During the last decade, the Islamic banking sector in Brunei Darussalam experienced remarkable and increasingly challenging development in the face of strong competition from conventional banks. The main objective of this paper is to examine the effects of both service quality and product quality, and of satisfaction awareness of Islamic banking in Brunei Darussalam. This study also examines the reasons that consumers select Islamic banking. A questionnaire survey was conducted among Islamic banks’ customers.
The findings show that the indirect effects of service quality and product quality on satisfaction awareness were positive and significant. They also revealed that consumers were aware of Islamic banking products and services to a certain degree; and the reasons for preferring them were profitability and religious principles. As a result, these findings provide the Islamic banking industry with helpful guidelines in its efforts to formulate suitable promotional policies to attract more banking customers. Keywords: Islamic banking, Islamic finance, customer awareness, customer satisfaction, service quality, Brunei Darussalam.
1. INTRODUCTION Customer satisfaction has been perceived as a key factor in finding out why customers leave or stay with a bank. Generally, any bank needs to know how to keep their customers, even if they seem to be satisfied. As competition within the financial services industry is more intense than ever, and as banking companies’ service menus are becoming increasingly comparable, the need to understand bank customer satisfaction is vital (Rose & Marquis, 2006).
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Service quality and product quality are vital elements in determining customer satisfaction, as is customer awareness.
In this context, quality is the key factor and is synonymous with the consumer’s ability to select from a wide array of products and services that provide a closer match to his or her needs and desires (Ho, Lau, Lee & Ip, 2005).
Following this, it is argued that the increasing perception of service quality and product quality will increase customer awareness, which finally increases satisfaction. The relationship between bank customers’ awareness, the quality of service they receive and their level of satisfaction has been investigated in different countries, but there are few studies on Islamic banks.
In regards to Brunei Darussalam, empirical research has never been done, nor have the issues of customer awareness, service quality and product quality, and customer satisfaction of Islamic banking been addressed. This paper aims to fill this gap in the literature. Its main objective is to examine the awareness and satisfaction of Islamic banking in Brunei Darussalam. It is interesting to note that this paper differentiates from other studies on the same topic as it investigates the indirect effects of service quality and product quality on satisfaction through customer awareness (Bashir, 2012).
The remainder of the paper has been organized in the following way: Section 2 provides a literature review. The research method is discussed in Section 3. Section 4 presents the discussion and findings. The conclusion is presented in the final section. ©Society for Business Research Promotion | 38 www. ajbms. org ISSN: 2047-2528 Asian Journal of Business and Management Sciences Vol. 2 No. 10 [38-50] 1. 1 Overview of Brunei’s Islamic Banking Sector Over the past ten years, Islamic banking industry in Brunei Darussalam has grown rapidly.
Although it makes up a small proportion of the country’s financial market, consumer interest in this industry is shown by the fact that they hold 40% of whole banking sector’s assets compared to conventional counterparts that account for 60%. Islamic bank deposits also constitute 36% of total bank deposits compared to conventional bank with 64%, while loans accounted for 48% from Islamic banks compared to 52% from conventional banks. Brunei’s Islamic banking system is currently served primarily by two groups: the Bank Islam Brunei Darussalam (BIBD) and Tabung Amanah Islam Brunei (TIAB).
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This Bank is the first of its kind in Southeast Asia. It is committed to conduct all banking and investment activities on the basis of interest-free profit-loss sharing system. In doing so, it has unveiled a new horizon and ushered in a new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh for doing their banking transactions in line with what is ...
Over the years, these two institutions have gone through a number of structural changes. On 23 September 1991, the first Islamic financial institution in Brunei Darussalam, TAIB, was established. TAIB is not a commercial bank but an Islamic trust fund. It offers services to the public in mainly savings and financial accounts. All of TAIB’s savings accounts are based on the Islamic contract of guaranteed safe custody (al-wadi’ah yad dhamanah- AWYD).
The financial accounts are mainly based on the principles of deferred payment sales (bai’ bithaman ‘ajil- BBA) and hire-purchase contracts (al-ijarah thumma al-bai’ -AITAB).
These contracts are extended for the purchase of cars, land, building and house renovations, computers, for personal loans, for education and other purposes. In addition, TAIB offers corporate financing, such as trade financing, and asset-based financing, among others. TAIB also distributes its own term deposit certificates, which were introduced to create awareness of financial planning and to promote saving habits among the public (Tabung Amanah Islam Brunei, 2008).
Since its establishment, TAIB has acquired two subsidiary companies, for both of which it owns 100% of shares.
These companies include Insurance Islam TAIB Sdn. Bhd. (Islamic insurance), which provides insurance coverage in conformity with Shari’ah principles, and Darussalam Holdings Sdn. Bhd. , which manages buildings and hotels in Mecca and Medina, acts as a travel-ticketing agent, and also manages the Brunei pilgrimage in the Holy Cities. This latter function includes ensuring pilgrims’ welfare and safety during Mecca’s Hajj and Umrah (Tabung Amanah Islam Brunei, 2008).
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On 13 January 1993, two years after establishing TAIB’s trust fund, the Islamic Bank of Brunei Bhd. (IBB) was established.
The bank was to assist the locals in using Islamic banking facilities and in depositing their funds in a fully owned government bank. The IBB provides a complete range of commercial banking facilities, from the basic savings account to more sophisticated trade financing facilities. Besides being a commercial bank, the IBB has invested in other related financial activities through its subsidiaries, each of which specializes in a separate distinct activity (Bashir & Mail, 2011; Latiff, 2007).
On 15 July 2000, officially decreed that the Development Bank of Brunei be converted to the Islamic Development Bank of Brunei Bhd.
(IDBB) (Islamic Bank of Brunei Bhd, 2000).
In March 1995, the IDBB was initially established as a conventional bank known as the Development Bank of Brunei (DBB).
On 4 April 2000, the Government of Brunei instructed the bank to operate on Islamic banking principles. This conversion required changes in its transactions processing and accounting systems. Training in Islamic banking concepts was also arranged for all management and staff. On 1 July 2000, successful conversion of the IDBB as Brunei’s second Islamic bank was completed (Latiff, 2007).
In February 2001, a year after the conversion, the IDBB opened Takaful IDBB Sdn Bhd. , its first subsidiary company. This company is wholly owned by the bank and acts as an insurance company that provides a wide range of Islamic insurance products that cover property, business and life, and conform to Shari’ah principles, About three years after the conversion, the IDBB introduced many new Islamic products such as Eze-Net Islamic Internet Banking and Brunei’s first Islamic credit card (Bashir & Mail, 2011; Latiff, 2007).
On 7 July 2005, the Ministry of Finance announced that the state ruler had consented to the proposed merger between the Islamic Bank of Brunei Bhd (IBB) and the Islamic ©Society for Business Research Promotion | 39 www. ajbms. org ISSN: 2047-2528 Asian Journal of Business and Management Sciences Vol. 2 No. 10 [38-50] Development Bank of Brunei Bhd. (IDBB).
On 10 September 2005, the Bank Islam Brunei Darussalam Bhd. (BIBD) was incorporated. On 1 May 2006, a vesting order was obtained from the High Court of Brunei Darussalam, and on 3 July 2006, the BIBD became a fully operational Islamic Bank (Bank Islam Brunei Darussalam, 2007).
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The BIBD’s core values are to ensure that its personnel maintain high ethical standards in carrying out their responsibilities and that it adopts the standards of Shari’ah or Islamic law, in accordance with best industry practices, in offering its products and services to its customers. As a market-driven Islamic financial institution that constantly strives to address the needs of its customers in a highly competitive environment, the BIBD also aims to maximize shareholder returns through customer retention and customer acquisition. The BIBD is a meritocratic organization that demands professionalism and teamwork.
In line with its mission, the BIBD harnesses its knowledge and resources for the benefit of its customers. It has two subsidiaries: Takaful BIBD Sdn. Bhd. , which primarily provides insurance coverage, and BIBD At-Tamwil Bhd. , a finance company that provides hire or purchase financing for vehicles and consumer products (Bank Islam Brunei Darussalam, 2007; Bashir & Mail, 2011).
2. LITERATURE REVIEW Customer satisfaction is a well-known, established concept in such areas as marketing, consumer research, economic psychology, and welfare and general economics.
The most common interpretations obtained from various authors note that satisfaction is a feeling that results from a process of evaluating what has been received against what was expected, including the purchase decision itself and the needs and wants associated with the purchase (Armstrong & Kotler, 1996; Oliver, 1997).
Bitner & Zeithaml (2003) stated that satisfaction is the customers’ evaluation of a product or service in terms of whether that product or service has met their needs and expectations. Kessler (1999) noted that increasing satisfaction requires an
understanding of what satisfaction is and how it is to be handled. This signifies that in order to increase satisfaction, we should understand its antecedent variables. Several studies have emphasized the significance of customer awareness in Islamic banking (Goksu & Becic, 2012; Hamid, Yaakub, Mujani, Sharizam & Jusoff, 2011; Doraisamy, Shanmugam & Raman, 2011; Khattak & Rehman, 2010; Rashid & Hassan, 2009; Khan, Hassan & Shahid, 2007; Rammal & Zurbruegg, 2007; Saduman, 2005; Naser, Jamal & AlKhatib, 1999; Metwa & Almossawi, 1998).
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Nevertheless, there has been little effort to investigate Islamic banks in Brunei with special reference to the factors that might lead to customer satisfaction. The key factors that influence customers’ bank selection include the range of services, the rates, and the fees and prices charged (Abratt & Russell, 1999).
It is apparent that, to satisfy customers, superior service, alone, is not sufficient. Prices are essential, if not more important than service; relationship quality is also important. Furthermore, service excellence, meeting client needs, and providing innovative products are essential to success in the banking industry.
Most private banks claim that creating and maintaining customer relationships is important to them and that they are aware of the positive value relationships provide (Colgate, Stewart & Kinsella, 1996).
Customers in Islamic banks seriously consider whether the bank complies with Shari’ah principles in all its banking activities (Ahmad & Haron, 2002; Metawa & Almossawi, 1998).
Some researchers have placed emphasis on customer satisfaction in the Islamic banks and stated that Islamic banking is no longer a business entity serving the religious obligations of the Muslim community.
Rather, customers of Islamic banks include a wide array of people across various cultures and religions (Wilson, 1995).
It is suggested that, in order to gain a competitive position in the market, banks should concentrate on service quality and customer satisfaction (Caruana, 2002).
Similarly, it is ©Society for Business Research Promotion | 40 www. ajbms. org ISSN: 2047-2528 Asian Journal of Business and Management Sciences Vol. 2 No. 10 [38-50] suggested that an organization in the banking sector’s service performance appraisal system should be improved in line with customer satisfaction (Kayis, Kim & Shin, 2003).
Also noteworthy is the finding that there is a direct positive relationship between perceived quality and level of satisfaction (Iglesias & Guille’n, 2004).
Customer perception on both service quality and product quality is important because it is linked to awareness. All organizations must clearly understand differing customer perception of service quality and product quality because this perception influences consumer awareness. Othman & Owen (2001) confirmed that there is a strong link between service quality and customer satisfaction.
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As a result, Islamic banks must pay close attention to this factor and begin to think strategically in order to satisfy their customers by providing high quality products and services. In their study of Malaysian banking consumers. Hamid and Nordin (2001) found a high level of awareness of Islamic banking but a poor knowledge of specific Islamic banking products, including a poor understanding of the difference between Islamic and conventional banks. They also believed that better consumer education assists in making people more aware of Islamic banking products.
Othman & Owen (2001) examined the performance of the Islamic banking industry in Kuwait. They found a strong link between service quality and customer satisfaction. Naser et al. (1999) found that customer satisfaction is often related to factors such as service quality and service features. Attention has been given to the importance of awareness and usage in shaping customer behaviour. Metawa and Almossawi (1998) measured customer awareness and usage of various Islamic bank products and services in Bahrain. Dusuki and
Abdullah (2007) found that the selection of Islamic banks in Malaysia is based on a combination of Islamic and financial reputation and the quality of services offered by each bank. Studies by Erol and El-Bdour (1989) discovered that the most important criteria considered by consumers in bank selection are fast and efficient services, a bank’s reputation and image, and confidentially. Naser et al. (1999) support these findings. They conducted research on Jordanian consumers’ satisfaction in regards to a bank’s name, image, confidentiality policy and reputation.
Fast and efficient service is always regarded as high quality among bank consumers who value time and who expect a transaction to be completed quickly. The context of quality services is reflected in the friendliness of personnel, the dress code, communication techniques and relationships with consumer (Haron, Ahmed & Planisek, 1994).
Consumers’ preferences often depend on the quality of services offered. In the context of services, consumers’ satisfaction as an antecedent of service quality (Bitner, 2001; Cronin & Taylor, 1992).
The success of any product and service highly depends on customer acceptance and satisfaction.
High quality service helps generate customer satisfaction, customer loyalty and growth of market share by soliciting new customers. It also improves productivity and financial performance (Bashir, Machali & Mwinyi, 2012; Hassan, Chachi & Latiff, 2008; Hassain & Leo, 2009).
3. RESEARCH METHODS 3. 1 Data Collection The data for the present paper were gathered in Bandar Seri Begawan, the capital of Brunei Darussalam. The customers of two Islamic banks, namely Bank Islam Brunei Darussalam (BIBD) and Tabung Amanah Islam Brunei (TAIB) were the target population.
Respondents were chosen by convenience sample, wherein these two Islamic banks’ customers were selected based on ease of access and availability, meaning that those two Islamic banks’ customers who visited the sampling locations during the chosen time intervals of the survey. A total of 136 questionnaires were distributed, of which 116 responses were received, yielding a response rate of 85%. The questionnaire gathered information on consumers’ awareness and satisfaction of Islamic banks in Brunei Darussalam. Likertformat items were presented with 5-point scales, where 1= ‘strongly disagree’, 2= ‘disagree’,
©Society for Business Research Promotion | 41 www. ajbms. org ISSN: 2047-2528 Asian Journal of Business and Management Sciences Vol. 2 No. 10 [38-50] 3= ‘neither disagree nor agree’, 4= ‘agree’, and 5= ‘strongly agree’. Customer satisfaction, awareness and quality of service were measured using a five-item criterion for each question. The overall mean of perceived satisfaction, awareness, service quality and product quality were 3. 952, 3. 376, 3. 386, and 3. 384 respectively. Individually, each of the five items had mean scores that were above the neutral pivot on the rating scale.
The data set was analysed using the Statistical Package for Social Science (SPSS) Version 19. 0. 3. 2 Research Hypotheses The hypotheses are as follow: H1. Awareness significantly affects satisfaction of Islamic banking. H2. Service quality significant affects awareness of Islamic banking. H3. Product quality significantly affects awareness of Islamic banking. 3. 3 Research Framework A research framework was constructed and formulated. The present paper identifies three variables that influence satisfaction, namely awareness, service quality and product quality.
Based on the literature review, consumer awareness is the direct predictor variable, while service quality and product quality are the indirect predictor variables. The relationship between these variables is illustrated in Figure 1. Service Quality Awareness Consumer Satisfaction Quality of Product Figure 1: Research framework 4. FINDINGS AND DISCUSSION 4. 1 Reliability Analysis Cronbach’s Alpha statistic was computed to estimate the reliability of the data. The reliability assessment of the entire scale was observed to be good, with Cronbach’s alpha between 0. 738 and 0.
813. None of the reliability coefficients was below the 0. 60 cut-off point, which is considered to be the criterion for demonstrating internal consistency (Ulfat, 2013; Nunnally, 1978).
4. 2 Analysis of the Respondents’ Demographic Profiles The questionnaire’s first section was designed to gather information about the respondent’s personal background. The respondent’s demographic characteristics were presented in six variables, including gender, age, marital status, nationality, monthly income and occupation. As shown in Table 1, the majority of respondents were female (64%).
At the time of survey, most respondents were between 20 and 29 years of age (72%).
Most were single (78%) and about 21% were married. About 69% of respondents were students and 24% were government employees. Almost 97% were Bruneian and 3% were non-Bruneian. In regards to income level, the majority of the respondents earned incomes below BND1000 and 11% of them earned between BND2000-2999, followed by those who earned between BND1000-1999 and BND5000-5999, while the lowest income levels earned between BND3000-3999 and BND4000-4999. ©Society for Business Research Promotion | 42
www. ajbms. org ISSN: 2047-2528 Asian Journal of Business and Management Sciences Vol. 2 No. 10 [38-50] Table 1: Respondents profile Characteristics Frequen cy Gender Male 42 Female 74 Age below 8 19 20-29 83 30-39 11 40-49 7 Per cent 36. 2 63. 8 6. 9 71. 6 9. 5 6. 0 Characteristics Nationality Bruneian Non-Bruneian Marital Status Single Married Divorced Monthly Income (BND)* below 1000 1000-1999 50-59 5 4. 3 60 2 1. 7 above Occupation 2000-2999 Government 28 24. 2 3000-3999 sector Private sector 3 2. 6 4000-4999 Academic staff 2 1. 7 5000-5999 Students 80 69. 0 Others 3 2. 6
*Note: 1US$ =1. 22 BND as of December 30, 2012. Frequen cy Per cent 113 3 97. 4 2. 6 91 78. 4 24 1 20. 7 0. 9 84 12 72. 4 10. 3 13 2 11. 2 1. 7 2 3 1. 7 2. 6 4. 3 Customer Selection and Relationship with Bank As detailed in Figure 2, the results showed that 72% of respondents were only familiar with Islamic bank accounts. About 28% reported that they held accounts in both Islamic and conventional banks. As a result, holding accounts in both an Islamic as well as a conventional bank enabled customers to make useful comparisons while evaluating both service quality and product quality.
28% 72% Islamic bank only Islamic and conventional bank Figure 2: Bank selection by type Table 2 shows that almost 60% of respondents held wadiah accounts, almost 26% held current accounts, almost 13% held both wadiah and current accounts, and less than 2% held investment accounts. Table 2: Type of bank account Type of account Wadiah account Current account Investment account Wadiah and current accounts Frequenc y 69 30 2 15 ©Society for Business Research Promotion Per cent 59. 5 25. 9 1. 7 12. 9 | 43 www. ajbms. org ISSN: 2047-2528 Asian Journal of Business and Management Sciences
Vol. 2 No. 10 [38-50] From Figure 3, the customers’ track record of banking relationships can be reasonably interpreted in the following ways: First, Islamic banks have shown good progress in attracting customers from traditional banks. Second, about half of the respondents’ banking relationships extended beyond 5 years. Such a long relationship tenure signifies the banks’ customer retention ability, as well as the customers’ loyalty to Islamic banking products and services. 45 40 35 30 25 20 15 10 5 0 Less than a year 1-5 years 6-10 years above 10
Figure 3: Length of customer relationship with bank Table 3 shows the reasons respondents chose Islamic banking products and services; they included: fast, friendly services, 6%; shariah-compliance, 47%; higher profit on investment, 33%; availability of financing facilities, 9%; credit card provision, 3%; and bank reputation, 3% respectively. Table 3: Reason of choosing Islamic bank Reason Frequenc y Services (Faster/ Friendly) 7 Per cent 6. 03 Shariah-compliance 55 47. 41 Higher profit on investment 38 32. 76 Availability of finance facilities 10 8. 62 Credit card provision
3 2. 59 Bank reputation 3 2. 59 As seen on Table 4, almost 45% of respondents were influenced by family to open an account with an Islamic bank and 14% were influenced by Islamic bank advertisements. The influence of friends, work colleagues and relatives was 6%, 4% and 3% respectively. This result shows that Islamic banks should do more promotion. Table 4: Who influences customers to open an account Influence Frequency Per cent Family 52 44. 8 Relatives 4 3. 4 Friends 7 6. 0 Work colleagues 5 4. 3 Bank advertising 16 13. 8 None 32 27. 6 4. 4 Analysis of customers’ awareness
Table 5 shows that 56% of respondents agreed that they were aware of the mode of finance offered by Islamic banks. Nearly 44% of respondents strongly agreed that Islamic banks should do more promotional activities, whereas 52% of respondents stated that ©Society for Business Research Promotion | 44 www. ajbms. org ISSN: 2047-2528 Asian Journal of Business and Management Sciences Vol. 2 No. 10 [38-50] conventional banks should convert to Islamic banks. In addition, approximately 53% of respondents agreed on the differences between the conventional and Islamic banking systems.
Around 43% of respondents considered the profit that accrues to a bank’s transaction before dealing with the bank. Table 5: Awareness of the Islamic banking system Strongly Statement Disagree Disagree You are aware of the instruments 3 3 used in the financing products Islamic (2. 6) (2. 6) banks offer, e. g. Mudharabah Neutral Agree 27 (23. 3) 65 (56. 0) Strongly Agree 18 (15. 5) In order to be known, Islamic banks should do more promotion 0 (0. 0) 1 (0. 9) 15 (12. 9) 49 (42. 2) 51 (44. 0) Should conventional banks convert to Islamic banks? 0 (0. 0) 3 (2. 6) 26 (22. 4) 60 (51. 7) 27 (23. 3)
You are aware about the differences between conventional banking system and Islamic banking system You consider the profit of the banking transaction before dealing with the bank Note: figures in brackets denote per cent. 2 (1. 7) 5 (4. 3) 30 (25. 9) 62 (53. 4) 17 (14. 7) 1 (0. 9) 3 (2. 6) 28 (24. 1) 50 (43. 1) 34 (29. 3) 4. 5 Analysis of Product Quality Table 6 shows that 54% of respondents did not know that Islamic banks offered more benefits than conventional banks. Approximately 45% of respondents did not have an opinion on the information provided on Islamic banks and whether it can be easily understood.
Approximately 44% of respondents stated that they knew of the features and benefits Islamic banks offered. Nearly 38% of respondents agreed that, compared with conventional banks, Islamic banks offered interesting products that attract customers. Approximately 40% of respondents were neutral on any doubts about Islamic banking products, while 41% had doubts on these products. This was a clear indication that customers in Brunei had limited knowledge on Islamic banking products and services. It also showed that the Islamic banks had not made an adequate effort in marketing their products and services.
Table 6: Islamic banks’ product quality Strongl y Statement Disagre e Islamic banks offer more benefits 2 than conventional banks (1. 7) Information on certain Islamic 3 banking products on leaflets/ (2. 6) brochures/ websites is sufficient and can be easily understood. Islamic banks offer interesting 2 products that attract customers (1. 7) more so than conventional banks The features and benefits of the 3 Islamic banking products offered (2. 6) by Islamic banks are known to you You have doubts about Islamic 1 banking products (0. 8) Note: figures in brackets denote per cent.
©Society for Business Research Promotion Disagre e Neutra l Agree Strongl y Agree 8 (6. 9) 7 (6. 0) 62 (53. 5) 52 (44. 8) 36 (31. 0) 47 (40. 5) 8 (6. 9) 7 (6. 0) 13 (11. 2) 54 (46. 6) 44 (37. 9) 3 (2. 6) 7 (6. 0) 51 (44. 0) 52 (44. 8) 3 (2. 6) 14 (12. 1) 46 (39. 7) 41 (35. 3) 14 (12. 1) | 45 www. ajbms. org ISSN: 2047-2528 Asian Journal of Business and Management Sciences Vol. 2 No. 10 [38-50] 4. 6 Analysis of Service Quality As shown in Table 7, among survey respondents, approximately 46% were neutral on Islamic bank’s hours of operation. Approximately 27% agreed that working hours should be increased, and only 10.
3% and 13. 8% respectively strongly disagreed and disagreed on banking hours. Approximately 31% of respondents believed that Islamic banks were efficient and time effective, while 14% and 5% respectively disagreed and strongly disagreed on this point. The majority of respondents (40. 5%) agreed that Islamic banks should open more branches and ATMs locally and internationally (this point was widely accepted among respondents).
In addition, 46% of respondents agreed that Islamic banks provide varieties of services and 10% disagreed and 2% strongly disagreed.
About 45% believed that customers were required to follow many procedures/regulations in Islamic banks; 14% strongly agreed on this point, compared with 3% and 0. 9% respectively disagreed and strongly disagreed. Table 7: Service quality of the Islamic bank Strongl y Statement Disagre e Islamic banks should lengthen 4 their hours of operation (3. 5) Disagre e Neutra l Agre e Strongl y Agree 12 (10. 3) 53 (45. 7) 31 (26. 7 ) 36 (31. 0 ) 47 (40. 5 ) 53 (45. 7 ) 52 (44. 8 ) 16 (13. 8) Services offered by Islamic banks are efficient and time effective. 6 (5. 2) 16 (13. 8) 53 (45. 7) Islamic banks should open up more branches and ATMs locally
and internationally Islamic banks provide varieties of services (Front-desk, e-banking, SMS banking ) Many procedures/regulations need to be followed in Islamic banks 4 (3. 5) 21 (18. 1) 37 (31. 9) 2 (1. 7) 12 (10. 3) 42 (36. 2) 1 (0. 9) 3 (2. 6) 44 (37. 9) 5 (4. 3) 7 (6. 0) 7 (6. 0) 16 (13. 8) Note: figures in brackets denote per cent. 4. 7 Analysis of customer satisfaction Table 8 indicates that 45% of respondents were neutral on the profit rate offered by Islamic banks. Around 36% of the respondents agreed that they were satisfied with the profit rate offered by the Islamic banks, compared with 12% of respondents that disagreed.
The majority of respondents (48%) were neutral on the promptness of Islamic banks’ customer service delivery, and around 26% agreed that Islamic banks gave prompt service once the customer asked for it, compared with 17% that disagreed. In regard to the assurance of products’ Shariah-compliance, 51% of respondents were agreed, and 12% strongly agreed compared to only 3. 4% who disagreed. Finally, on whether Islamic banks charged more than conventional banks, 44% of respondents were neutral, and around 44. 8% agreed that Islamic banks charged more than conventional banks.
Table 8: Satisfaction of the Islamic banks Strongly Statement Disagree You are satisfied with the profit 3 rate offered by Islamic banks (2. 6) You always get prompt service 8 whenever you go to Islamic (6. 9) banks Islamic banks charge more than 0 conventional banks (0. 0) ©Society for Business Research Promotion Disagree Neutral Agree 14 (12. 1) 20 (17. 2) 52 (44. 8) 56 (48. 3) 42 (36. 2) 30 (25. 9) Strongly Agree 5 (4. 3) 2 (1. 7) 6 (5. 2) 51 (44. 0) 52 (44. 8) 7 (6. 0) | 46 www. ajbms. org ISSN: 2047-2528 Asian Journal of Business and Management Sciences Vol. 2 No. 10 [38-50] Islamic banks provide
0 assurance on their products’ (0. 0) shariah-compliance Terms and conditions set by the 1 Islamic banks are acceptable (0. 9) Note: figures in brackets denote per cent. 4 (3. 4) 39 (33. 6) 59 (50. 9) 14 (12. 1) 14 (12. 1) 46 (39. 7) 44 (37. 9) 11 (9. 4) 4. 8 Hypothesis Testing 4. 8. 1 Test of Hypothesis 1 As shown in Table 9, it can be concluded that a p-value 0. 000 (significant) means the independent variable (awareness) can significantly affect customer satisfaction with Islamic banking. Since the p-value calculated is smaller than alpha 0. 01, H1 is accepted at a 5% level of significance.
The samples provided sufficient evidence that there is a significant relationship between awareness and satisfaction of Islamic banking. Table 9: Regression Analysis Variables B Std. Error (Constant) 7. 982 1. 832 Awareness 0. 452 0. 092 2 =0. 175 R F=24. 183 ?=5% (Sig. 0. 000) T value 4. 357 4. 918 P-value 0. 000 0. 000 4. 8. 2 Test of Hypothesis 2 The model’s second hypothesis requires a test of the expected positive and significant effects of service quality on awareness. Table 10 presents the test results. As shown in Table 10, the impact of service quality on awareness is positive and significant (p-value = 0.
035 < 0. 05).
Thus, the regression model’s results provide strong support for Hypothesis 2. Table 10: Regression Analysis Variables Std. B Error (Constant) 10. 413 1. 630 Product 0. 382 0. 101 Service 0. 172 0. 081 2 =0. 229 R F=16. 760 ?=5% (Sig. 0. 000) T value 6. 389 3. 795 2. 130 P-value 0. 000 0. 000 0. 035 4. 8. 3 Test of Hypothesis 3 In Hypothesis 3, it is expected that product has an effect on awareness. Table 10 presents the results of the test of Hypothesis 3. Table 10 also reveals that the effect of product on awareness is significant (p-value = 0. 000 < 0. 05), therefore H3 could not be rejected.
Furthermore, based on the results, it can be inferred that the effect of service quality and product on satisfaction is not direct but rather an indirect effect through awareness. 5. CONCLUSIONS AND RECOMMENDATIONS The purpose of the present study is to empirically examine the impact of service quality, product quality, and awareness on customer satisfaction of Islamic banking in Brunei Darussalam. A questionnaire survey was conducted among Islamic banks’ customers. Its intention was to measure the awareness and level of customer satisfaction with Islamic banks’ various basic elements of service delivery systems. The study’s findings indicate
