Advertisement

Factors affecting Islamic banking behavioral intention: the moderating effects of customer marketing practices and financial considerations

  • Mohammad Enamul Hoque
  • M. Kabir HassanEmail author
  • Nik Mohd Hazrul Nik Hashim
  • Tarek Zaher
Original Article

Abstract

This paper examines the determinants of potential customers’ intention to purchase products and services from Islamic banks and the moderating effects of customer marketing practices and financial considerations. A research framework is developed which links communication considerations, financial considerations, customer attitudes, and behaviors. The questionnaire approach, confirmatory factor analysis, and hierarchical regression are used to examine the extent and direction of the relationship within the conceptualized research framework. We find, apart from perceived ease of online banking, that all conceptualized factors are important determinants of customers’ behavioral intention in Islamic banking. This study also finds that, with the exception of perceived risk, all moderators (namely customer–bank relationship, advertising, perceived ease of online banking, perceived potential benefits, and profit–loss sharing approach) intensify the customer attitude–behavioral intention nexus. Islamic banks should adopt various customer–bank relationship strategies and advertising to attract more customers. Further, Islamic banks may use simplified Arabic terms for products and services on their Web sites and online banking portals to convey their intended massage to non-Muslim customers as well.

Keywords

Behavioral intention Islamic banking Profit–loss sharing Theory of planned behavior Malaysia 

Notes

References

  1. Abd Aziz, N. 2018. The influence of coproduction’s factors and corporate image toward attitudinal loyalty: Islamic financial banking services delivery in Malaysia. Journal of Islamic Marketing 9(2): 421–438.Google Scholar
  2. Abou-Youssef, M.M.H., W. Kortam, E. Abou-Aish, and N. El-Bassiouny. 2015. Effects of religiosity on consumer attitudes toward Islamic banking in Egypt. International Journal of Bank Marketing 33(6): 786–807.Google Scholar
  3. Ahmed, H. 2011. Product development in Islamic banks. Edinburgh: Edinburgh University Press.Google Scholar
  4. Ajzen, I. 1991. The theory of planned behavior. Organizational Behavior and Human Decision Processes 50(2): 179–211.Google Scholar
  5. Albashir, W.A., Y. Zainuddin, and S.K. Panigrahi. 2018. The acceptance of Islamic banking products in Libya: A theory of planned behavior approach. International Journal of Economics and Financial Issues 8(3): 105–111.Google Scholar
  6. Al-Qasa, K., F.M. Isa, and S. Othman. 2013. Factors affecting intentions to use banking services in Yemen. Journal of Internet Banking and Commerce 18(2): 2–14.Google Scholar
  7. Alam, S.S., H. Janor, Z. Jano, C.A. Chel-Wel, and N. Ahsan. 2012. Is religiosity an important factor in influencing the intention to undertake Islamic home financing in Klang Valley? World Applied Sciences Journal 19(7): 1030–1041.Google Scholar
  8. Alrubaiee, L., and N. Al-Nazer. 2010. Investigate the impact of relationship marketing orientation on customer loyalty: The customer’s perspective. International Journal of Marketing Studies 2(1): 155–174.Google Scholar
  9. Amin, H. 2013. Factors influencing Malaysian bank customers to choose Islamic credit cards: Empirical evidence from the TRA model. Journal of Islamic Marketing 4(3): 245–263.Google Scholar
  10. Amin, H., A.-R. Abdul-Rahman, and D.A. Razak. 2014a. Theory of Islamic consumer behaviour: An empirical study of consumer behavior of Islamic mortgage in Malaysia. Journal of Islamic Marketing 5(2): 273–301.Google Scholar
  11. Amin, H., M. Ghazali, and R. Supinah. 2010. Determinants of Qardhul Hassan financing acceptance among Malaysian bank customers: An empirical analysis. International Journal of Business and Society 11(1): 1–16.Google Scholar
  12. Amin, H., A.R.A. Rahman, S. Laison Sondoh Jr., and A.M.C. Hwa. 2011. Determinants of customers’ intention to use Islamic personal financing. Journal of Islamic Accounting and Business Research 2(1): 22–42.Google Scholar
  13. Amin, M., S. Rezaei, and M. Abolghasemi. 2014b. User satisfaction with mobile websites: the impact of perceived usefulness (PU), perceived ease of use (PEOU) and trust. Nankai Business Review International 5(1): 258–274.Google Scholar
  14. Armstrong, G., and P. Kotler. 2010. Principle of marketing. New York: Prentice Hall.Google Scholar
  15. Bank Negara Malaysia. 2015. Quarterly bulletin (october). Kuala Lumpur: Bank Negara Malaysia.Google Scholar
  16. Bashir, I., and C. Madhavaiah. 2015. Consumer attitude and behavioural intention towards Internet banking adoption in India. Journal of Indian Business Research 7(1): 67–102.Google Scholar
  17. Butt, M., and M. Aftab. 2013. Incorporating attitude towards halal banking in an integrated service quality, satisfaction, trust and loyalty model in online Islamic banking context. International Journal of BankMarketing 31(1): 6–23.Google Scholar
  18. Butt, M.M., E.C. de-Run, A. U-Din, and D. Mutum. 2018. Religious symbolism in Islamic financial service advertisements. Journal of Islamic Marketing 9(2): 384–401.Google Scholar
  19. Çalık, N., and N.F. Balta. 2006. Consumer satisfaction and loyalty derived from the perceived quality of individual banking services: a field study in eskis ehir from Turkey. Journal of Financial Services Marketing 10(4): 35–149.Google Scholar
  20. Cheng, T., D. Lam, and A. Yeung. 2006. Adoption of internet banking: an empirical study in Hong Kong. Decision Support Systems 42(3): 1558–1572.Google Scholar
  21. Clark, G.L., and A.H. Monk. 2013. Financial institutions, information, and investing-at-a-distance. Environment and Planning A 45(6): 1318–1336.Google Scholar
  22. Csikósová, A., K. Čulková, and M. Janošková. 2016. Evaluation of quantitative indicators of marketing activities in the banking sector. Journal of Business Research 69(11): 5028–5033.Google Scholar
  23. Dar, H., and J. Presley. 2000. Lack of profit loss sharing in Islamic banking: Management and control imbalances. International Journal of Islamic Financial Services 2(2): 3–18.Google Scholar
  24. Davis, F. 1989. Perceived usefulness, perceived ease of use, and user acceptance of information technology’. MIS Quarterly 13(4): 319–339.Google Scholar
  25. Duffett, R.G. 2015. Facebook advertising’s influence on intention-to-purchase and purchase amongst Millennials. Internet Research 25(4): 498–526.Google Scholar
  26. Eisingerich, A.B., and S.J. Bell. 2006. Relationship marketing in the financial services industry: The importance of customer education, participation and problem management for customer loyalty. Journal of Financial Services Marketing 10(4): 86–97.Google Scholar
  27. Fang, E.S. 2016. Three decades of repackaging Islamic finance in international markets. Journal of Islamic Marketing 7(1): 37–58.Google Scholar
  28. Featherman, M., and P. Pavlou. 2003. Predicting e-services adoption: A perceived risk facets perspective. International Journal of Human–Computer Studies 59(4): 451–474.Google Scholar
  29. Fishbein, M., and I. Ajzen. 1975. Belief, attitude, intention and behavior: An introduction to theory and research. Reading, MA: Addison-Wesley.Google Scholar
  30. Furqani, H., and R. Mulyany. 2009. Islamic banking and economic growth: Empirical evidence from Malaysia. Journal of Economic Cooperation and Development 30(2): 59–74.Google Scholar
  31. Gaur, S.S., S. Madan, and Y. Xu. 2009. Consumer comfort and its role in relationship marketing outcomes: An empirical investigation. Asia Pacific Advances in Consumer Research 8: 296–298.Google Scholar
  32. Goldsmith, R.E., and B.A. Lafferty. 2002. Consumer response to websites and their influence on advertising effectiveness. Internet Research: Electronic Networking Applications and Policy 12(4): 318–328.Google Scholar
  33. Guriting, P., and N. Ndubisi. 2006. Borneo online banking: Evaluating customer perceptions and behavioural intention. Management Research News 29(1/2): 6–15.Google Scholar
  34. Habermas, J. 1981. The theory of communicative action. Boston, MA: Beacon Press Books.Google Scholar
  35. Hair, J.F., C.M. Ringle, and M. Sarstedt. 2013. Editorial-partial least squares structural equation modeling: Rigorous applications, better results and higher acceptance. Long Range Planning 46(1–2): 1–12.Google Scholar
  36. Heaney, J.-G., and R.E. Goldsmith. 1999. External information search for banking services. International Journal of Bank Marketing 17(7): 305–323.Google Scholar
  37. Homans, G.C. 1961. Social behavior in elementary forms. New York: Harcourt.Google Scholar
  38. Howcroft, B., R. Hamilton, and P. Hewer. 2002. Consumer attitude and the usage and adoption of home-based banking in the United Kingdom. International Journal of Bank Marketing 20(3): 111–121.Google Scholar
  39. Jalil, M.A., and M.K. Rahman. 2014. The impact of Islamic branding on consumer preference towards Islamic banking services: An empirical investigation in Malaysia. Journal of Islamic Banking and Finance 2(1): 209–222.Google Scholar
  40. Karjaluoto, H., M. Mattila, and T. Pento. 2002. Factors underlying attitude formation towards online banking in Finland. International Journal of Banking Marketing 20(6): 261–272.Google Scholar
  41. Kassim, S. 2016. Islamic finance and economic growth: The Malaysian experience. Global Finance Journal 30(1): 66–76.Google Scholar
  42. Kesharwani, A., and S.S. Bisht. 2012. The impact of trust and perceived risk on internet banking adoptionin India: an extension of technology acceptance model. International Journal of Bank Marketing 30(4): 303–322.Google Scholar
  43. Khan, S.R. 1987. Profit and loss sharing as a substitute for Interest in Islamic banking. Savings and Development 11(3): 317–328.Google Scholar
  44. Kotler, P., and G. Armstrong. 2009. Marketing essentials. New York: Prentice Hall.Google Scholar
  45. Kotler, P., S. Burton, K. Deans, L. Brown, and G. Armstrong. 2015. Marketing. Melbourne: Pearson Higher Education AU.Google Scholar
  46. Laitenberger, O., and H.M. Dreyer. 1998. Evaluating the usefulness and the ease of use of a web-based inspection data collection tool. In Metrics, 122.Google Scholar
  47. Lajuni, N., W.P.M. Wong, Y. Yacob, H. Ting, and A. Jausin. 2017. Intention to use Islamic banking products and its determinants. International Journal of Economics and Financial Issues 7(1): 329–333.Google Scholar
  48. Lee, M. 2009. Factors influencing the adoption of Internet banking: An integration of TAM and TPB with perceived risk and perceived benefit. Electronic Commerce Research and Applications 8(3): 130–141.Google Scholar
  49. Leverin, A., and V. Liljander. 2006. Does relationship marketing improve customer relationship satisfaction and loyalty? International Journal of Bank Marketing 24(4): 232–251.Google Scholar
  50. Liu, M.T., et al. 2013. Perceived benefits, perceived risk, and trust: Influences on consumers’ group buying behaviour. Asia Pacific Journal of Marketing and Logistics 25(2): 225–248.Google Scholar
  51. Loureiro, S.M.C., H.R. Kaufmann, and S. Rabino. 2014. Intentions to use and recommend to others: An empirical study of online banking practices in Portugal and Austria. Online Information Review 38(2): 186–208.Google Scholar
  52. Mbawuni, J., and S.G. Nimako. 2017. Determinants of Islamic banking adoption in Ghana. International Journal of Islamic and Middle Eastern Finance and Management 10(2): 264–288.Google Scholar
  53. Mirakhor, A., and I. Zaidi. 2007. Profit-and-loss sharing contracts in Islamic finance. In Handbook of Islamic banking, ed. M.K. Hassan and M.K. Lewis, 49–63. Cheltenham: Edward Elgar Publishing Limited.Google Scholar
  54. Mitchell, V. 1999. Consumer perceived risk: Conceptualisation and models. European Journal of Marketing 33(1/2): 163–195.Google Scholar
  55. Olson, D., and T.A. Zoubi. 2008. Using accounting ratios to distinguish between Islamic and conventional banks in the GCC region. The International Journal of Accounting 43(1): 45–65.Google Scholar
  56. Page, C., and Y. Luding. 2003. Bank managers’ direct marketing dilemmas—customers’ attitudes and purchase intention. International Journal of Bank Marketing 21(3): 147–163.Google Scholar
  57. Penz, E., and M. Hogg. 2015. The role of mixed emotions in consumer behaviour: Investigating ambivalnce in consumers experiences of approach conflicts in online and offline setting. In A focus on consumer behaviours and experiences in an online shopping environment, ed. E.G.P. Limited, 151–179. Bingley: Emerald Group Publishing Limited.Google Scholar
  58. Pollay, R., and B. Mittal. 1993. Here’s the beef: factors, determinants and segments in consumer criticisim of adverstising. Journal of Marketing 57(3): 99–114.Google Scholar
  59. Ramayah, T., J.A.L. Yeap, and R. Siron. 2003. Service quality of a foreign bank: Myth and reality. In Proceedings of the Asia Pacific business environment conference, Shah Alam, Malaysia.Google Scholar
  60. Razak, D.A., and F.M. Taib. 2011. Consumers’ perception on Islamic home financing: Empirical evidences on Bai Bithaman Ajil (BBA) and diminishing partnership (DP) modes of financing in Malaysia. Journal of Islamic Marketing 2(2): 165–176.Google Scholar
  61. Rizwan, M., G. Yaseen, A. Nawaz, and L. Hussain. 2014. Incorporating attitude towards Islamic banking in an integrated service quality, satisfaction, trust and loyalty model. International Journal of Accounting and Financial Reporting 4(2): 456–477.Google Scholar
  62. Shome, A., F. Jabeen, and R. Rajaguru. 2018. What drives consumer choice of Islamic banking services in the United Arab Emirates? International Journal of Islamic and Middle Eastern Finance and Management 11(1): 79–95.Google Scholar
  63. Souiden, N., and M. Rani. 2015. Consumer attitudes and purchase intentions toward Islamic banks: The influence of religiosity. International Journal of Bank Marketing 33(2): 143–161.Google Scholar
  64. Srivastava, K., and N.K. Sharma. 2011. Exploring the multidimensional role of involvement and perceived riskin brand extension. International Journal of Commerce and Management 21(4): 410–442.Google Scholar
  65. Sun, S., T. Goh, K.S. Fam, and Y. Xue. 2012. The influence of religion on Islamic mobile phone banking services adoption. Journal of Islamic Marketing 3(1): 81–98.Google Scholar
  66. Tabachnick, B.G., and L.S. Fidell. 2007. Using multivariate statistics, 5th. Needham Height, MA: Allyn & Bacon.Google Scholar
  67. Taib, F., T. Ramayah, and D. Abdul-Razak. 2008. Factors influencing intention to use diminishing partnership home financing. International Journal of Islamic and Middle Eastern Finance and Management 1(3): 235–248.Google Scholar
  68. Thambiah, S., H. Ismail, and C. Malarvizhi. 2011. Islamic retail banking adoption: A conceptual framework. Australian Journal of Basic and Applied Sciences 5(12): 649–657.Google Scholar
  69. Wahid, N.A., and M. Ahmed. 2011. The effect of attitude toward advertisement on Yemeni female consumers’ attitude toward brand and purchase intention. Global Business and Management Research: An International Journal 3(1): 21–29.Google Scholar
  70. Walsh, S., A. Gilmore, and D. Carson. 2004. Managing and implementing simultaneous transaction and relationship marketing. International Journal of Bank Marketing 22(7): 468–483.Google Scholar
  71. Wang, J.-S., Y.-F. Cheng, and Y.-L. Chu. 2013. Effect of celebrity endorsements on consumer purchase intentions: Advertising effect and advertising appeal as mediators. Human Factors and Ergonomics in Manufacturing & Service Industries 23(5): 357–367.Google Scholar
  72. Xue, D.-F. 2015. Analysis of the influence factors of bank financial products customer satisfaction based on the perceived risk and perceived benefits theory. International Journal of Managerial Studies and Research 3(2): 9–14.Google Scholar
  73. Yiu, C., K. Grant, and D. Edgar. 2007. Factors affecting the adoption of internet banking in Hong Kong –implications for the banking sector. International Journal of Information Management 27: 336–351.Google Scholar

Copyright information

© Springer Nature Limited 2019

Authors and Affiliations

  • Mohammad Enamul Hoque
    • 1
    • 4
  • M. Kabir Hassan
    • 2
    Email author
  • Nik Mohd Hazrul Nik Hashim
    • 1
  • Tarek Zaher
    • 3
  1. 1.Graduate School of BusinessUniversiti Kebangsaan MalaysiaBangiMalaysia
  2. 2.Department of Economics and FinanceUniversity of New OrleansNew OrleansUSA
  3. 3.Indiana State UniversityTerre HauteUSA
  4. 4.University of Creative TechnologyChittagongBangladesh

Personalised recommendations