The non-economic consequences of disclosure in Islamic banks

Abstract

This paper examines the effect of sharia; social and financial (SSF) disclosure on stakeholders' loyalty towards Islamic banks. It also examines to what extent trust and satisfaction mediate this effect. It uses data collected from 600 respondents to survey questionnaires disseminated to stakeholders from 15 countries dealing with Islamic banks. Structural equation modeling (SEM) is used with a partial least squares (PLS) approach to test the research hypotheses. The results indicate that there is a significant association of disclosure on stakeholders' trust, satisfaction, and loyalty. The results also indicate that there is a partial mediating of trust and satisfaction in the relationship between disclosure and loyalty. This paper is one of the first studies examining the effect of disclosure on stakeholders' loyalty. We offer novel findings which have theoretical and practical implications for Islamic banks and their stakeholders.

The determinants of AAOIFI governance disclosure in Islamic banks

“…To do so, IBs will highlight their AAOIFI governance standards, and that, in turn, will increase their reputation and improve the confidence of current clients and, as a consequence, engage with new investors and realise a higher level of trust from the public in IBs. This implication is supported by the result of El-Halaby et al (2018) which suggested that IBs should improve the level of disclosure to engage more clients, based on their faith and loyalty of following sharia compliance.…”

Customer Loyalty towards Islamic Banks: The Mediating Role of Trust and Attitude

“…Financial transactions with Islamic banks are compliant with Shariah law [15,16]. Islamic banks face stiff competition from conventional banks concerning the financial services and products on offer [17,18]. Customer retention and loyalty are the fundamental strategies for a financial service provider's business sustainability in the longterm evolving economy [3].…”

Marketing Sharia, Customer Satisfaction, Religiosity, Financing, and Customer Loyalty

“…According to [3], customer satisfaction is a measure in terms of products, services, and others, which exist in a company that can exceed or meet customer expectations. When a customer feels that his expectation has been achieved, an emotion will emerge that the customer has been served and treated, particularly by the company, making the customer continue to use products from the organization.…”

“…Customer satisfaction is dynamic, depending on the service received with customers' expectations in mind. Research [3], [5], and [13] found that satisfaction had a positive effect on customer loyalty.…”