The intention of religious leaders to use Islamic banking services: the case of Indonesia

Abstract

Purpose The purpose of this study is to ascertain the factors that influence the use of Islamic banking (IB) services by religious leaders in Indonesia using the theory of reasoned action. Customers of sharia banks consist of Muslims and other religions. Based on this fact, this paper analyzes the influence of attitude (ATT), community influence (CI), religious obligation (RO) and subjective norms (SN) to predict the intentions of religious leaders in using IB services in Indonesia. Design/methodology/approach Data were randomly obtained from 119 religious’ leaders with the structural equation modeling technique used for analysis. Findings The empirical analysis data suggest that attitude (ATT) and religious obligations (RO) show a significant impact on the intentions of religious leaders to use IB services, while community influence and subjective norms have a negative impact on the intentions of Indonesian religious leaders in using IB services. Practical implications This study aims to assist Islamic bank managers in Indonesia to formulate appropriate Islamic marketing strategies and policies to increase customer trust through comprehensive socialization to religious communities. The strategy is a necessity, especially because the government is targeting a 10% growth by 2020. Furthermore, bank managers need to develop in-depth insights into their operations to attract religious leaders’ intentions. The fact shows that the stronger the understanding of individual religion, the greater their intention in using IB services. Originality/value Because of the increasing interest in adopting IB in Indonesia, this study claims three essential contributions. Firstly, it aims to examine the intention of religious leaders, namely, Islam, Christianity, Catholicism, Hinduism, Buddhism and Confucianism, in assisting IB managers to design a strategy better than conventional banks. Secondly, the study findings are expected to benefit the development of literature in accordance with the economic conditions of certain religions. Thirdly, this study provides an insight into the inclusive attitude of religious leaders and their intention to adopt the economic structure of other religions.

Potential demand for Islamic banking: examining the Islamic consumer behavior as driving factor

“…Some previous empirical findings revealed the importance of psychological aspects and personal decisions in deciding to adopt Islamic banking, especially in some countries with a Muslim majority, such as the existence of subjective norms and religious obligations (Lajuni et al, 2017;Bananuka et al, 2019;Maryam et al, 2019), behavioral beliefs and religious understanding (Mahdzan et al, 2017;Mbawuni and Nimako, 2017;Hassan et al, 2020). The fact showed that the stronger the understanding of individual religion, the greater a person's intention to use IB services (Janah et al, 2020). In countries with Muslim minorities, utilizing community psychological factors is considered an effective way to take advantage of the potential demand for Islamic banking.…”

“…Some empirical findings also support this theoretical statement by stating that Islamic religiosity and social influence are two of the most important reasons why people adopt Islamic banking (Amin et al, 2011;Awan and Azhar, 2014;Lajuni et al, 2017;Mohanachandran and Normala, 2019;Charag et al, 2020;Sudarsono et al, 2021). Furthermore, it was revealed that psychological and personal decisions such as the existence of subjective norms and religious obligations (Bananuka et al, 2019;Maryam et al, 2019), behavioral beliefs and religious understanding (Mahdzan et al, 2017;Mbawuni and Nimako, 2017;Hassan et al, 2020;Janah et al, 2020) are some important factors in the analysis of demand for Islamic banking.…”

“…According to the increasingly competitive development of Islamic banking, consideration of the adoption of Islamic banking services is not only based on Islamic religiosity, but personal rationality also strengthens the reasons for choosing Islamic banking. Competitiveness factors such as customer satisfaction, service quality and the accessibility of the banks (Hamzah et al, 2015), perceived advantages (Mahdzan et al, 2017;Mbawuni and Nimako, 2017), customer awareness (Ali and Puah, 2017) and also Islamic lifestyle (Kaabachi and Obeid, 2016;Janah et al, 2020) has become important parts of individual decisions in the demand for Islamic banks. Although many determinants have been predicted to affect the level of demand for Islamic banks, a religious reason is still believed to be an important reason behind all the reasons that drive the potential demand for Islamic banking services.…”

Analysis of Investment Decisions at BMT Latansa Gontor Ponorogo

“…According to Ajzen (1991), the stronger a person's intention to perform a specific behavior, the greater the behavior. The theory is used to examine the relationship between attitudes, beliefs, behavior, and intentions (Janah et al, 2020). Nature et al ( 2012) also developed a theory of reasoned action to determine a person's level of religiosity to use Islamic finance in the Klang Valley, Malaysia.…”

The Inclusivism of Religious Figures Amid a Plurality of Beliefs

“…Three main ideas are interrelated from inclusivism, namely; (1) the substance of faith and worship is more important than a formal and literal religious symbolism; (2) religious messages, which are eternal in essence and universal in their meaning, must always be reinterpreted by each generation of the people according to the context of the times at hand; and (3) absolute truth belongs only to God, so no one can be sure that their understanding of God's message is the truest, truer, or better than other people's understanding. This group emphasizes the importance of tolerance towards people of the same faith and between religious communities because religious differences are seen as universal human nature [8].…”