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http://dx.doi.org/10.13106/jbees.2020.vol10.no3.35

Perceptions of Islamic banking products: Evidence from Malaysia  

RAHMI, Mustika (Faculty of Economics and Management Sciences, International Islamic University Malaysia)
AZMA, Nurul (Institute for Advanced Studies (IAS).University of Malaya)
OBAD, Fahd Mohammed (Faculty of Economics and Management Sciences, International Islamic University Malaysia)
ZAIM, Muhammad (Faculty of Economics and Management Sciences, International Islamic University Malaysia)
RAHMAN, Mahfuzur (Faculty of Business and Accountancy, University of Malaya)
Publication Information
Asian Journal of Business Environment / v.10, no.3, 2020 , pp. 35-42 More about this Journal
Abstract
Purpose: Islamic banking products and services have always claimed to be unique from its traditional interest-based counterpart. However, in practice, many Islamic banks are alleged to have drifted away from its paradigm version. The purpose of this study is to gauge the perception of university students in Malaysia towards Islamic banking products. Research design, data and methodology: Data were collected from 250 Malaysian university students. Structural Equation Modeling (SEM) was performed to test proposed hypotheses to identify factors influencing customers' perception toward Islamic banking products. Results: The main finding indicates that most of the respondents are familiar with Islamic banking products and consider Islamic banking products as useful as its conventional counterparts. The regression results show that respondents are less convinced of adherence to Shari'ah, efficiency and helpfulness of existing Islamic banks. Conclusions: This is a cue to the Islamic banks' stakeholders that they need to realign their practices in an ethically responsible way in accordance with Shari'ah if they wish to secure existing customers and attract potential ones. In a competitive banking environment, most banks provide efficient and readily available service; thus, focusing on this as a strategy hardly distinguishes an Islamic bank from an interest-based bank.
Keywords
Islamic Banking Products; University Students' Perception; Shari'ah Compliance; Issues of Islamic Banking;
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