Quality and image of banking services: a comparative study of conventional and Islamic banks

Abstract

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 re-examines 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 Influence of Service Quality on Users' Behavioural Intentions in Developing Countries: A Cross-Sectional Study in Cape Verde's Public Hospitals

“…In fact, in a study conducted by Saleh et al (2017) carried out in two Islamic banks, results show that there is a positive effect of perceived quality on the corporate image, pointing to the idea that clients with a higher service quality perception seem to form a more favourable image about the organization. Among others, several studies have been carried out in healthcare contexts, such as Faria and Mendes (2013) in the context of Portuguese healthcare centres, which suggest that perceived service quality seems to have a direct and significant effect on the image of healthcare institutions.…”

Service Performance in Public, Conventional Private and Specialized Private Banks in Bangladesh

“…Lassar et al (2000) argue that as a critical measure of organizational performance, service quality remains at the forefront of both the marketing literature, and the services marketing literature (Jensen & Markland, 1996;Kant et al, 2017;Sivapalan et al, 2017). Practitioners and academics are keen on accurately measuring service quality in order to better understand its essential antecedents and consequences, and, ultimately, establish methods for improving quality to achieve competitive advantage and build customer loyalty (Palmer & Cole, 1995;Saleh et al, 2017). Service quality is commonly noted as a critical prerequisite for establishing and sustaining satisfying relationships with valued customers.…”

Service Quality from Customer Perception: Evidence from Carter Model on Bank Islam Brunei Darussalam (BIBD)

“…Whereas Parasuraman et al, (1985); Zeithaml and Bitner (1996) has identified that an excellent service quality comprises of five dimensions which are tangibles (appearance of physical facilities such as equipment, personnel and written material), reliability (dependability and accuracy of provided services), responsiveness (staff/personnel willingness to assist customers, provide brisk service and response), assurance (employees knowledge and expertise to ensure trust and confidence to customers) and empathy (customer oriented and compassionate attitude of service provider). The definition and concept of service quality was suggested by and since then it has been widely used by many researchers (Alshurideh, Al-Hawary, Mohammad, Mohammad and Al Kurdi, 2017;Lone and Rehman, 2017;Saleh, Quazi, Keating and Gaur, 2017;Faisal et al, 2016).…”

“…Carter model is used for examining the service quality and customer perception relationship due to its dual nature (Faisal et al, 2016;Saleh et al, 2017;Parves, 2017). It is considered the most reliable and dependable instrument for the measurement of service quality and customer perception relationship of Islamic bank customers (Othman & Owen, 2001).…”

“…The study proposed that the perceived service quality levels among Jordan bank customers differ based on the factors of religion, age, income and occupation. Saleh et al (2017) administrated the comparative study of Islamic and conventional banks service quality and its relationship with bank image in Bangladesh. The findings of the study showed that customers of Islamic banks have generated exceptional bank image incorporating high service quality, satisfaction and positive service quality.…”