Efficiency and client satisfaction of Islamic and conventional banks: A bilateral effect

Aldeehani, Talla M.

doi:10.15208/beh.2018.22

Cited by 4 publications

(6 citation statements)

References 19 publications

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“…They found no differences in satisfaction levels between the two groups concluding that Islamic banks needed to be competitive, improve their service delivery and provide transparent information regarding their business operations. In stark contrast, Aldeehani (2018) found that in Kuwait, customers of the Islamic bank are more satisfied than customers of conventional banks. Furthermore, they found a significant positive bilateral causal relationship between client satisfaction and banking efficiency.…”

Section: Customer Satisfactionmentioning

confidence: 82%

“…This finding indicates that if the objectives of an Islamic bank align with the requirements of the Sharia, it increases the chances of Muslim customers being satisfied. This finding adds one more dimension to the factors contributing to customer satisfaction, which includes, among other things, the products and services offered, efficiency and image of the Islamic bank (Aldeehani, 2018;Amin et al, 2013;Khan et al, 2007). A positive and significant relationship (b = 0.21; P < 0.01) was also found between the objectives of Islamic banking and customer loyalty.…”

Section: Jimamentioning

confidence: 95%

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Objectives of Islamic banking, customer satisfaction and customer loyalty: empirical evidence from South Africa

Moosa

Kashiramka

2022

JIMA

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Purpose This study aims to explore the relationship between the objectives of Islamic banking, customer satisfaction and customer loyalty in the South African context. Diving deep, this study also explores the relationship between customer satisfaction and customer loyalty. Design/methodology/approach Purposive and snowball sampling techniques were used, resulting in 163 respondents participating in this study. The data was collected using an online survey and analysed using a structural equation model based on the partial least squares method. Findings The results indicate that the construct related to the objectives of Islamic banking influences both customer satisfaction and customer loyalty. In addition, customer satisfaction is also found to influence a customer’s loyalty to the Islamic bank. Originality/value In South Africa, to the best of the authors’ knowledge, this study is the first of its kind; thus, the results provide context-specific insights into the extant literature on Islamic banking for Muslims residing in a non-Muslim majority country.

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Section: Customer Satisfactionmentioning

confidence: 82%

Section: Jimamentioning

confidence: 95%

Objectives of Islamic banking, customer satisfaction and customer loyalty: empirical evidence from South Africa

Moosa

Kashiramka

2022

JIMA

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“…Such a contradicting finding appeals future theoretical and empirical studies to shed more light on the issue of interactions between IBs and CBs in a dual banking system context. The recent study of Samad (2018) claiming the existence of a causal relationship between IBs’ return on deposits and CBs’ creditor interest rate, and the one of Aldeehani (2018) showing how client satisfaction is a determinant factor for bank efficiency for both IBs and CBs, provide further evidence on the existence of such interactions.…”

Section: Econometric Analysismentioning

confidence: 85%

“…It also appeals future research studies to consider the issue of policies to adopt by IBs to further increase their “PLS” funding. The studies by Zarrouk et al (2016), Javaid and Alalawi (2018), Kamarudin et al (2018), Cham (2018) and Aldeehani (2018) reviewed above can help in bringing some elements of answer to this specific issue.…”

Section: Discussionmentioning

confidence: 99%

“…5. The reader can also refer to the study of Aldeehani (2018) which identified, in the case of the Kuwait’s banking system and on the basis of survey-collected data, that client satisfaction is a determinant factor for bank efficiency regardless of the bank type. Furthermore, there exists a bidirectional reinforcing causal effect between these two dimensions, and that client satisfaction is higher in the case of IBs.…”

Section: Notesmentioning

confidence: 99%

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Islamic banking and real performances in a dual banking system

Mimoun¹

2019

IMEFM

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Purpose There is a rich debate on the nature of Islamic banking (IB)–growth nexus and the direction of causality governing this nexus. This study aims to focus on this issue in the case of Saudi Arabia, the largest country-holder of Islamic Banks (IBs)’ assets worldwide. It assesses empirically the nature of dynamic interactions between IBs’ financing and the real performances in the non-oil private sector (investment and GDP) in the context of a dual banking system where IBs operate alongside their conventional counterparts. Design/methodology/approach This study employs the Bounds test in the context of reparametrized autoregression distribution lags (ARDL) models to analyse both long-run and short-run dynamics governing Islamic and conventional banks’ (CBs) financings on one hand and real investment and GDP in the private sector on the other hand over the 2007q1-2016q4 period. It also uses the Toda and Yamamoto (1995) augmented Granger-causality test to assess the direction of causality governing these dynamics. Findings The more important results are: there is a stable and significant long-run relationship between IBs’ financing and real performances in the private sector. This nexus is governed by the “feed-back hypothesis”, implying the validity of both the “supply-leading” and the “demand-following” hypotheses. In a dual banking system context, IBs exert two effects on the financing of their conventional counterparts: a negative “crowding-out” effect and a positive and “stimulating” effect which transmits through the “competition” channel. Finally, in the long-run, steady-state, real GDP is dissociated from CBs’ financing. Originality/value This paper highlights an issue that has not received the needed attention in the case of Saudi Arabia. It has also found novel results with important policy implications.

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Analyse the Effect of Islamic Derivatives during Financial Crises of 2008 Using Data Envelopment Analysis

Asst.

Abdul²

2020

J. Phys.: Conf. Ser.

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There is a very broad debate recently on the competence of Islamic financial derivatives in banks as a risk management tool better than traditional financial derivatives in conventional banks. The economic crisis that occurred in 2008 was a real measure to prove or deny this claim. In terms of bank performance, this research empirically compares Islamic and traditional banks, to evaluate the feasibility and efficiency of Islamic and traditional banks. The Data Envelopment Analysis (DEA) as statistical approach used in this research. The Kuwaiti banks were selected as a case study for the period 2006-2011 because it cover the period before and after the financial crisis of 2008. The data obtained from the Scope website, the annual accounts from banks, the IMF database, PhD studies and other tools. The research showed that Kuwait’s traditional banks were higher in efficiency and performance before the 2008 financial crisis, but the Islamic banks made a better performance afterwards. However, Islamic and traditional banks are subject to a comparable degree of risk, but different in nature; and the Islamic banks are less safe to financial shocks than conventional banks are. Since Islamic banks are unable to charge a fixed, standardized return and are unable to borrow from the financial market, Islamic banks may face more risk and unpredictable asset returns. The implication of these facts of the over-management modernisation of Islamic banks is important in order to reach a higher degree of efficiency. It will give Islamic banks an advantage over the traditional bank. For traditional banks, they need to invent specific strategies to reduce costs and retain their market position.

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Efficiency and client satisfaction of Islamic and conventional banks: A bilateral effect

Cited by 4 publications

References 19 publications

Objectives of Islamic banking, customer satisfaction and customer loyalty: empirical evidence from South Africa

Objectives of Islamic banking, customer satisfaction and customer loyalty: empirical evidence from South Africa

Islamic banking and real performances in a dual banking system

Analyse the Effect of Islamic Derivatives during Financial Crises of 2008 Using Data Envelopment Analysis

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