Perceptions of Islamic Banking among Post Millennials: A Study on Muslim Students DOI: https://doi.org/10.33093/ijomfa.2023.4.2.2
Article Sidebar
Main Article Content
Abstract
This study aimed to understand the perception of Islamic banking among post millennials Muslim students and explore their expectations towards Islamic Shariah compliant banking. The study uses qualitative method to understand respondents’ subjective views. Semi-structured interviews are used among the Muslim students studying at public and private universities in Malaysia. Twelve students were selected using purposive sampling.
The analysis revealed that religious motives, efficient services, and convenience in terms of online banking and ATM services are factors in bank selection. The study found that the students’ perceptions of their understanding of Islamic banking are not sufficient, and there is a gap in the understanding of the mechanism of Islamic banking operations. Most of the existing literature is on the customer satisfaction, customer behaviour and service quality. However, there are little research on the perceptions of Islamic banking among the students who are post millennials. This study focus on the new generation’s perception of Islamic banking and attempts to fill this gap. The findings of the present study can be used as a reference in future studies in the area of perceptions among students or post millennials.
Article Details
References
Abduh, M., Ramjaun, S. B., & Mustaqim, M. (2018), “Bank selection criteria and SERVQUAL survey among Muslims in Mauritius” Qudus International Journal of Islamic Studies, Volume 6 No 2, pp. 221-250.
Ajzen, I. (1991), “The theory of planned behaviour”, Organizational Behavior and Human Decision Processes, Vol. 50 No. 2, pp. 179-211.
Alam, N., & Al- Amri, H. A. (2020), “Service quality perception and customer satisfaction in Islamic banks of Oman”, The Journal of Asian Finance, Economics, and Business, Vol. 7 No. 9, pp. 499-504.
Ali, S.A., Hassan, A., Juhdi, N. and Razali, S.S. (2018), "Employees’ attitude towards Islamic banking: measurement development and validation", International Journal of Ethics and Systems, Vol. 34 No. 1, pp. 78-100. https://doi.org/10.1108/IJOES-05-2017-0070.
Augustine, O., & Kingsley, N. K. (2020). Assessment of the Banking Behaviour of Generation Y University Students and the Future of Retail Banking in North Central Nigeria. Electronic Research Journal of Social Sciences and Humanities, 2.
Bank Negara Malaysia [BNM] (2022), “Malaysian Financial Sector, Islamic Banking & Takaful”, available at: www.bnm.gov.my/islamic-banking-takaful, accessed on 15 August, 2022.
Bashir, S., Sultana, A., Dweikat, Z., & Anwar, M. (2021), “Understanding of The Customers’ Perception on Islamic Banking and Financial Services in Malaysia”, International Fellowship Journal of Interdisciplinary Research, Vol. 1 No. 1, pp. 74–90.
Beloucif, A., Boukhobza, T., & Baumruck-Lawrenz, L. (2017), “A study of German consumers' perception of Islamic banking”, International Journal of Islamic Marketing and Branding, Vol. 2 No. 1, pp. 37-64.
Belwal, R., & Al Maqbali, A. (2019), “A study of customers’ perception of Islamic banking in Oman”, Journal of Islamic Marketing, Vol 10 No. 1, pp. 150-167.
Bley, J., & Kuehn, K. (2003), “Conventional versus Islamic finance: student knowledge and perception”, Volume 5 No. 4.
Butt, M.M., de-Run, E.C., U-Din, A. and Mutum, D. (2018), “Religious symbolism in Islamic financial service advertisements”, Journal of Islamic Marketing, Vol. 9 No. 2, pp. 384-401.
Chowdhury, M. A. M., Al Masud, M. A., Atiullah, M., & Tanvir, J. I. (2020), “Contemporary responses to the criticism of Islamic Banks in Malaysia”, European Journal of Islamic Finance, Vol. 25, No. 15.
Chowdhury, M.A.F. and Rahman, S.M.K. (2014), “The effect of conventional bank’s interest rate and islamic bank’s profit rate on investment and return”, Asia Pacific Journal of Business, Vol. 5 No. 1, pp. 33-41.
Dar Al Sharia (2021), “The Growing Appeal of Islamic Finance”, https://www.bnymellon.com/us/en/insights/all-insights/the-growing-global-appeal-of-islamic-finance.html. accessed on April 24, 2022.
Dewi, V., Febrian, E., Effendi, N., & Anwar, M. (2020), “Financial literacy among the millennial generation: Relationships between knowledge, skills, attitude, and behavior”, Australasian Accounting, Business and Finance Journal, Vol. 14 No. 4, pp.24-37.
Dusuki, A. W., & Abdullah, N. I. (2007), “Why do Malaysian customers patronise Islamic banks?”, International Journal of Bank Marketing, 25(3), 142–160. doi:10.1108/02652320710739850
Echchabi, A., & Olaniyi, O. N. (2012), “Malaysian consumers preferences for Islamic banking attributes”, International Journal of Social Economics, Vol. 39 No. 11, pp. 859–874.
Erol, C., Kaynak, E. and Radi, E. (1990), "Conventional and Islamic Banks: Patronage Behaviour of Jordanian Customers", International Journal of Bank Marketing, Vol. 8 No. 4, pp. 25-35.
Ezeh, P.C. and Nkamnebe, A.D. (2022), "Determinants of Islamic banking adoption among non-Muslim customers in a Muslim zone", Journal of Islamic Accounting and Business Research, Vol. 13 No. 4, pp. 666-683. https://doi.org/10.1108/JIABR-10-2021-0280
Fitch Rating (2021), “Malaysia's Islamic Banking Sector Continues to Expand Despite Pandemic”, https://www.fitchratings.com/research/banks/malaysia-islamic-banking-sector-continues-to-expand-despite-pandemic-28-02-2021 accessed on April 20, 2022.
Haron, S., Ahmad, N. and Planisek, S.L. (1994), "Bank Patronage Factors of Muslim and Non-Muslim Customers", International Journal of Bank Marketing, Vol. 12 No. 1, pp. 32-40.
Hoque, M. E., Hassan, M. K., Susanto, P., Jannat, T., & Mamun, A. A. (2022). Millennial Generation’s Islamic Banking Behavioral Intention: The Moderating Role of Profit-Loss Sharing, Perceived Financial Risk, Knowledge of Riba, and Marketing Relationship. Journal of Risk and Financial Management, Vol 15 No 12, pp-590.
Hoque, M. E., Kabir Hassan, M., Hashim, N. M. H. N., & Zaher, T. (2019), “Factors affecting Islamic banking behavioral intention: the moderating effects of customer marketing practices and financial considerations”, Journal of Financial Services Marketing, Vol. 24 No. 1, pp. 44-58.
Hosen, M.N., Lathifah, F. and Jie, F. (2021), "Perception and expectation of customers in Islamic bank perspective", Journal of Islamic Marketing, Vol. 12 No. 1, pp. 1-19.
IIBI (2018), “Institute of Islamic banking and insurance-What is Islamic banking”, available at: www. islamic-banking.com/what_is_ibanking.aspx accessed on May 25, 2021.
International Monetary Fund [IMF] (2017), “Islamic Finance and the role of IMF”, https://www.IMF.org/external/themes/islamicfinance/ Accessed on April 20, 2022.
Jobber, D. (2010), Principles and Practice of Marketing, 6th ed., McGraw-Hill Education, Maidenhead.
Khan , M. (1986), “Islamic Interest-Free Banking: a theoretical analysis” IMF Economic Review, Vol. 33 No. 1, pp. 1-27.
Khan , M.N., Rothwell, D.W., Cherney, K., & Sussman, T. (2017), “Understanding the financial knowledge gap: A new dimension of inequality in later life” Journal of Gerontological Social Work, Vol 60 No. 6, pp.487-503.
Klapper, L., Lusardi, A., & van Oudheusden, P. (2015), Financial Literacy Around the World, Washington, DC: World Bank.
Latif, S. D. H. (2019), “Awareness and perceptions of Muslim society towards Islamic banking in the Philippines” International Journal of Islamic Economics and Finance (IJIEF), Vol. 1No. 2, pp. 209-228.
Lujja, S., Mohammed, M.O. and Hassan, R. (2018), "Islamic banking: an exploratory study of public perception in Uganda", Journal of Islamic Accounting and Business Research, Vol. 9 No. 3, pp. 336-352.
Mahdzan, N.S., Zainudin, R. and Au, S.F. (2017), "The adoption of Islamic banking services in Malaysia", Journal of Islamic Marketing, Vol. 8 No. 3, pp. 496-512.
Malay Mail, (2021), “Malaysia ranks first in Islamic finance development indicator 2021”, says Refinitiv” available at: https://www.malaymail.com/news/ money/2021/11/18/ malaysia-ranks-first-in-islamic-finance-development-indicator-2021-says-ref/2021 accessed on Dec 10, 2022.
Mbawuni, J. and Nimako, S.G. (2018), "Muslim and non-Muslim consumers’ perception towards introduction of Islamic banking in Ghana", Journal of Islamic Accounting and Business Research, Vol. 9 No. 3, pp. 353-377.
Merriam, S. B. (2009), Qualitative Data Analysis. Qualitative Research a guide to design and implementation, United States of America: John Willey & Sons.
Musa, M. A., Abd Sukor, M. E., Ismail, M. N., & Elias, M. R. F. (2020), “Islamic business ethics and practices of Islamic banks: Perceptions of Islamic bank employees in Gulf cooperation countries and Malaysia”, Journal of Islamic Accounting and Business Research, Vol. 11 No. 5, pp. 1009-1031.
Naser, K., Jamal, A., & Al-Khatib, K. (1999), “Islamic banking: a study of customer satisfaction and preferences in Jordan” International journal of bank marketing, Vol. 17 No. 3, pp. 135-151.
Rahman, M. M., Chowdhury, M. A. F., Haque, M. M., & Rashid, M. (2020), “Middle-income customers and their perception of Islamic banking in Sylhet: one of Bangladesh’s most pious cities” International Journal of Islamic and Middle Eastern Finance and Management, Vol. 14 No. 2, pp. 230-246.
Rahmi, M., Azma, N., Obad, F. M., Zaim, M., & Rahman, M. (2020), “Perceptions of Islamic banking products: Evidence from Malaysia”, The Journal of Business Economics and Environmental Studies, Vol. 10 No. 3, pp. 35-42.
Riaz, U., Khan , M. and Khan , N. (2017), "An Islamic banking perspective on consumers’ perception in Pakistan", Qualitative Research in Financial Markets, Vol. 9 No. 4, pp. 337-358. https://doi.org/10.1108/QRFM-03-2017-0020
Shamsudheen, S.V., Mahomed, Z. and Mohamad, S. (2021), "Reconciling selection criteria of Islamic banking services: a survey on perception of Islamic bankers, institutional clients and retail customers in UAE", Journal of Islamic Accounting and Business Research, Vol. 12 No. 1, pp. 112-130.
Smith, T. R., & Yamakawa, N. (2020). Asia's generation Z comes of age. McKinsey & Company. Retrieved November 12, 2022, from https://www.mckinsey.com/industries/retail/our-insights/asias-generation-z-comes-of-age
Sonko, M. (2020), “Customers' Perceptions on Islamic Banking: A Case Study in the Gambia”, Journal of Islamic Finance, Vol. 9 No. 1, pp. 013-023.
Sudarsono, H., Saddam Ash Shidiqie, J., & Karina Tumewang, Y. (2021), “The Impact of religiosity and Knowledge on the intention of young Muslim generation toward halal tourism in Indonesia”, Tourism and Hospitality Management, Vol. 27 No. 2, pp. 255-272.
Tjiptono, F. (2014), Services Marketing (Principles, Application, Research), Yogyakarta: Andi Offset.
Tran, V. D. (2020), “Assessing the effects of service quality, experience value, relationship quality on behavioural intentions”, The Journal of Asian Finance, Economics and Business, Vol. 7 No.3, pp. 167-175.
Wahyuni, S., & Fitriani, N. (2017), “Brand religiosity aura and brand loyalty in Indonesia Islamic banking” Journal of Islamic Marketing, Vol. 8, No. 3, 361-372.
Wibowo, H. A., Hamdan, H., & Husain, M. K. (2022), “Extending the theory of planned behaviour with religiosity: Explaining entrepreneurial intention of employee’s students” Indonesian Journal of Business and Entrepreneurship (IJBE), Vol 8 No. 1, pp. 49-49.
Zakaria, N., Wan-Ismail, W.-N.A. and Abdul-Talib, A.-N. (2021), "Seriously, conspicuous consumption? The impact of culture, materialism and religiosity on Malaysian Generation Y consumers' purchasing of foreign brands", Asia Pacific Journal of Marketing and Logistics, Vol. 33 No. 2, pp. 526-560.