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Determinants Of Indonesian Conventional And Islamic Bank Depositor Trust During The Covid-19 Pandemic

Author

Listed:
  • Eko Fajar Cahyono

    (Faculty of Economics and Business, Universitas Airlangga, Indonesia)

  • Lina Nugraha Rani

    (Faculty of Economics and Business, Universitas Airlangga, Indonesia)

  • M. Fariz Fadillah Mardianto

    (Faculty of Science and Technology, Universitas Airlangga, Indonesia)

Abstract

Depositor trust plays an essential role in the banking sector. The main objective of this study is to test several factors that significantly affect depositors’ confidence in conventional and Islamic banks in Indonesia during the COVID-19 pandemic. We conducted qualitative research with a sample of 217 customers who had a minimum of two bank accounts, one conventional, and one Islamic. In a questionnaire, customers were asked their opinions related to indicators of the variables studied, such as depositor trust, and their perceptions of inflation, conventional bank interest, the equivalent yield rate of Islamic banks, and industry perception Productivity Index. The results of the questionnaire were analysed using the partial least squares (PLS) method. The PLS analysis results show that the indicators related to conventional bank interest and the equivalent yield rate of Islamic banks significantly affected depositors’ trust and hands. In other words, customers were influenced when making bank deposits by the factors related to conventional bank interest and the equivalent yield rate of Islamic banks. The external aspect of the industrial production index based on the PLS test had a significant effect on depositors’ trust in both types of bank. In contrast, the external factor of inflation did not significantly affect depositors’ trust in either conventional or Islamic banks. Therefore, based on the PLS-SEM results, conclusions can be drawn regarding the factors influencing depositor trust.

Suggested Citation

  • Eko Fajar Cahyono & Lina Nugraha Rani & M. Fariz Fadillah Mardianto, 2021. "Determinants Of Indonesian Conventional And Islamic Bank Depositor Trust During The Covid-19 Pandemic," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 7(Special I), pages 1-32, March.
  • Handle: RePEc:idn:jimfjn:v:7:y:2020:i:sia:p:1-32
    DOI: https://doi.org/10.21098/jimf.v7i1.1352
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    Citations

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    Cited by:

    1. I Ketut Suyasa & Adler Haymans Manurung & Jhonni Sinaga & Amran Manurung, 2023. "Determinants of Bank Management Confidence Level in Indonesia moderated by Bank Scale," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 13(3), pages 1-7.
    2. Ammari, Aymen & Allodi, Evita & Salerno, Dario & Stella, Gian Paolo, 2023. "An asymmetrical approach to understanding consumer characteristics in banking trust during the COVID-19 pandemic in Italy," Research in International Business and Finance, Elsevier, vol. 64(C).

    More about this item

    Keywords

    Depositor trust; Depositor funds; Macroeconomic conditions; PLS-SEM;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates

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