Impact of Customer Satisfaction on Image , Trust , Loyalty and the Customer Switching Behavior in Conventional and Islamic Banking : Evidence from Pakistan (original) (raw)
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SSRN Electronic Journal, 2011
This study aims to investigate the factors that affect the loyalty of Muslim customers in Indonesian Islamic banking industry. Based on the literature review, this study uses customer satisfaction, corporate image, and customer trust as variables that are expected in affecting the loyalty of Muslim customers. Data collection was conducted through a survey that involved 274 Muslim customers. The model was tested using hierarchical regression. The results show that customer's satisfaction and customer's trust have an important role to build Muslim customers loyalty in Indonesia Islamic banking industry. Furthermore, the results show that customer's trust function as a mediator role (partially) for the relationship of customer satisfaction and customer loyalty.
Purpose -The purpose of this study is to investigate customer satisfaction and its effect on image, trust, and customer loyalty for Islamic banks. Design/methodology/approach -The study uses data from Islamic banks and dual-window Islamic banks, pertaining to two different customer segments (Muslims and non-Muslims). Findings -The results indicate that customer satisfaction has a significant relationship with image, image has a significant relationship with trust, and trust has a significant relationship with customer loyalty for both customer segments. Furthermore, significant differences occur in the effect of customer satisfaction on image, image on trust, and trust on customer loyalty between Muslim and non-Muslim customers. Practical implications -The findings suggest that Muslim customers establish relationships with Islamic banks because they trust that Islamic banks are Shariah compliant. Therefore, providing secure banking products that are fully compliant with Islamic principles are necessary. Originality/value -This research is important as it clearly demonstrates that the loyalty of Muslim and non-Muslim customers to Islamic banks is influenced by customers being satisfied, as well as the image of and trust in Islamic banks. In this context, when customers are unwilling to trust Islamic banks, they are also unwilling to be loyal.
Quality and image of banking services: A comparative study of conventional and Islamic banks
International Journal of Bank Marketing, 2017
Purpose-Bank customers' perceptions of service quality and service image of Islamic banks may differ from those of conventional banks. The purpose of this paper is to examine the differing perceptions of customers of Islamic and conventional banking systems in an emerging market, which has rarely been addressed and adds to the body of knowledge on this topic. This study also reexamines the SERVQUAL model of customer banking services to measure their impact on customer satisfaction and loyalty. Design/methodology/approach-The study uses responses from a randomly drawn sample of 229 customers from conventional banks and 225 customers from Islamic banks operating in Bangladesh using a structured questionnaire. SPSS and structural equation modeling techniques were employed as statistical tools for data analysis. Findings-Overall, the examined service quality dimensions wield varying effects on client satisfaction mediated through the perceived image of banking services. Islamic bank customers' perceptions of the level of reliability, responsiveness, security and reputation were significantly higher than those of conventional banks. Research limitations/implications-This study enhances our understanding of how Islamic banking practices differ from those of conventional banking in terms of service quality and image-related factors. More specifically, the findings of this research explain consumers' perceived assessment of satisfaction and loyalty in a comparative research setting. Originality/value-No prior studies have addressed the impact of the individual service quality dimensions on image factors in the context of conventional and Islamic banking in an emerging market, Bangladesh.
The aim of this study is to determine the role of service quality, customer satisfaction and bank image on customer loyalty and recommendation of the Islamic banks in Palestine. The confirmatory factor analysis was used to determine the different variables that were being studied in this research paper and their relationship with customer loyalty and recommendation. The research findings showed that customer satisfaction normally has an impact on the bank image a customer will create, ultimately affecting his or her customer loyalty and recommendation to a certain bank. Customer satisfaction is determined by the quality of services that he or she experiences in a bank. Therefore, if a customer receives service quality that meets or exceeds his or her expectations, then he or she will have a positive image of the bank, become satisfied and then will highly likely be loyal to a particular financial institution and recommend it to his or her friends
Customer Loyalty toward Islamic and conventional Banks; mediator role of Customer Satisfaction
Journal of Marketing Management and Consumer Behavior, 2017
With the liberalization of economic sector of Pakistan and introduction of Islamic banking system, the industry become more competitive as the consumer have more choices and thus their preference changed toward banking. In this increasing high competitive industry, Bankers are more focus on customer loyalty to win market share and thus gain competitive advantages. The purpose of this paper to identify those core factor that influence customer loyalty in banking sector of Pakistan. The paper examine three independent factors i.e. Bank services, Bank reputation and religious perspective along with a mediator factor which is customer satisfaction that ultimately results in gaining customer loyalty. This study was carried out by taking sample size of 260 participants and the structure questionnaire of 35 items is used to collect data and analysis was done using SPSS (edition 22) software. The Result of the study shows that there is positive relation among Bank services, Bank Image and religious Perspective on customer satisfaction which directly leading to customer loyalty. With the help of this study we found that Bank services is considered as a most prominent factor that leads to customer satisfaction and customer satisfaction leads to customer loyalty. This study is helpful for policy makers and bank managers to know customer satisfaction thus they can earn more customer loyalty.
Measuring Customers Satisfaction of Islamic Banking Sector in Jordan
Humanities and Social Sciences Letters, 2020
This study measured the satisfaction of customers with the quality of Jordanian Islamic banking services. This study investigated the effect of customer satisfaction factors (quality of services, trust, and institutional image and the confidence of customers) in Islamic banks on their satisfaction with their services. The sample size consisted of 186 clients of Jordanian Islamic banks. The paper used simple and multiple linear regression methods. The major findings revealed that there is a positive significant impact of elements (services quality, customer confidence, and institutional image) in customer satisfaction with their services. The sample of this paper does not cover the total number of customers of Islamic banks in Jordan and did not take into account all the factors that affect the satisfaction of customers. In the future, it could be a more comprehensive study done in Arab countries. This result is highly relevant with immediate practical implications. This study is intended to help Jordanian Islamic banks' management develop their marketing strategies. This is important for the survival of this type of bank. Contribution/Originality: The primary contribution of this study revealed that there is a positive significant impact of bank services quality, customer confidence, and institutional image on customer satisfaction. These findings will help banks' management develop their marketing strategies, keeping current customers satisfied and attracting new clients.
International Journal of Accounting and Financial Reporting, 2014
The Islamic banking is an emerging concept and has gained valuable acceptance not only in the Islamic countries but all over the world and has a visible growth. The purpose to conduct the current study is to empirically check the effect of consumer attitude towards Islamic banking on the customer's perceived service quality regarding banking services and customer satisfaction with banking services. The proposed research model also investigates the 457 relationships among variables like perceived service quality, customer satisfaction, customer trust and customer loyalty. A survey questionnaire was designed for data collection from the respondents that are the regular users of Islamic banks in Bahawalpur, Pakistan. The method used to collect data was convenience sampling in order to collect data from customers of 4 Islamic banks in Bahawalpur that are Meezan Bank, Bank Islami, Dubai Islamic Bank, and Bank Al-Baraka. Total 200 questionnaires were distributed out of which 163 were collected. Out of 163 collected questionnaires, 157 were in the usable form and used for the final analysis (Regression) using SPSS Ver.20. The results of the study show that attitude towards Islamic banking has a positive impact on the perceived service quality and customer satisfaction regarding the Islamic banking services. Moreover, the results also suggest that perceived service quality also influences customer satisfaction positively; customer satisfaction has positive impact on customer trust and customer loyalty. Furthermore, customer trust also influences customer loyalty positively. The current study enhances the understanding regarding the customer satisfaction, customer trust and customer loyalty and their determinants.
Customer Satisfaction Level of Islamic Bank and Conventional Bank in Pakistan
Islamic banking has been started function in 1970s. The speed of the growth of Islamic banking all over the world including Pakistan has been expedited since 2002. The objective of this study is to explained/find the phenomenon that conventional banking, which has been operating for the last three centuries have started tumbling steeply in the last few decades while Islamic banking has been extend their function all over the world specially in Muslim countries with quickly. This study shows the customer satisfaction level of both Islamic and conventional Banking in Pakistan. The population of this study is consists of customer of Islamic banking and conventional banking in Pakistan. Three Islamic banks i.e., Bank of Khyber, Almeezan bank and Albaraka bank and three conventional banks i.e. Habib bank limited, united bank limited and Allied bank limited were selected for this study. And 100 questionnaires were distributed among employees of these banks. Islamic banks are getting popularity due to interest free products, risk sharing activities and strong ties with the religion. Islamic banks work as welfare organization to promote trade and economic activities in line with the instructions of Islam to provide a number of Interest-free products and service. The existence of Islamic and conventional banks in Pakistan created stiff competition among banks to attract and retain greater number of customers by the provision of quality services. This study examined the relationship among service quality, customer satisfaction and bank performance by comparing Islamic and conventional banks operating in Pakistan.
Customer Satisfaction and Loyalty in Pakistani Islamic Banks: A PAKSERVE Investigation
The objective of this research is to explore the relationship between customer satisfaction and service quality with moderators like perceived risk, switching cost, knowledge and expertise in Islamic banks of Asian countries by using the PAKSERVE scale. A survey questionnaire was developed and data was collected through this questionnaire by personal visits to the customers. The five points Likert scale used to assess the construct of the present study. The respondents were from cities of Pakistan. SPSS structure equation model and factor analysis was used to validate the relationship among variables. It has been observed that satisfaction of the customers strongly predicts the loyalty of the customers in Islamic banking industry of Pakistan. It is therefore recommended that customers should primarily focus upon personalization and sincerity dimensions, as these two dimensions show the higher co-efficiency value among all. This study also shows that customers of Pakistani Islamic banks focus on attaining a sincere and highly personalized behavior from the staff of the banks. These results also acknowledge the role of national culture in delineating the service quality conduct. The SERVEQUAL dimensions of tangibility, assurance and reliability have very low co efficient values as compared with three new dimensions of PAKSERVE. On the basis of above discussion, we can conclude that customer satisfaction and loyalty is purely a cultural phenomenon.
Customer Satisfaction between Islamic and Conventional Banks: Case of Pakistan
This study examines the customer satisfaction regarding Islamic banks and conventional banks in Pakistan. The history of conventional banks in Pakistan is better than Islamic banks. Development of Islamic banking system in Pakistan is in premature stage. In Pakistan only few banks provide pure Islamic banking services to their customers. This study also investigates about the satisfaction of customers from the services of conventional banks as well as Islamic banks. Our target area is banking sectors of Pakistan and data is collected by interviews from five Islamic banks and five conventional banks of Pakistan. The result of this research showed that the customers of both the banks either they were from Islamic banks or conventional banks were satisfied with the facilities provided by the banks, however the customers of conventional banks were more satisfied than Islamic banks.