What drives to adopt Islamic banking products and services: is it shariah compliance or convenience?

Abstract

Purpose The main issue is whether customers prefer convenience over Shariah compliance or the opposite when they decide their Islamic banking needs. The purpose of this paper is to explore why customers adopt Islamic banking products and services: Shariah compliance or convenience? Design/methodology/approach Using convenience sampling, 310 respondents’ data were collected through online survey. For testing the fit and hypotheses of the proposed model, AMOS 25 software and Smart-PLS 4.0 software have been used. Findings Attitude, Islamic value and convenience have significant determinants of Islamic banking products and services. Shariah compliance has no direct or indirect influence on neither intention nor actual behaviour to adopt Islamic banking services. Furthermore, gender has no such differential effect on the adoption. Practical implications Managers and marketers of Islamic banks may benefit from the findings of this study, which demonstrate fresh insights regarding the factors which help in strategy formulations to promote Islamic banking services. Originality/value The growth of Islamic banks, branches and windows is remarkable in both Muslim-majority and Muslim-minority countries in the world. This paper postulates the behavioural finance studies in Islamic banking and finance research stream by extending the theory of planned behaviour of Ajzen (1985) as all the three new constructs (Islamic value, convenienc and Shariah compliance) are statistically fit for further studies. However, only Islamic value and convenience are the two significant factors which drive customers to take decision in the proposed model. This study gives insights to the bankers and authority about the consumer behaviour.