users in Malaysia.Design/methodology/approachA sample of 250 current users of Islamic mobile banking services provided opinions about their intention to adopt Islamic mobile banking services. Later, the data are analysed using partial least squares approach.FindingsPerceived usefulness and risk are the factors that influence the intention to adopt Islamic mobile banking services among the existing users.Research limitations/implicationsThere are some limitations of the current study. The sample size and area of study becomes the obvious limitations. Thus, there is a need for caution in the interpretation of the results and the conclusion cannot be as generalised. Besides, the use of current factors might limit the ability to explore other potentially important determinants of the users. Thus, future research can be conducted by incorporating new factors and provide new insights for Islamic mobile banking services. In addition, the sample is biased towards people who are currently using mobile banking services.Practical implicationsBy understanding these factors among the customers, it would help the industry player, particularly Islamic financial institutions to plan and strategise appropriate policies and support necessary programme on diversifying and promoting financial transaction using mobile banking services among their existing and potential customers.Originality/valueThis paper offers an additional literature on Islamic mobile banking, especially from the Malaysian context. There is a lack of study that focusses on Islamic mobile banking services. The paper is considered to be the first attempt to examine factors that influence Malaysian Islamic banking customers to adopt Islamic mobile banking services, which is not often considered in previous studies.

Customer satisfaction with Ijarah financing

Purpose The purpose of this study is to assess customers’ perceptions of Islamic banks (IBs) of customers who have used or intend to use Ijarah service to purchase a car. The study further examines the mediating role of clarity and accuracy (CAA) of service offered between customer perceptions and customer satisfaction. This paper focuses on connecting in quantitative terms customers’ perceptions of IB services to customer satisfaction by providing the first evidence of this relationship in the context of car Ijarah financing. Design/methodology/approach In this paper, a model is proposed to assess customers’ perceptions of the Ijarah service used by IBs to finance car purchases. The model connects customers’ perceptions to customer satisfaction with this Shariah-compliant service. The data are drawn from 300 randomly selected customers living in five major cities in Pakistan, and factor analysis and structural equation modeling are used to understand the patterns of correlation/covariance among a set of variables and to evaluate customers’ perceptions of Ijarah financing for car purchases. Findings The results of the study show a significant positive relationship between customers’ perceptions and customer satisfaction. In particular, the CAA of the services provided is a significant predictor of customer satisfaction. This paper finds that CAA is a partial mediator between customers’ perceptions and customer satisfaction. Research limitations/implications As this study is based on only one country and one simple car Ijarah financing product, the results cannot be generalized to the entire industry. Therefore, deeper research is needed in which data from other countries are used and a range of models and approaches are applied to secure knowledge about the multinational and multifactor variations of Ijarah financing. Practical implications In terms of their implications for IBs, the study results provide a basis for the banks to more effectively cater to their customers by improving the services offered in line with customers’ expectations and thereby increasing profitability. This investigation is much needed in academia and industry because the market share for Ijarah financing is growing and competition between IB products and conventional banking products is increasing. Originality/value This study presents the first endeavor to use exploratory factor analysis, confirmatory factor analysis and structural equation modeling to assess customer satisfaction in Ijarah financing using Pakistani banking clients’ data. This approach is also applicable to various IB financial products and Shariah contracts.

Standarisasi Perjanjian Baku Pada Perbankan Syariah

<p>The legal relationship applies general terms and conditions set forth in the standard agreement. In connection with the legal relationship between Islamic banks and their customers, they will be questioned, especially those who do not understand the law, what law will be applied in the event of a dispute between Islamic banks and customers regarding the use of an Islamic banking service? Will the existing Islamic law apply to the disputes that arise? Or what will be applied are the terms and conditions set forth in the agreement? This question needs to be raised and the answer is needed to avoid misunderstandings for those who are lawless who intend to connect with Islamic banks, because at this time Indonesia does not yet have Standardization in the form of a Law on standard agreements. therefore it is very necessary to standardize the agreements that apply to the relationship between Islamic banks and their customers by Indonesian banks.</p>

ISLAMIC FINANCIAL TECHNOLOGY TOWARDS THE ADVANCEMENT OF ISLAMIC BANKING IN INDONESIA

Responding to the digital economy in the era of industrial revolution 4.0, the quality of sharia banking services in Indonesia is estimated and expected to increase significantly, in order to reach all levels of society, especially for people who live in the 3T area (terdepan/frontier, terluar/outermost, and terpencil/isolated). However, currently the quality of sharia banking services in Indonesia is not yet satisfactory, especially by people living in the 3T area. this research, trying to answer the challenge through a SWOT analysis of the application of financial technology policies in Islamic banks, with the hope of the quality of Islamic banking services can be improved and felt by all levels of Indonesian society and banking players can quickly understand and act. The management of Islamic banking management functions appropriately is based on an attitude of fear of Allah SWT, in the context of managing internal and external assets that include banking activities in a holistic manner. Thus, this study aims to analyze more deeply the strengths, weaknesses, opportunities, and threats (SWOT) of the application of Islamic banking financial technology (mobile banking) in Indonesia, the results showed a significant achievement compared to the previous year, even though in the global context, there were still many breakthroughs needed so that the 3T community could utilize optimal Islamic banking services

Factors propelling use of Islamic Banking Services: The moderating role of Customer Intimacy

This study investigates factors propelling use of Islamic banking products and services. The present study develops an amalgamated model with the help of cognitive and emotional factors to investigate customer satisfaction and loyalty towards use of Islamic banking services. Data was collected from Islamic banking customers and empirically tested using structural equation modelling (SEM). Findings reveal that customer satisfaction was jointly predicted by awareness, reputation, compatibility, complexity, trust and commitment and explained R2 78.7% variance in Islamic banking customer satisfaction. On the flipside customer loyalty was predicted by customer satisfaction and customer intimacy and depicted R2 20.6% variance in customer loyalty. Extending to this, the present study confirmed the moderating role of customer intimacy wherein positive relationship between customer satisfaction and customer loyalty will be stronger when customer intimacy is higher. Finally, research limitations and future research direction are discussed.

Awareness and Perceptions of Muslim Society towards Islamic Banking in the Philippines

The aim of this study was to determine and analyse the level of awareness and perceptions of Muslim society towards Islamic banking in the Philippines.Self-structured questionnaires were administered and distributed to 70 employees of some selected offices of the Mindanao State University (MSU), Marawi City and the data were processed and analyzeddescriptively.The results revealed that most of the respondents are aware of the existence of the Al-Amanah Islamic Investment Bank of the Philippines and that interest and uncertainties are prohibited in all forms of business transactions including in Islamic banking. Conversely, they are not aware of Islamic banking products and services and its modes of financing such as musharakah , mudharabah , murabaha and Ijaraah . Furthermore, the study found that most of the respondents perceived that Al-Amanah Islamic Investment Bank of the Philippines has not done enough to promote and market its products and service to the public. The problem of peace and order , and the lack of emphasis placed on the importance of Islamic banking in the country have affected its development. The study also indicated that majority of respondents believed that Islamic banking has a potential positive future in the Philippines. Hence, promotion through policies and marketing strategies is necessary in strengthening Islamic banking in the country.

The determinants affecting the preference of Islamic banking services in Tunisia

The determinants affecting the preference of Islamic banking services in Tunisia

Switching Behavior Nasabah Bank: Tinjauan Empiris Teori Keperilakuan Di Kota Makassar

Public understanding of Islamic banking services is still low. The purpose of this study is to analyze the factors that influence the switching behavior of bank customers. This research method uses a quantitative approach and data collection using a questionnaire given to 200 bank customers who are taken on a non-probability sampling basis and analyzed using SPSS version 21. The results of hypothesis testing indicate that attitudes, subjective norms, perceived behavioral control, and system ease procedures have a positive and significant effect on the intention to switch bank customers, while social influences and effort expectancy do not affect the intention to switch bank customers. This research is relevant for management to design service products that provide convenience for users to increase the intention of users to transact with Islamic banks.

PERSEPSI MAHASISWA TENTANG BANK SYARIAH TERHADAP KEPUTUSAN MENABUNG DI PERBANKAN SYARIAH

Islamic Bank is a bank whose operating system uses sharia principles. Currently many terms are given to refer to Islamic Bank entities other than Islamic Banks themselves, namely Banks Without Riba (La Riba Bank), and Islamic Banks (Shari'a Bank) or banks based on sharia principles. Students are the right target for Islamic banking to increase savings growth. Savings are needed in students, not only students who come from within the city but also come from outside. The purpose of this study is to find out how the Economic School of Muhammadiyah Jambi students’ 'perceptions about Islamic banking, and how strong the influence of students' perceptions on the decision to save in Islamic banks. The theoryies used are perception theory by Michael W. Levine & Shefner and the factors that influence consumer decisions by Mowen and Michael. The results of this study indicate that the perception of students of the Economic School of Muhammadiyah Jambi regarding sharia banking services in Jambi is very positive, indicated by the level of their understanding of Islamic banking services. They believe well that saving in Islamic banks is more beneficial than in conventional banks. However, the decision to save is still in conventional banks. There are only 24.6% of students who have savings in Islamic banks. The remaining 75.4% do not have savings in Islamic banks.