Service knowledge till have suggested that customer choose

Service
Quality in Banking

Wang, Lo, &
Hui, (2003) found that rendering quality service was essential for growth and
survival of banks in the existing competitive financial environment. Berry and
thump (1982) findings suggest that there is strong relationship between service
quality of banks and customer loyalty. Yavas, Bilgin, & Shemwell, (1997)
study finds out the association between customer satisfaction and service
quality in the Turkish banking industry. Conclusion presented in their study
proposes that service quality is positively related with the bank personal.
Arasli Katircioglu, & Mehtap-Smadi, (2005) conducted another research on
service quality and banking system of developing economies. They established
that bank customers’ expectations were not met and word of mouth has
affirmative association with overall and customer satisfaction. El-Bdour (1989)
explored behaviour, attitude and Patronage aspects of Jordan’s Islamic bank
customers. Substantiation of the study suggested that the religious factor
plays an insignificant role in selecting Islamic banks.

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Compliance
dimension of service quality in Islamic Banks

Compliance
with Shariah or Islamic Laws is the basic requisition of a bank to be labelled
as Islamic. Many researchers has found that Shariah Dimension is the basic
factor in choosing Islamic bank and all other factors of SERQUAL are secondary
for customers who choose Islamic finance over Conventional finance. This
dimension also guarantees customers that their money is not involved in any
kind of prohibited activity like riba and ghara. Islamic banks are not supposed
to invest their customers money in any kind of unlawful business like Alcohol,
gambling, pork etc. (Siddiqi, 1983, 1985, 2001; Ahmad, 1984, 2000; Khan and
Mirakhor, 1986) No study in my knowledge till have suggested that customer
choose Islamic banks because of service quality rather than shariah compliment.
Shariah compliance is essential and other SERQUAL factors can bring competitive
advantage among Islamic banks.

 

Few studies which have
been done on service quality and Islamic bank found factors like speed,
tangibility, reliability, assurance and shariah compliance as key factors for
customer satisfaction. (Al-Tamimi and Al-Amiri , 2003; Amirzadeh and
Shoorvarzy, 2013; Rehman, 2012; Ahmad and Haron, 2002)

Research
hypotheses

The research
hypotheses of this study are as follows:

 

H1 There is
significant difference of mean between expected and perceived service quality
dimensions rendered by Islamic Banks

H2: Shariah Compliance
factor of service quality will have a positive influence on customer
satisfaction.

H3: Reliability factor
of service quality will have a positive influence on customer satisfaction.

H4: Assurance factor
of service quality will have a positive influence on customer satisfaction.

H5: Tangibility factor
of service quality will have a positive influence on customer satisfaction.

H6: Empathy factor
of service quality will have a positive influence on customer satisfaction.

H7:
Responsiveness factor of service quality will have a positive influence on
customer satisfaction.

 

Methodology

Figure 1 shows
the conceptual model of this study. The modified SERVQUAL measurement model comprises
of six dimensions such as compliance, reliability, assurance, tangibility, assurance,
empathy and responsiveness. Expectation of customers for each dimension is
compared with actual quality received and gap is calculated for each dimension.
In addition, impact of each perceived service quality dimension on customer
satisfaction is measured.