The Determinants Of Islamic Retail Banking Adoption In Malaysia

Abstract

This study aims to examine the factors affecting the adoption of Islamic retail banking (IRB) products and services among the banking customers of Malaysia. The market share of Islamic retail banking remains low despite being in operation for the past 28 years. Therefore, an empirical analysis was conducted to study the usage of Islamic retail banking products and services between the urban and rural banking customers of Malaysia. Comparisons were also made on the usage of Islamic deposits and financing schemes between the Muslim and non-Muslim customers. The findings of the study revealed, relative advantage, promotional efforts, complexity, compatibility and awareness on attributes of Islamic retail banking as the significant determinants of the usage of Islamic retail banking products and services. Thus, the findings of this study serves as a valuable guideline to the banking sector and policy makers to devise appropriate marketing strategies to promote Islamic retail banking products and services aggressively among the banking customers of Malaysia.

Empirical Investigation Into Customer Adoption Of Islamic Banking Services In Tunisia

“…Perceived relative advantage emerged as a predictor of consumer acceptance of Islamic banking services. The finding is in line with those of Thambiah et al (2012), Echchabi & Abd.Aziz (2012b), Amin et al (2013), as well as Abd. Aziz et al (2015).…”

“…In recent years, Islamic banking adoption has gained special attention in academic studies and numerous researches related to this issue have been conducted across the globe. Most of them reported collectively that factors like religious beliefs, bank reputation and image, good social responsibility practices, accessibility of Islamic banks, trust in Islamic banks and their true compliance with Sharia, quality of services (quality and fast banking; quality and attractiveness of offerings, confidentiality), pricing policies (high profit rates and lower cost financing and service charges) and awareness of Islamic banking plays a significant role in consumer decision to adopt this new banking service (Erol & El-Bdour,1990 ;Haron et al1994 ;Gerrad &Cunningham ,1997;Metawa & Almossawi, 1998 ;Dusuki &Abdullah, 2007;Rammal & Zurbruegg, 2007;Amin et al 2011;Thambiah et al 2011Thambiah et al , 2012Wahyuni, 2012 ;Echchabi & Aziz, 2012a and b;Faisal et al 2014;Ismail et al 2014;Abd. Aziz et al 2015;Abou-Youssef et al 2015).…”

“…Moreover, numerous studies highlight that variables such as subjective norm, attitude, perceived behavioural control and perceived attributes of Islamic banking including, relative advantage, complexity, compatibility and uncertainty, are also relevant in influencing customers' intention to adopt it (Thambiah et al 2011(Thambiah et al , 2012Echchabi & Olaniyi, 2012;Echchabi &Aziz, 2012a ;Echchabi & Abd. Aziz, 2012 b;Ayinde & Echchabi, 2012;Amin et al 2013;Echchabi et al 2014;Ayedh et al 2014;Abd Aziz et al 2015, Gumel et al 2015.…”

Understanding Islamic Bank Selection of Customers: A Field Research from Turkish Participation Banks

“…These criteria show us that although IB is different from conventional banks, the customer choices can create a competitive environment. Thambiah, Ramanathan, and Mazumder (2012) conducted a survey in Malaysia to analyze the determinants of Islamic retail bank adoption and found that relative advantage, compatibility, promotional efforts, complexity and consumer awareness seems to have significant relationship in adoption of Islamic retail banking services. Saad (2012) found in the comparative analysis of customer satisfaction in Malaysia that customers are mostly pleased by the quality of services which include competency, friendliness and efficiency of the staff of the both type of banks.…”

Knowledge of Islamic banking and bank customer satisfaction in Afghanistan: an exploratory analysis

“…This study adopted factors used by many other previous studies investigating bank consumers' attitudes using the TRA (see Thambiah et al, 2011Thambiah et al, , 2012Echchabi and Olaniyi, 2012;Echchabi and Aziz, 2012;Ayedh et al, 2014;Gumel et al, 2015). The factors affecting bank product selection include religion, the influence of family and friends, bank quality, ethical considerations, credibility, and convenience.…”