Customer Satisfaction Level in Islamic Banking and conventional Banking (A Case of Pakistan)
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Published:
2024-04-12
Keywords:
Customer Satisfaction, Banks
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Abstract
The main purpose of this research study was to identify the level of customer’s satisfaction by using the products and services of both Islamic and conventional banks in Pakistan. Furthermore, this research study determined the customer’s satisfaction level in banking in terms of; internet banking, management interaction and the banking environment, service quality in term of SERVQUAL model, ATM facilities, privacy and security The main objective of the study was to investigate the following main points.(1) Customer`s satisfaction level in Islamic and conventional banks. (2) Why customers prefer to choose Islamic banking system in Pakistan? (3) Why customers prefer to choose conventional banking system in Pakistan? It is therefore, a critical literature has been carried out which investigated the real factors through which customer satisfaction take place in banking sector. The closed ended questionnaire has been used in this research study in order to collect research data. To analyze the collected data, cross tabulations and charts have also been used which showed the satisfaction level of the customers of Islamic and conventional banks and also to differentiate between the participant`s responses of Islamic and conventional banks. A large number of factors have been observed from the research study analysis which illustrated that, in Pakistan, customers are more satisfied from the products and services of conventional banks rather than that of Islamic banks. However, in Pakistan, the customer satisfaction in all financial institutions is not as good as according to the standard. In addition, the banking sector is trying to improve all of their products and services and want to make them according to the international standard. But due to various factors such as; the political instability and religious norms, the banking sector is still far behind.
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Customer Satisfaction Level in Islamic Banking and conventional Banking (A Case of Pakistan). (2024). Journal of Management Info, 3(1), 9-20. https://doi.org/10.31580/jmi.v9i1.50
References
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Clemes, M.D., Gan, C. and Kao, T.H. (2007b) “University satisfaction: an empirical analysisâ€, Journal of Marketing for High Education, Vol.17, No.2, pp.292-325.
Collis, J., Hussey, R. (2003) “Business Researchâ€, Basingstoke: Macmillan.
De Vries, H., and A. De Jong (2002) “Dutch study gets up close and personal to iso 9000 in useâ€, Iso Management system.
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Gursoy, D., Swanger, N., (2007) “Performance-enhancing internal strategic factors: impacts on financial successâ€, International Journal of Hospitality Management, No.1, pp.213–227.
Hansemark, O. C. and Albinsson, M. (2004) “Customer satisfaction and retention: the experience of individual employeesâ€, Managing Service Quality, Vol.14, No.1, pp.40-57.
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Haron, S., Ahmad, N. and Planisek, S.L. (1994) “Bank patronage factors of Muslim and non-Muslim customersâ€, International Journal of Bank Marketing, Vol.12, No.1, pp.32-40.
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Kettinger W. J., and Lee, C. C. (1994) “Perceived service quality and user satisfaction with the information services functionâ€, Decision Sciences, Vol.25, No.6, pp.737-766.
Khan, F., Rasli, A. M., Yusoff, R. M., Ahmed, T., ur Rehman, A., & Khan, M. M. (2014). Job Rotation, Job Performance, Organizational Commitment: An Empirical Study On Bank Employees. Journal Of Management Info, 3(1), 33-46.
Khan., F., Rasli., M. A., Yusoff., M. R., & Ahmad, A. (2015). Do Demographic Make a Difference to job Burnout among university academicians? International Journal of Economics and Finanical Issue, 5(Special), 229-237.
Khattak A, N., and Rehman K (2010) “Customer satisfaction and awareness of Islamic banking in Pakistanâ€, African Journal of Business Management, Vol.4, No.5, pp.662-671.
Leeds, B. (1992) “Mystery Shopping' Offers Clues to Quality Serviceâ€, Bank Marketing, Vol.24, No.11, pp. 24-27.
Liao, Z., and Cheung, M. T. (2008) “Measuring consumer satisfaction in Internet banking: a core frameworkâ€, Communications of the ACM, Vol.51, No.4, pp.47–51.
Litan, R, E, (1999) “ATM fees, an economic analysisâ€, available at: www.aba.com/aba/ [Accessed: 23/03/2011].
Lovelock. C., (2000), “Services, Marketing: People, Technology, Strategyâ€, 4thed, Prentie -Hall, Englewood Cliffs, NJ.
Mcandrews, J, J, (2003) “Automated Teller Machine network pricing- A review of literature, available at http://www.rnejournal.com/articles/ [Accessed at: 23/03/2011].
Meuter, M., Ostrom, A and Roundtree, R (2000) “Self-service technology: Understand customer satisfaction with technology-based service encounters, Journal of Marketing, Vol.64, No.3, pp.50-64.
Nupur, J, M, (2010) “E-Banking and Customers’ Satisfaction in Bangladesh: An Analysisâ€, Vol.4, No.4, pp.145-156.
Omer, H. (1992), “The implications of Islamic beliefs and practice on the Islamic financial institutions in the UK: case study of Albaraka International Bank UKâ€, unpublished PhD thesis, Loughborough University, Leicestershire.
Parker, M. (2007) “Malaysia’s Islamic Banking Gathers Steamâ€, Arab News, Vol.23
Parasuraman, A., Berry, L. L. and Zeithaml, V. A. (1991) â€Refinement and reassessment of the SERVQUAL scaleâ€, Journal of Retailing, Vol.67, Vol.4, pp.420-50.
Pikkarainen, T., Pikkarainen, K., Karjaluoto, H., and Pahnila, S. (2004) “Consumer acceptance of online banking: An extension of the technology acceptance modelâ€, Internet Research, Vol.14, No.3, pp.224–235.
Raihan, A (1998) “Information technology and electronic bankingâ€, Bank parikrama, Vol.23, No.3, pp.4.
Raihan, A, Khan, S, R., Alam, M. R. and Rabbi, K. (2001) “Computerization and IT in banking sector: Hindrances and Remediesâ€, Bank Parikrama, Vol.26, No.1, pp.95-133.
Ranganathan, C., and Ganapathy, S. (2002) “Key dimensions of business-to-consumer Web sitesâ€, Information and Management, Vol.39, No.6, pp.457–465.
Rasli, A. M., Bhatti, M. A., Norhalim, N., & Kowang, T. O. (2014). Service Quality in Higher Education Study of Turkish Students in Malausian Universities. Journal of Management Info, 3(1), 1-32.
Rose, Peter. S (1991) “Commercial Bank Managementâ€, Richard D. Irwin Inc., United State of America.
Stewart, K. (1998) “An exploration of customer exit in retail bankingâ€, International Journal of Bank Marketing, Vol. 16, No.1, pp.6-14.
Taylor, S.A., Baker, T.L. (1994) "An assessment of the relationship between service quality and customer satisfaction in the formation of consumers' purchase intentions", Journal of Retailing, Vol.70, No.2, pp.163-1778.
Yoon, C, (2010) “Antecedents of customer satisfaction with online banking in China: The effects of experienceâ€, Computers in Human Behaviour, Vol.26, pp.1296-1304.
Zaher, T., Hassan, M. (2001) “A Comparative Literature Survey of Islamic Finance and Bankingâ€, Financial Markets Institutions and Instruments, Vol.10, No.4, pp. 155-199.
Zeithaml, V. and Bitner, M. (2000), “Services Marketing – Integrating Customer Focus across the Firmâ€, 2nd ed., McGraw-Hill, New York, NY.
Anderson, J. C. and J. A. Narus (1990), “A Model of Distributor Firm and Manufacturing Firm Working Relationships, Journal of Marketingâ€, Vol.54, No.1, pp.42-58.
Ariff, M. (1988). “Islamic Bankingâ€, Asian Pacific Economic Literature, Vol.2, No.2, pp.46-64.
Awan, H, M., and Bukhari K, S., (2011) “Customer’s criteria for selecting an Islamic bank: evidence from Pakistanâ€, Journal of Islamic marketing, Vol.2, No.1, pp.14-27.
Beatty, S. E., Mayer, M., Coleman, J. E., Reynolds, K. E. and Lee, J. (1996), “Customer-sales associate retail relationshipsâ€, Journal of Retailing, Vol.72, No.3, pp.223-47.
Biter, M. J and Hubbert, A. R. (1994) “Encounter satisfaction versus overall satisfaction versus qualityâ€, in Rust, R. T. and Oliver, R. L. (Edi), Service Quality: New Directions in Theory and Practice, Sage, London.
Brady, M. K, Cronin, J. J and Brand, R. R. (2002) “Performance only measurement of service quality: a replication and extensionâ€, Journal of business research, Vol.55, No.1, pp.17-31.
Clemes, M.D., Gan, C. and Kao, T.H. (2007b) “University satisfaction: an empirical analysisâ€, Journal of Marketing for High Education, Vol.17, No.2, pp.292-325.
Collis, J., Hussey, R. (2003) “Business Researchâ€, Basingstoke: Macmillan.
De Vries, H., and A. De Jong (2002) “Dutch study gets up close and personal to iso 9000 in useâ€, Iso Management system.
DeYoung, J. (2001) “The Internet's place in the banking industryâ€, Chicago Fed Letter, No.163, pp.1-4.
Gait, A. H., Worthington, A. C. (2009) “A Primer on Islamic Finance: Definitions, Sources, Principles and Methodsâ€, Department of Accounting, Finance and Economics, Discussion paper No. 009-09, ISSN no. 1836-8123, Griffith University.
Gursoy, D., Swanger, N., (2007) “Performance-enhancing internal strategic factors: impacts on financial successâ€, International Journal of Hospitality Management, No.1, pp.213–227.
Hansemark, O. C. and Albinsson, M. (2004) “Customer satisfaction and retention: the experience of individual employeesâ€, Managing Service Quality, Vol.14, No.1, pp.40-57.
Haron, S and Ahmad, N (1994) “The effects of conventional interest rates and rate of profit on funds deposited with Islamic banking system in Malaysiaâ€, International Journal of Islamic Financial Services, Vol.1, No.4.
Haron, S., Ahmad, N. and Planisek, S.L. (1994) “Bank patronage factors of Muslim and non-Muslim customersâ€, International Journal of Bank Marketing, Vol.12, No.1, pp.32-40.
Hassan, T., Mohamad S and Bader, M, K (2009) “Efficiency of conventional versus Islamic banks: evidence from the Middle Eastâ€, International Journal of Islamic and Middle Eastern Finance and Management, Vol.2, No.1, pp.46-65.
Hegazy, I. (1995) “An empirical comparative study between Islamic and commercial banks’ selection criteria in Egyptâ€, International Journal of Commerce and Management, Vol.5, No.3, pp.46-61.
Iqbal, Z. and Mirakhor, A. (2007) “An Introduction to Islamic Finance: Theory and Practice, Chichesterâ€, John Wiley and Sons Ltd.
Jamal, A and Naser, K. (2002) “Customer satisfaction and retail banking: an assessment of some of the key antecedents of customer satisfaction in retail banking, International Journal of Bank Marketing, Vol.20, No.4, pp.146-160.
Kettinger W. J., and Lee, C. C. (1994) “Perceived service quality and user satisfaction with the information services functionâ€, Decision Sciences, Vol.25, No.6, pp.737-766.
Khan, F., Rasli, A. M., Yusoff, R. M., Ahmed, T., ur Rehman, A., & Khan, M. M. (2014). Job Rotation, Job Performance, Organizational Commitment: An Empirical Study On Bank Employees. Journal Of Management Info, 3(1), 33-46.
Khan., F., Rasli., M. A., Yusoff., M. R., & Ahmad, A. (2015). Do Demographic Make a Difference to job Burnout among university academicians? International Journal of Economics and Finanical Issue, 5(Special), 229-237.
Khattak A, N., and Rehman K (2010) “Customer satisfaction and awareness of Islamic banking in Pakistanâ€, African Journal of Business Management, Vol.4, No.5, pp.662-671.
Leeds, B. (1992) “Mystery Shopping' Offers Clues to Quality Serviceâ€, Bank Marketing, Vol.24, No.11, pp. 24-27.
Liao, Z., and Cheung, M. T. (2008) “Measuring consumer satisfaction in Internet banking: a core frameworkâ€, Communications of the ACM, Vol.51, No.4, pp.47–51.
Litan, R, E, (1999) “ATM fees, an economic analysisâ€, available at: www.aba.com/aba/ [Accessed: 23/03/2011].
Lovelock. C., (2000), “Services, Marketing: People, Technology, Strategyâ€, 4thed, Prentie -Hall, Englewood Cliffs, NJ.
Mcandrews, J, J, (2003) “Automated Teller Machine network pricing- A review of literature, available at http://www.rnejournal.com/articles/ [Accessed at: 23/03/2011].
Meuter, M., Ostrom, A and Roundtree, R (2000) “Self-service technology: Understand customer satisfaction with technology-based service encounters, Journal of Marketing, Vol.64, No.3, pp.50-64.
Nupur, J, M, (2010) “E-Banking and Customers’ Satisfaction in Bangladesh: An Analysisâ€, Vol.4, No.4, pp.145-156.
Omer, H. (1992), “The implications of Islamic beliefs and practice on the Islamic financial institutions in the UK: case study of Albaraka International Bank UKâ€, unpublished PhD thesis, Loughborough University, Leicestershire.
Parker, M. (2007) “Malaysia’s Islamic Banking Gathers Steamâ€, Arab News, Vol.23
Parasuraman, A., Berry, L. L. and Zeithaml, V. A. (1991) â€Refinement and reassessment of the SERVQUAL scaleâ€, Journal of Retailing, Vol.67, Vol.4, pp.420-50.
Pikkarainen, T., Pikkarainen, K., Karjaluoto, H., and Pahnila, S. (2004) “Consumer acceptance of online banking: An extension of the technology acceptance modelâ€, Internet Research, Vol.14, No.3, pp.224–235.
Raihan, A (1998) “Information technology and electronic bankingâ€, Bank parikrama, Vol.23, No.3, pp.4.
Raihan, A, Khan, S, R., Alam, M. R. and Rabbi, K. (2001) “Computerization and IT in banking sector: Hindrances and Remediesâ€, Bank Parikrama, Vol.26, No.1, pp.95-133.
Ranganathan, C., and Ganapathy, S. (2002) “Key dimensions of business-to-consumer Web sitesâ€, Information and Management, Vol.39, No.6, pp.457–465.
Rasli, A. M., Bhatti, M. A., Norhalim, N., & Kowang, T. O. (2014). Service Quality in Higher Education Study of Turkish Students in Malausian Universities. Journal of Management Info, 3(1), 1-32.
Rose, Peter. S (1991) “Commercial Bank Managementâ€, Richard D. Irwin Inc., United State of America.
Stewart, K. (1998) “An exploration of customer exit in retail bankingâ€, International Journal of Bank Marketing, Vol. 16, No.1, pp.6-14.
Taylor, S.A., Baker, T.L. (1994) "An assessment of the relationship between service quality and customer satisfaction in the formation of consumers' purchase intentions", Journal of Retailing, Vol.70, No.2, pp.163-1778.
Yoon, C, (2010) “Antecedents of customer satisfaction with online banking in China: The effects of experienceâ€, Computers in Human Behaviour, Vol.26, pp.1296-1304.
Zaher, T., Hassan, M. (2001) “A Comparative Literature Survey of Islamic Finance and Bankingâ€, Financial Markets Institutions and Instruments, Vol.10, No.4, pp. 155-199.
Zeithaml, V. and Bitner, M. (2000), “Services Marketing – Integrating Customer Focus across the Firmâ€, 2nd ed., McGraw-Hill, New York, NY.