Measuring the effects of service quality by using CARTER model towards customer satisfaction, trust and loyalty in Indonesian Islamic banking

Abstract

Purpose There are two primary objectives of the research. Firstly, the study aims to explore the service quality dimension of Indonesian Islamic banking using a CARTER model. Secondly, the study aims to examine the relationship of service quality towards customer satisfaction, trust and loyalty in Indonesian Islamic banking. Design/methodology/approach The conceptual framework of the study will be examined using the PLS–SEM approach. Then, it will be examined using the 392 collected data from Indonesian Islamic banking customer in Surabaya. Findings Reliability becomes a key driver of customer satisfaction towards Indonesian Islamic banking. Then, customer loyalty will improve more significant if the Indonesian Islamic bank can firstly improve its customers trust. Research limitations/implications The research results are questionable to represents Indonesia in general because all the sample of the research is Islamic banking customers in Surabaya, East Java Province. Practical implications Updating with the newest technology in delivering integrated products or services will lead Indonesian Islamic banking satisfying its customer more. Then, Indonesia Islamic banking should develop the capability of human resources related to banking skills and understanding of Islamic principles to increase customer trust. Originality/value This research is essential in complementing the previous research regarding the level of contribution of compliance in Indonesia Islamic banking. Then, the research discusses how compliance becomes an essential part of service quality that could increase the market share of Indonesian Islamic banking by enhancing the level of customer trust.

Customer loyalty to Islamic banks: Evidence from Indonesia

“…Lewis and Soureli (2006) and Yilmaz et al (2018). Fauzi and Suryani (2019) find customer satisfaction with Islamic banks in Indonesia directly related to customer loyalty. Recent studies by Mulia et al (2020) and Haron et al (2020) explain that satisfied customers tend to reuse and spread positive stories about Islamic mobile banking to their families and friends.…”

“…The Islamic Financial Services Board [IFSB] (2018) reports that Islamic banking in emerging countries including Indonesia is exhibiting significant improvements in profitability. By 2019, 14 full-fledged Islamic banks operate in Indonesia; however, their assets are small relative to conventional banks (Fauzi & Suryani, 2019). Indonesian Islamic banks' total assets represent only 0.9% of the global volume (BAPPENAS, 2018).…”

The role of service quality within Indonesian customers satisfaction and loyalty and its impact on Islamic banks

“…The Sharia bank management must continue to develop its human resource competencies, especially on the side of building the character of the bankers to foster integrity and commitment in customer service. Third, as seen in the results of the research conducted by Fauzi and Suryani (2019), efforts to increase customer loyalty can be done by paying attention to their beliefs. To ensure this, Islamic banking must use Sharia principles as an important reference when carrying out the Sharia banking business.…”

The Impact of Total Quality Management on Service Quality, Customer Engagement, and Customer Loyalty in Banking

“…SERVQUAL model is chosen to measure service quality because it could portrait service dimensions and it could be measured based on the banking service customer perspective (Fauzi & Suryani, 2019).…”