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An Exploration Of Customers’ Switching Behavior In Islamic Banking Industry

Author

Listed:
  • Ali Rama

    (Islamic State University (UIN) Syarif Hidayatullah Jakarta)

Abstract

The existence of the switching behavior among Islamic bank customers may affect to the survival of the Islamic banks of the country. Switching behavior is mostly as an outcome of the negative service experience that may be related to several factors. The purpose of the study is to provide an insight of the drivers that lead to a bank customer switching behavior from one Islamic bank to another bank. The study employed survey method through questionnaire instrument and distributed to Islamic banking customers in several areas of Banten Province, Indonesia. The result of statistical analysis shows that customer satisfaction, service quality, shariah compliance, prices and involuntary switching have their significant effect on customers’ switching behavior in the Islamic banks. However, service failure and advertisement are not statistically significant in driving bank switching. Therefore, the Islamic bank manager should shape their business model around customers’ needs and focuses operational improvements on customers’ most valued interactions.

Suggested Citation

  • Ali Rama, 2017. "An Exploration Of Customers’ Switching Behavior In Islamic Banking Industry," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 2(2), pages 221-250, February.
    • Handle: RePEc:idn:jimfjn:v:2:y:2017:i:2d:p:221-250
    DOI: https://doi.org/10.21098/jimf.v2i2.653
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    More about this item

    Keywords

    Switching behavior; Customer Satisfaction; Service Quality; Shariah Compliance; Prices;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General
    • D10 - Microeconomics - - Household Behavior - - - General

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