Service Quality of Islamic Banks: A Cultural Perspective
Keywords:
Customer Loyalty, Customer Satisfaction, Islamic Banking, PAKSERV, Service Quality.
Abstract
The purpose of this paper is to examine the relationship between culturally-based service quality measure on customer satisfaction and loyalty in the Malaysian Islamic banking context. This study utilises the PAKSERV model, a cultural-based instrument together with additional dimensions compliance from CARTER model. A survey questionnaire was utilised to examine the relationships. Data were analysed using PLS-SEM. The result shows that five of the service quality dimensions have significant relationships with customer satisfaction. Compliance, the additional dimension, had been found to be the most influential. This study also reinforces the relationship between satisfaction and loyalty. The compliance dimension added to the PAKSERV measure that denotes religious belief enhances the cultural elements of service quality measure for Islamic banks.
References
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Al-Zaabi, O. S. H. A. (2006). Quality service in the UAE. (Doctoral thesis, Durham University, Durham, UK).
Amin, M., & Isa, Z. (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, 1(3), 191–209.
Amine, A. (1998). Consumers’ true brand loyalty: The central role of commitment. Journal of Strategic Marketing, 6, 305–319.
Badara, M. S., Mat, N. K. M., Mujtaba, A. M., Al-Refai, A. N., Badara, A. M., & Abubakar, F. M. (2013). The direct effect of service quality dimensions on customer satisfaction and customer loyalty in Nigerian Islamic bank. Scientific & Academic Publishing Management3, 3(1), 6–11.
Berry, L. L., Lepkowith, E. K., & Clark, T. (1988). In services, what’s in a name? Harvard Business Review, 66, 28–30.
Camarero, C. (2007). Relationship orientation or service quality? What is the trigger of performance in financial and insurance services? International Journal of Bank Marketing, 25(6), 406–426.
Chomeya, R. (2010). Quality of psychology test between Likert scale 5 and 6 points. Journal of Social Sciences, 6(3), 399–403.
Choudhury, K. (2013). Service quality and customers’ purchase intentions: An empirical study of the Indian banking sector. International Journal of Bank Marketing, 31(7), 529–543.
Cui, C. C., Lewis, B. R., & Park, W. (2003). Service quality measurement in the banking sector in Korea. International Journal of Bank Marketing, 21, 191–201.
Fisk, R. P., & Grove, S. J. (1995). Service performance as drama: Quality implications and measurement. In P. Kunst & J. Lemmink (Eds.), Managing Service Quality (pp. 107–119).
Gerrard, P., & Cunningham, B. (2001). Singapore's undergraduates: How they choose which bank to patronise. International Journal of Bank Marketing, 19(3), 104–114.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis, 7. Upper Saddle River, New Jersey: Pearson Prentice Hall.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2014). A primer on partial least squares structural equation modelling (PLS-SEM). Thousand Oaks: Sage.
Haron, S., Ahmad, N., & Planisek, S. L. (1994). Bank patronage factors of Muslim and Non-Muslim customers. International Journal of Bank Marketing, 12(1), 32–40. https://doi.org/10.1108/02652329410049599
Hawke, A., & Heffernan, T. W. (2006). Interpersonal liking in lender-customer relationships in the Australian banking sector. International Journal of Bank Marketing, 24(3), 140–157.
Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. Beverly Hills: Sage.
Hofstede, G. (2001). Culture's consequences: Comparing values, behaviours, institutions, and organisations across nations. Thousand Oaks, CA: Sage.
Iacobucci, D., Grayson, K., & Ostrom, A. (1994). Customer satisfaction fables. Sloan Management Review, 35(4), 93–96.
Imrie, B. C. (2013). The influence of social capital on service quality evaluation. Management Decision, 51(4), 871–889.
Jain, S., & Jain, S. K. (2015). Does the outcome quality matter? An investigation in the context of banking services in an emerging market. Journal of Consumer Marketing, 32(5), 341–355.
Jay, K., Zhang, T., & Bilgihan, A. (2015). Customer loyalty: A review and future directions with a special focus on the hospitality industry. International Journal of Contemporary Hospitality Management, 27(3), 379–414. https://doi.org/http://dx.doi.org/10.1108/MRR-09-2015-0216
Karami, M., Malek, M. M., & Dubinsky, A. J. (2016). Cultural values and consumers’ expectations and perceptions of service encounter quality. International Journal of Pharmaceutical and Healthcare Marketing, 10(1), 2–26.
Kashif, M., Shukran, S. W. S., Rehman, M. A., & Sarifuddin, S. (2015). Customer satisfaction and loyalty in Malaysian Islamic banks: A PAKSERV investigation. International Journal of Bank Marketing, 33(1), 23–40.
Kashif, Muhammad, Rehman, M. A., & Pilelienė, L. (2016). Customer perceived service quality and loyalty in Islamic banks. The TQM Journal, 28(1), 62–78. https://doi.org/10.1108/TQM-01-2014-0006
Kim, C. S., & Aggarwal, P. (2016). The customer is king: Culture-based unintended consequences of modern marketing. Journal of Consumer Marketing, 33(3), 193–201.
Kueh, K., & Voon, B. H. (2007). Culture and service quality expectations: evidence from generation Y consumers in Malaysia. Managing Service Quality, 17(6), 656–680.
Ladhari, R. (2008). Alternative measures of service quality: A review. Managing Service Quality, 18(1), 65–86.
Ladhari, R., Souiden, N., & Ladhari, I. (2011). Determinants of loyalty and recommendation: The role of perceived service quality, emotional satisfaction and image. Journal of Financial Services Marketing, 16(2), 111–124.
Laroche, M., Uelschy, L. C., Abe, S., & Cleveland, M. Yannopoulos, P. P. (2004). Service quality perceptions and customer satisfaction: Evaluating the role of culture. Journal of International Marketing, 12(3), 58–85.
Lee, J. A., Garbarino, E., & Lerman, D. (2007). How cultural differences in uncertainty avoidance affect product perceptions. International Marketing Review, 24(3), 330–349.
Malhotra, N. K., Ulgado, F. M., Agarwal, J., Shainesh, G., & Wu, L. (2005). Dimensions of service quality in developed and developing economies: Multi-country cross-cultural comparisons. International Marketing Review, 22(3), 256–278.
Martinez, J. A., & Martinez, L. C. (2010). Rethinking perceived service quality: An alternative to hierarchical and multidimensional models. Total Quality Management and Business Excellence, 21(1), 93–118.
Ndubisi, N. O. (2007). Relationship marketing and customer loyalty. Marketing Intelligence & Planning, 25(1), 98–106.
Osman, ’Ismah. (2011). The impact of corporate image on customer loyalty of Islamic Banks in Malaysia: Integrating resource-based and institutional theory (Unpublished doctoral dissertation). International Islamic University Malaysia, Malaysia.
Othman, A., & Owen, L. (2001). Adopting and measuring customer service quality (SQ) in Islamic Banks: A case study in Kuwait Finance House. International Journal of Islamic Financial Services, 3(1), 1–26.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A conceptual model of service quality and its implication for future research ( SERVQUAL ). Journal of Marketing, 49, 41–50.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). SERVQUAL: A multiple-item scale for measuring customer perceptions of service quality. Journal of Retail, 64(1), 14–40.
Prakash, A., & Mohanty, R. P. (2013). Understanding service quality. Production Planning and Control, 24(12), 1050–1065.
Raajpoot, N. (2004). Reconceptualising service encounter quality in non-western context. Journal of Service Research, 7(2), 181–201.
Reeves, C. A., & Bednar, D. A. (1994). Defining quality: Alternatives and implications. Academy of Management Review, 19(3), 419–445.
Rehman, A. A. (2012). Customer satisfaction and service quality in Islamic banking. Qualitative Research in Financial Markets, 4(2/3), 165 – 175.
Saunders, S. G. (2008). Measuring and applying the PAKSERV service quality construct: Evidence from a South African cultural context. Managing Service Quality, 18(5), 442–456.
Shafie, S., Azmi, W. N. W., & Haron, S. (2004). Adopting and measuring customer service quality in Islamic banks: A case study of Bank Islam Malaysia Berhad. Journal of Muamalat and Islamic Finance Research, 1(1), 2–19.
Shariff, R. A. B. M. (2013). Service quality in Islamic and conventional banks in Malaysia: An explorative and comparative analysis (Unpublished doctoral dissertation). Durham University, UK.
Souiden, N., & Rani, M. (2015). Consumer attitudes and purchase intentions toward Islamic banks : The influence of religiosity. International Journal of Bank Marketing, 33(2), 143–161.
Strandberg, C., Wahlberg, O., & Ohman, P. (2012). Challenges in serving the mass affluent segment: Bank customer perceptions of service quality. Managing Service Quality, 22(4), 359–385.
Tahir, M. T., & Bakar, N. M. A. (2007). Service quality gap and customers’ satisfaction of commercial banks in Malaysia. International Review of Business Research Papers, 3(4), 327–336.
Tsoukatos, E., & Rand, G. K. (2007). Cultural influences on service quality and customer satisfaction: Evidence from Greek insurance. Managing Service Quality, 17(4), 467–485.
Veloutsou, C., Daskou, S., & Daskou, A. (2004). Are the determinants of bank loyalty brand specific? Journal of Financial Services Marketing, 9(2), 113–125.
Winsted, F. K. (1997). The service experience in two cultures: A behavioural perspective. Journal of Retailing, 73(3), 337–360.
Witkowski, T. H., & Wolfinbarger, M. F. (2001). The formality dimension of service quality in Thailand and Japan. Advances in Consumer Research, 28, 153–160.
Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The behavioral consequences of service quality. Journal of Marketing, 60(2), 31–46.
Al-Zaabi, O. S. H. A. (2006). Quality service in the UAE. (Doctoral thesis, Durham University, Durham, UK).
Amin, M., & Isa, Z. (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, 1(3), 191–209.
Amine, A. (1998). Consumers’ true brand loyalty: The central role of commitment. Journal of Strategic Marketing, 6, 305–319.
Badara, M. S., Mat, N. K. M., Mujtaba, A. M., Al-Refai, A. N., Badara, A. M., & Abubakar, F. M. (2013). The direct effect of service quality dimensions on customer satisfaction and customer loyalty in Nigerian Islamic bank. Scientific & Academic Publishing Management3, 3(1), 6–11.
Berry, L. L., Lepkowith, E. K., & Clark, T. (1988). In services, what’s in a name? Harvard Business Review, 66, 28–30.
Camarero, C. (2007). Relationship orientation or service quality? What is the trigger of performance in financial and insurance services? International Journal of Bank Marketing, 25(6), 406–426.
Chomeya, R. (2010). Quality of psychology test between Likert scale 5 and 6 points. Journal of Social Sciences, 6(3), 399–403.
Choudhury, K. (2013). Service quality and customers’ purchase intentions: An empirical study of the Indian banking sector. International Journal of Bank Marketing, 31(7), 529–543.
Cui, C. C., Lewis, B. R., & Park, W. (2003). Service quality measurement in the banking sector in Korea. International Journal of Bank Marketing, 21, 191–201.
Fisk, R. P., & Grove, S. J. (1995). Service performance as drama: Quality implications and measurement. In P. Kunst & J. Lemmink (Eds.), Managing Service Quality (pp. 107–119).
Gerrard, P., & Cunningham, B. (2001). Singapore's undergraduates: How they choose which bank to patronise. International Journal of Bank Marketing, 19(3), 104–114.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis, 7. Upper Saddle River, New Jersey: Pearson Prentice Hall.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2014). A primer on partial least squares structural equation modelling (PLS-SEM). Thousand Oaks: Sage.
Haron, S., Ahmad, N., & Planisek, S. L. (1994). Bank patronage factors of Muslim and Non-Muslim customers. International Journal of Bank Marketing, 12(1), 32–40. https://doi.org/10.1108/02652329410049599
Hawke, A., & Heffernan, T. W. (2006). Interpersonal liking in lender-customer relationships in the Australian banking sector. International Journal of Bank Marketing, 24(3), 140–157.
Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. Beverly Hills: Sage.
Hofstede, G. (2001). Culture's consequences: Comparing values, behaviours, institutions, and organisations across nations. Thousand Oaks, CA: Sage.
Iacobucci, D., Grayson, K., & Ostrom, A. (1994). Customer satisfaction fables. Sloan Management Review, 35(4), 93–96.
Imrie, B. C. (2013). The influence of social capital on service quality evaluation. Management Decision, 51(4), 871–889.
Jain, S., & Jain, S. K. (2015). Does the outcome quality matter? An investigation in the context of banking services in an emerging market. Journal of Consumer Marketing, 32(5), 341–355.
Jay, K., Zhang, T., & Bilgihan, A. (2015). Customer loyalty: A review and future directions with a special focus on the hospitality industry. International Journal of Contemporary Hospitality Management, 27(3), 379–414. https://doi.org/http://dx.doi.org/10.1108/MRR-09-2015-0216
Karami, M., Malek, M. M., & Dubinsky, A. J. (2016). Cultural values and consumers’ expectations and perceptions of service encounter quality. International Journal of Pharmaceutical and Healthcare Marketing, 10(1), 2–26.
Kashif, M., Shukran, S. W. S., Rehman, M. A., & Sarifuddin, S. (2015). Customer satisfaction and loyalty in Malaysian Islamic banks: A PAKSERV investigation. International Journal of Bank Marketing, 33(1), 23–40.
Kashif, Muhammad, Rehman, M. A., & Pilelienė, L. (2016). Customer perceived service quality and loyalty in Islamic banks. The TQM Journal, 28(1), 62–78. https://doi.org/10.1108/TQM-01-2014-0006
Kim, C. S., & Aggarwal, P. (2016). The customer is king: Culture-based unintended consequences of modern marketing. Journal of Consumer Marketing, 33(3), 193–201.
Kueh, K., & Voon, B. H. (2007). Culture and service quality expectations: evidence from generation Y consumers in Malaysia. Managing Service Quality, 17(6), 656–680.
Ladhari, R. (2008). Alternative measures of service quality: A review. Managing Service Quality, 18(1), 65–86.
Ladhari, R., Souiden, N., & Ladhari, I. (2011). Determinants of loyalty and recommendation: The role of perceived service quality, emotional satisfaction and image. Journal of Financial Services Marketing, 16(2), 111–124.
Laroche, M., Uelschy, L. C., Abe, S., & Cleveland, M. Yannopoulos, P. P. (2004). Service quality perceptions and customer satisfaction: Evaluating the role of culture. Journal of International Marketing, 12(3), 58–85.
Lee, J. A., Garbarino, E., & Lerman, D. (2007). How cultural differences in uncertainty avoidance affect product perceptions. International Marketing Review, 24(3), 330–349.
Malhotra, N. K., Ulgado, F. M., Agarwal, J., Shainesh, G., & Wu, L. (2005). Dimensions of service quality in developed and developing economies: Multi-country cross-cultural comparisons. International Marketing Review, 22(3), 256–278.
Martinez, J. A., & Martinez, L. C. (2010). Rethinking perceived service quality: An alternative to hierarchical and multidimensional models. Total Quality Management and Business Excellence, 21(1), 93–118.
Ndubisi, N. O. (2007). Relationship marketing and customer loyalty. Marketing Intelligence & Planning, 25(1), 98–106.
Osman, ’Ismah. (2011). The impact of corporate image on customer loyalty of Islamic Banks in Malaysia: Integrating resource-based and institutional theory (Unpublished doctoral dissertation). International Islamic University Malaysia, Malaysia.
Othman, A., & Owen, L. (2001). Adopting and measuring customer service quality (SQ) in Islamic Banks: A case study in Kuwait Finance House. International Journal of Islamic Financial Services, 3(1), 1–26.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A conceptual model of service quality and its implication for future research ( SERVQUAL ). Journal of Marketing, 49, 41–50.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). SERVQUAL: A multiple-item scale for measuring customer perceptions of service quality. Journal of Retail, 64(1), 14–40.
Prakash, A., & Mohanty, R. P. (2013). Understanding service quality. Production Planning and Control, 24(12), 1050–1065.
Raajpoot, N. (2004). Reconceptualising service encounter quality in non-western context. Journal of Service Research, 7(2), 181–201.
Reeves, C. A., & Bednar, D. A. (1994). Defining quality: Alternatives and implications. Academy of Management Review, 19(3), 419–445.
Rehman, A. A. (2012). Customer satisfaction and service quality in Islamic banking. Qualitative Research in Financial Markets, 4(2/3), 165 – 175.
Saunders, S. G. (2008). Measuring and applying the PAKSERV service quality construct: Evidence from a South African cultural context. Managing Service Quality, 18(5), 442–456.
Shafie, S., Azmi, W. N. W., & Haron, S. (2004). Adopting and measuring customer service quality in Islamic banks: A case study of Bank Islam Malaysia Berhad. Journal of Muamalat and Islamic Finance Research, 1(1), 2–19.
Shariff, R. A. B. M. (2013). Service quality in Islamic and conventional banks in Malaysia: An explorative and comparative analysis (Unpublished doctoral dissertation). Durham University, UK.
Souiden, N., & Rani, M. (2015). Consumer attitudes and purchase intentions toward Islamic banks : The influence of religiosity. International Journal of Bank Marketing, 33(2), 143–161.
Strandberg, C., Wahlberg, O., & Ohman, P. (2012). Challenges in serving the mass affluent segment: Bank customer perceptions of service quality. Managing Service Quality, 22(4), 359–385.
Tahir, M. T., & Bakar, N. M. A. (2007). Service quality gap and customers’ satisfaction of commercial banks in Malaysia. International Review of Business Research Papers, 3(4), 327–336.
Tsoukatos, E., & Rand, G. K. (2007). Cultural influences on service quality and customer satisfaction: Evidence from Greek insurance. Managing Service Quality, 17(4), 467–485.
Veloutsou, C., Daskou, S., & Daskou, A. (2004). Are the determinants of bank loyalty brand specific? Journal of Financial Services Marketing, 9(2), 113–125.
Winsted, F. K. (1997). The service experience in two cultures: A behavioural perspective. Journal of Retailing, 73(3), 337–360.
Witkowski, T. H., & Wolfinbarger, M. F. (2001). The formality dimension of service quality in Thailand and Japan. Advances in Consumer Research, 28, 153–160.
Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The behavioral consequences of service quality. Journal of Marketing, 60(2), 31–46.
Published
2020-07-30
How to Cite
Hanafi, S. N. I. M., Maulan, S. B., & Hamid, S. N. A. (2020). Service Quality of Islamic Banks: A Cultural Perspective. International Journal of Islamic Banking and Finance Research, 4(2), 11-21. https://doi.org/10.46281/ijibfr.v4i2.685
Section
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper
Copyright (c) 2020 Siti Nurul Izzati Mohd Hanafi, Suharni Bt. Maulan, Siti Ngayesah Ab. Hamid
This work is licensed under a Creative Commons Attribution 4.0 International License.
