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An examination of the relationship between service quality perception and customer satisfaction: A SEM approach towards Malaysian Islamic banking


  • Muslim Amin
  • Zaidi Isa


Purpose - This study attempts to examine the relationship between service quality perception and customers' satisfaction in Malaysian Islamic banking using the SEM approach. Design/methodology/approach - This model starts with SERVQUAL measurement scales consisting of six dimensional structures: tangibles, reliability, responsiveness, assurance, and empathy, and plus the compliance dimensions to measure Malaysian Islamic banking service quality. Respondents are the customers (Muslim and non-Muslim) who visit the bank counters. They must have an account with one of the full-fledged Islamic banking and dual-banking systems. Findings - The results showed that the proportion of Malaysian Muslims' awareness of the Islamic banking products and services were high compared to non-Muslim customers. The majority of the Islamic banking customers were satisfied with the overall service quality provided by their banks. The findings suggest that the standard model of Islamic banking service quality dimensions should consist of the six dimensions and good determinants of satisfaction. The relationship between service quality and customer satisfaction was significant. Research limitations/implications - Further research should be considered in order to gather more information regarding service quality and customer satisfaction dimensions in the context of Malaysian Islamic banking industry. Practical implications - The six dimensions of SERVQUAL represent a valid instrument to measure service quality in Malaysian Islamic banking. Providing financial counseling to attract Muslim customers to use more Islamic banking products and services is critical, where 60 percent of the Malaysian population is Muslim. There is a potential target market for Islamic banking that needs be concerned. Originality/value - This research is important in line with the obvious cross-cultural and religious differences between these two key customer segments; Muslims and non-Muslims. In the Malaysian context, there is a strategic dimension that needs to be understood.

Suggested Citation

  • Muslim Amin & Zaidi Isa, 2008. "An examination of the relationship between service quality perception and customer satisfaction: A SEM approach towards Malaysian Islamic banking," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 1(3), pages 191-209, August.
  • Handle: RePEc:eme:imefpp:v:1:y:2008:i:3:p:191-209

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    References listed on IDEAS

    1. Amin, Sajeda & Rai, Ashok S. & Topa, Giorgio, 2003. "Does microcredit reach the poor and vulnerable? Evidence from northern Bangladesh," Journal of Development Economics, Elsevier, vol. 70(1), pages 59-82, February.
    2. Pitt, M.M. & Khandker, S.R., 1996. "Household and Intrahousehold Impact of the Grameen Bank and Similar Targeted Credit Programs in Bangladesh," World Bank - Discussion Papers 320, World Bank.
    3. A. Mushtaque R. Chowdhury & Abbas Bhuiya, 2004. "The wider impacts of BRAC poverty alleviation programme in Bangladesh," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(3), pages 369-386.
    4. Ahmed, Syed Masud & Adams, Alayne M. & Chowdhury, Mushtaque & Bhuiya, Abbas, 2000. "Gender, socioeconomic development and health-seeking behaviour in Bangladesh," Social Science & Medicine, Elsevier, vol. 51(3), pages 361-371, August.
    5. Jaim, W. M. H., 1986. "Financing The Poverty Stricken Rural Poor In Bangladesh," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 9(2).
    6. Mosley, Paul & Hulme, David, 1998. "Microenterprise finance: Is there a conflict between growth and poverty alleviation?," World Development, Elsevier, vol. 26(5), pages 783-790, May.
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    Cited by:

    1. Ali, Muhammad & Syed ali, Raza & Chin-Hong, Puah, 2015. "Factors affecting intention to use Islamic personal financing in Pakistan: Evidence from the modified TRA model," MPRA Paper 66023, University Library of Munich, Germany.
    2. Sayyed Hassan Mirhosseini Ardakani & Mohammad Shaker Ardakani & Mohammad Fotouhi Ardakani, 2015. "A Study about Customer Satisfaction of e-Service Quality of Point of Sale (POS)," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 1(2), pages 120-131, June.
    3. repec:eur:ejesjr:27 is not listed on IDEAS
    4. Ali, Muhammad & Raza, Syed Ali, 2015. "Measurement of Service Quality Perception and Customer Satisfaction in Islamic Banks of Pakistan: Evidence from Modified SERVQUAL Model," MPRA Paper 64039, University Library of Munich, Germany.
    5. repec:rss:jnljfm:v2i1p2 is not listed on IDEAS
    6. repec:eur:ejesjr:33 is not listed on IDEAS


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