What Drives to Adopt Islamic Banking Products and Services: is it Shariah Compliance or Convenience?

Abstract

Purpose – The main issue is whether customers prefer convenience over Shariah compliance or the opposite when they decide their Islamic Banking needs. The purpose of this paper is to explore why customers adopt Islamic Banking products and services: Shariah compliance or convenience?

Design/methodology/approach – Using convenience sampling, 310 respondents’ data were collected through online survey. For testing the fit and hypotheses of the proposed model, AMOS 25 software and Smart-PLS 4.0 software have been used.

Findings – Attitude, Islamic value, and convenience have significant determinants of Islamic banking products and services. Shariah compliance has no direct or indirect influence on neither intention nor actual behavior to adopt Islamic banking services. Furthermore, gender has no such differential effect on the adoption.

Practical Implications – Managers and marketers of Islamic banks may benefit from the findings of this study, which demsotrate fresh insights regarding the factors which help in strategy formulations to promote Islamic banking services.

Originality/value – The growth of Islamic banks, branches, and windows is remarkable in both Muslim-majority and Muslim-minority countries in the world. This paper postulates the behavioural finance studies in Islamic banking and finance research stream by extending the theory of planned behaviour of Ajzen (1985) as all the three new constructs (Islamic value, convenience, Shariah compliance) are statically fit for further studies. However, only Islamic value and convenience are the two significant factors which drive customers to take decision in the proposed model.

Full text

What drives to adopt Islamic
banking products and services: is it
shariah compliance or convenience?
Kazi Md Jamshed
Department of Islamic Economics and Finance,
_
Istanbul Sabahattin Zaim
University, Istanbul, Turkey and Department of International Business,
University of Dhaka, Dhaka, Bangladesh, and
Buerhan Uluyol
Department of Islamic Economics and Finance,
Istanbul Sabahattin Zaim Universitesi, Istanbul, Turkey
Abstract
Purpose –The main issue is whether customers prefer convenience over Shariah compliance or the opposite
when they decide their Islamic banking needs. The purpose of this paper is to explore why customers adopt
Islamic banking products and services: Shariah compliance or convenience?
Design/methodology/approach –Using convenience sampling, 310 respondents’data were collected
through online survey. For testing the fit and hypotheses of the proposed model, AMOS 25 software and
Smart-PLS 4.0 software have been used.
Findings –Attitude, Islamic value and convenience have significant determinants of Islamic banking
products and services. Shariah compliance has no direct or indirect influence on neither intention nor actual
behaviour to adopt Islamic banking services. Furthermore, gender has no such differential effect on the adoption.
Practical implications –Managers and marketers of Islamic banks may benefit from the findings of this
study, which demonstrate fresh insights regarding the factors which help in strategy formulations to promote
Islamic banking services.
Originality/value –The growth of Islamic banks, branches and windows is remarkable in both Muslim-
majority and Muslim-minority countries in the world. This paper postulates the behavioural finance studies
in Islamic banking and finance research stream by extending the theory of planned behaviour of Ajzen (1985)
as all the three new constructs (Islamic value, convenienc and Shariah compliance) are statistically fit for
further studies. However, only Islamic value and convenience are the two significant factors which drive
customers to take decision in the proposed model. This study gives insights to the bankers and authority
about the consumer behaviour.
Keywords Islamic banking, Perception, Adoption, Shariah compliance, Convenience, Islamic finance
Paper type Research paper
1. Introduction
Modern financial system is based on interest, sale of risk, speculation and uncertainty (Chapra,
2000). The base of this system is interest or riba which is one of the major reasons for inflation
and unsustainable economic growth (Ahmed and Chapra, 2002). This system makes money out
of money and this concept is not allowed in the eye of Islam (Usmani, 2002). Islamic financial
The authors acknowledge that this study was funded by the Istanbul Sabahattin Zaim University
(IZU) through BAP Project, BAP Research Project ID: BAP-2023-07.
Islamic
banking
products
Received7 August 2023
Revised 27 December2023
8 March 2024
Accepted12 March 2024
Journal of Islamic Marketing
© Emerald Publishing Limited
1759-0833
DOI 10.1108/JIMA-08-2023-0243
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1759-0833.htm

system is capable of freeing modern man from the debt-ridden and vulnerable economy by
ensuring justice and equity (Ahmad, 1980). This system is based on some guiding principles
derived from major sources: the Al-Quran (the revelations), the Hadiths (the Prophetic
traditions) and the Fiqh manuals (the jurisprudence of the major schools of thoughts). It has
been considered as an alternative system that is growing rapidly in the world. Alongside with
other financial institutions such as takaful (Islamic insurance), sukuk (Islamic bonds), Islamic
stocks and Islamic funds, Islamic bank is the most dominant one in the Islamic financial
system. According to Ahmad (1980), there is a door open for modern banking with Islamic
principles. Interest-free banking concept emerged at the 1960s with a very limited scale. After
that, the number of Islamic banks and other financial institutions is growing around the world.
Contemporary Islamic banking and finance (IBF) practices have some critical arguments (El-
Gamal, 2006;Khan, 2010). The importance of these debates is not trivial, and we should work for
developing a comprehensive and holistic Islamic banking model. If we look at the history of
Islamic banking, we can find that the banking model was based on profit-loss sharing (PLS) and
fee-based operations (Uzair, 1978). Gradually, non-profit-loss sharing (non-PLS) operations
become more dominants, and also it is argued that Islamic banking has just change the name of
“interest”into “profit or mark-up rate”(Kuran, 2004). However, Muslims should give preference
to Islamic banks over conventional banks for their religious obligation (Usmani, 2002). But
many studies have found that Islamic banks are not compatible with conventional banks and
even the service quality of conventional banks is better than Islamic banks.
The growth of Islamic banking industry is faster than conventional banks and
comparatively less affected in the 2007–2008 financial crisis and the pandemic (Ramlan and
Adnan, 2016;Research and markets, 2023). Islamic banking is still a new concept
comparative to conventional banking practice. Many irregularities and misconceptions are
still in exist in the operations (Ali et al., 2022;Alam and Al-Amri, 2020). Several researchers
have done studies particularly on operational mechanisms and their constructive criticisms
too (Khan, 2010;El-Gamal, 2006;El-Hawary and Grais, 2004). It is evident that IBF need to
be studied from different dimensions (Kaakeh et al.,2018). It is also necessary to study both
operational framework (Shariah compliance and other corporate governance) and industry
growth factors. Hence, this paper is an attempt to study Islamic banking industry from a
behavioural science perspective. Last 50years, many researches have been done in the
behavioural side as well (Kaakeh et al.,2018). Few studies emphasized that the convenience
and tangible benefits are most significant factors for their usage and retention of the Islamic
banking services. On the contrary, customers doubt about the banks’Shariah compliance
(Belwal and Al Maqbali, 2019) and also mention that non-compliance is not only
embarrassing for themselves but also acted as barriers to non-users (Butt et al., 2018).
However, it is argued that customers are in twofold problems; one is compromising with
Shariah principles, and the other one is convenience factor.
Currently, Bangladesh has 10 complete Islamic banks, 23 Islamic banking branches and
511 Islamic banking windows consist of 27% the market share among the total 61 scheduled
banks in Bangladesh. These percentages are really remarkable, but there is a debate going on
whether these Islamic banks are purely Islamic or just using the brand of Islam. Also, the
above data reflect that Islamic banking institutions are better position than many Muslim-
majority countries. So, the query arises what factors drive the Bangladeshi customers to adopt
the Islamic banking services. The major research problem is going to solve in this study is that
whether customers prefer convenience over Shariah compliance or the opposite. In
Bangladesh, few studies can be found working on this area (Iqbal et al.,2018;Hoque et al.,
2022), but this research paper has particularly highlighted the behavioural action by extending
the theory of planned behaviour (TPB) proposed by Ajzen (1985). With the existing variables
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of the TPB model, three additional variables are, namely, “Islamic value”,“Convenience”and
“Shariah Compliance”tested for understanding what factors really matter most while using
Islamic banking services. Furthermore, there are very few studies emphasizing gender effect
on the actual usage of Islamic banking services (ElMassah, and Abou-El-Sood, 2022). Thus,
this paper aims to explore what factors are the most influential for the customers to choose
Islamic banking products and services. Put differently, the purpose of this paper is to explore
why customers adopt Islamic banking products and services: Shariah compliance or
convenience?
The key contributions of this paper are mainly twofold. One is to understand the factors
driving Bangladeshi Muslim customers to adopt Islamic banking products and services. In
the past two decades, some conventional banks have transformed their operations to Islamic
banking system. Besides, majority conventional banks have opened Islamic banking
windows (Bangladesh Bank, 2023). Why Bangladesh as a sample case? Because Bangladesh
is the third largest Muslim majority country in the world with more than 160 million
Muslims and also the share of Islamic banking is almost 30% in the banking industry of
Bangladesh (Bangladesh Bank, 2023). The other contribution is to explore extended
theoretical framework of TPB by adding and testing new variables. Our contributions are to
see what factors act as determinants other than existing TPB model. We have taken three
new constructs: Shariah compliance, convenience and Islamic values. We have explained the
justifications to add and test these three variables in the literature reviews and discussed the
findings accordingly.
The remaining of the paper is organized as follows: Section 2 reviews the existing literature
review and proposes a research framework after following this Introduction section. Section 3
describes the research items and research methodology of the paper. The main findings and
discussion are presented in Section 4, and finally, Section 5 concludes the paper.
2. Literature review
2.1 Islamic banking operations
Islamic bank is a form of non-conventional banking platform. It is a comparatively new
institution in Islamic economic system. Islamic banking is a unique model proposed by
Muslim economic thinkers on the basis of Islamic commercial law (Fiqh Muamalat).
Banking in Islamic framework should be based on risk-sharing instead of interest and two-
tier mudarabah should be the form of operational basis. Banks should offer banking services
with profits from partnerships, fees and commissions from other services(Uzair, 1978). Also,
Mudarabah contract binds the financier only in terms of financial liability; the working
partner bears no part of the loss accruing to capital extended by the financier. It is stated
that there should have transparency and ethics in both sides otherwise moral hazard is
inevitable due to asymmetric information (Khan, 2010). Other than profit-loss sharing
products (Mudarabah and Musharakah), some non-PLS (trade-based) products and services
are, namely, Murabaha (markup), Ijarah (lease), Bay’Salam (deferred delivery), Bay Muajjal
(deferred payment), Jo’alah (service fee) and Qard al hasana (interest-free loan or charity
loan) are being offered by the Islamic banks (Uzair, 1978;Saiti, 2017;Juisin et al., 2023).
According to Statista (2023), the global Islamic finance markets’gross asset value is
amounted to about US$3.95tn in 2021, and it is projected to US$5.9tn by 2026. Bangladesh is
in the ninth position in globalIslamic banking assets in 2021 (Zawya, 2023). Islamic banking
industry started operations in 1970s and is now a growing segment in the banking system
and its market share is increasing year after year (Ali et al.,2022). Islami Bank Bangladesh
Limited, the first Islamic bank in Bangladesh, was established in 1983 (Hassan et al., 2023a).
Currently, Bangladesh has 10 complete Islamic banks, 23 Islamic banking branches and 511
Islamic
banking
products

Islamic banking windows. The percentage of total deposit is 26.19, total investment is 28.52
and the market share is 26.80 among the total 61 scheduled banks in Bangladesh. Although
the Bangladesh Bank, the central bank, made a guideline in 2009 for the Islamic banking
industry, there is an absence of monitoring activities of Islamic banks (Alam et al.,2019).
Due to the absence of a separate law and a full-pledged guideline, Islamic banks individually
have developed their customized Shariah governance mechanisms that serve their purposes
(Hassan et al., 2023b). It is not only in the case of Bangladesh; many Muslim countries are in
the similar circumstances. The issue is not only guideline or framework but also in
implementation. Besides, the current financial system itself is unfavourable to implement
any comprehensive unique guideline (Alam et al.,2019).
2.2 Adoptions of Islamic banking services
Perception creates a sense of awareness about something (Kaakeh et al.,2018). Adoption means
to take something, to use or to acquire. If a person perceives something goodness, he or she is
prone to adopt that thing. Adoption has a close link with intention and leads to final
consumption (Kaakeh et al.,2018). Many researches have been done for testing adoption of
Islamic financial institutions. Majority studies of the previous works are based on Asian
context. The previous studies have found that knowledge and awareness, religious motivation,
attitude, religiosity, subjective norm, perceived behavioural control (PBC), self-efficacy and
compatibility are the major determining factors (Kaakeh et al.,2018;Han et al., 2018;Hoque et al.,
2022). Knowledge and awareness, convenience and religious motivation are the most dominant
factors in this category. This means that the more aware customers are, the more they tend to
adopt Islamic banking services. Religious motivation and obligation drive customers to adopt
and even shift from the conventional banks. Convenience which means comfort or easiness to
open account and operate account is one of the key drivers. In the socio-demographic category,
income and education are the most discussed ones. The more the customers are educated, the
more they are prone to adopt the Islamic banking services. Few studies have been done on
comparative analysis between Muslims and non-Muslims’customers and found the differences
in motivation for adopting Islamic banking services (Lujja et al., 2018).
Customer perceptions regarding Islamic banks have been discussed by using different
marketing theories. The most significant factors are service quality, tangible benefits,
convenience, bank image and reputation, trust, Shariah compliance, customer loyalty and
brand equity of the banks (Kaabachi and Obeid, 2016;Anouze et al., 2019;Abdullrahim
and Robson, 2017,Fianto et al., 2020;Hoque et al.,2022;Ab Hamid et al.,2023;Moosa and
Kashiramka, 2023). Besides, some studies focus on the role of fintech, customer
relationship management and shariah compliance on the adoption of e-banking among
the Islamic banks’customers (Hasan et al., 2020;Mulia et al., 2021;Usman et al., 2022;
Tegambwage and Kasoga, 2023;Mustapha et al., 2023). There are few studies explaining
the mediating and moderating effect of price, religiosity, attitude and subjective norm
(Han et al., 2018;Hoque et al., 2022). There are no such findings explaining the mediating
and moderating effect of convenience or Shariah compliance. Hence, there is a clear
research gap to explore. Furthermore, this is one of the premier research works on multi-
group analysis (MGA) for identifying the gender influences on behavioural intention of
the Islamic banking services.
2.3 Ajzen’s theory of planned behaviour and theoretical framework of the study
Theory of reasoned action (TRA) and TPB are the two most discussed theories for
identifying the adoption factors of Islamic banking services (Olaniyi and Echchabi, 2012;
Kaakeh et al.,2018;Ali et al.,2022). The TRA theory is one of the popular theories in
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behavioural analysis of business and economics area. It postulates that behaviour consists
of three theoretical dimensions: attitude, subjective norm and intention (Fishbein and Ajzen,
1975). This theory is the pioneer framework TPB developed by Ajzen (1985). Attitude and
subjective norm are the common determinants of the intention in both the theories. However,
PBC as self-efficacy factor has been included to identify the intention of the TPB model
which is the extension of TRA model (Ajzen, 1985). It is stated that most of the papers are
based on the analysis of behavioural science theories for exploring customers’purchase
intention. There are some papers addressing marketing theories as well. Here, many papers
are based on SERVQUAL model for exploring marketing-related factors (Amirzadeh and
Shoorvarzy, 2013,Altaf et al.,2017).
TPB model is the most discussed one in behavioural science studies. This theory extends
and incorporates the non-voluntary constructs of behaviour: attitude, PBC, subjective norm
and intention (Ajzen, 1985). In this study, TPB comprises three additional variables that
determine intentions and behavioural actions to engage in Islamic banking services: Islamic
value, Shariah compliance and convenience.
2.3.1 Attitude. This variable defines an evaluative influence of perceptions on
performing specific behaviour (Ajzen, 1985). In the TPB, attitude is stated to as how an
individual evaluates the influence of positive or negative perceptions while performing a
particular behaviour (Ajzen, 1985). Besides, it has a good link with intentions of doing
something. Many empirical studies had been done by researchers to explore association
between the intention of adopting Islamic banking services and how customers’attitude
influences this intention. There is a positive and significant association between attitude and
intention for identifying determining factors of using Islamic banking services (Charag et al.,
2020;Han et al.,2018). From the above discussion, the following hypothesis is:
H1. Customer attitudes will have a positive and significant impact on behavioural
intentions.
2.3.2 Subjective norm. This element is a common but inevitable construct of both the TPB
and the TRA models (Fishbein and Ajzen, 1975;Ajzen, 1985). According to Ajzen (1985), it
has a direct effect on one’s behaviour because of social pressure and influence on decision-
making. The previous studies have found mixed outcomes. For instance, Zinser (2019) have
found that the subjective norm or social group’sinfluence neither creates nor exerts any
significant impact on customers’intention to buy some product or service of Islamic banks.
However, Atal et al. (2020) have demonstrated that there is a substantial and positive effect
of the social group’sinfluence on customers’intention to buy Islamic banking products or
services. Hence, the following hypothesis is:
H2. The subjective norm (SN) will have a positive and significant impact on the
intention.
2.3.3 Perceived behavioural control. This variable is an extension to TRA model. According
to Ajzen (1985), other than attitude and subjective norm, PBC has a great impact on the
decision-making process of a customer. It is induced by the presence of sufficient resources
and capacity to control barriers to behaviours (Ajzen, 1985). Many studies have been done
on assessing the relationship between Islamic banking services and PBC (Hoque et al.,
2022a;Han et al., 2018;Hatta et al.,2022). Some studies have found the role of PBC in
positively influencing customers’intention to use the products and services of Islamic banks
(Mindra et al.,2022;Atal et al.,2020). Hence, the following hypothesis was formulated on the
basis of previous literature:
Islamic
banking
products

H3. Perceived behavioural control will have a positive and significant impact on the
intention.
2.3.4 Intention. This factor shapes an individual’saffinity to perform in a particular way
towards something particularly buying product or service. According to Ajzen (1985),
intention has a direct relationship with behavioural action. Intention drives a customer’s
inner mind before, during and post-purchase of a product or service (Altunel and Koçak,
2017). In the Islamic banking sector, behavioural intention is a common determinant to
predict consumer behaviour, from both sides: behavioural aspects (Han et al.,2018;Hoque
et al., 2022) and marketing aspects (Hossain and Leo, 2009;Anouze et al., 2019). Many
previous studies have found significant relationship with behavioural action or actual usage
of Islamic banking services in different contexts (Khursheed et al., 2021).
H4. Intentions will have a positive influence on the behavioural action to use Islamic
banking services.
2.3.5 Behaviour. Intention is a part of the attitude component of mental volition and a
strong predictor of behaviour (Fishbein and Ajzen, 1975). Intention is not the actual
behaviour rather it is deciding element of doing something practically. Behaviour is the
ultimate and final stage of both TPB and TRA models (Ajzen, 1985). It varies with
individual to individual. To understand the bank client behaviours, many studies have been
done (El Mallouli and Sassi, 2022;Charag et al.,2020;Han et al., 2018; Altunel and Koçak,
2017.
2.3.6 Islamic value. Islamic values refer to the values and beliefs through which one
adheres to religious practices in his or her daily life (Suhartanto et al., 2020). These values
create religious obligation (Hoque et al.,2022). Islamic values or religiosity is a difficult thing
to study particularly assessing the bank selection criteria (Hatta et al., 2022b;Hoque et al.,
2022). Previous studies have demonstrated that Islamic value has a positive influence on the
selection of Islamic banking services (Hatta et al., 2022a;Mindra et al., 2022). For instance,
Mindra et al. (2022) suggested that strong Islamic values drive a customer to use and retain
the Islamic banking services. It is argued that customers with high Islamic values are highly
likely to give a preference towards adopting services from Islamic banks than the services
from conventional banks. However, there is a variation of faith and religious motivation
among the Muslims (Hoque et al.,2022). Based on the discussion, the following hypothesis
is:
H5. Customer intentions towards Islamic banking services are significantly influenced
by Islamic values.
2.3.7 Convenience. This factor refers as a comfort while doing something. It has significant
relationship with bank selection criteria and continuing the services particularly Islamic
banking context (Haque et al.,2009;Anouze et al., 2019;Butt et al., 2018). Bank’s functional
ATM network, proximity of bank branch to university campus, friendliness and
professional bank staff are the major determinants of the bank selection among Nigerian
students (Ezeh and Nkamnebe, 2018). Moreover, “availability of large branch networks”,
“goodwill of the bank”,“convenient access to ATM location”and “good complaint
management”are the important factors to open bank account and continue the banking
services (Anouze et al.,2019;Hossain and Leo, 2009). Some studies have found that
convenience has mediating association between attitude and intention while using adopting
Islamic banking services (Butt et al.,2018;Haque et al.,2009). Hence, there is a gap of
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studying the mediating effect of convenience on the behavioural actions instead of only
intentions. Also, there is no work studying moderating of convenience between intention
and actual usage. So, the hypotheses are:
H6. Convenience in Islamic banks will have a direct and positive impact on the
intentions of customers towards Islamic banking services.
H7. Convenience in Islamic banks will have a direct and positive impact on the
behavioural actions of customers towards Islamic banking services.
H8. Convenience in Islamic banks will have indirect effects on the behavioural actions
of customers towards Islamic banking services through intention.
H9. Convenience in Islamic banks will have moderating relationship between intention
and the actual behaviour to adopt the Islamic banking services.
2.3.8 Shariah compliance. Compliance means due diligence or complying the set rules.
The shariah compliance refers to customers’perceptions about the Islamic banking
transactions which are free from prohibited activities (kaakeh et al., 2019). To elaborate,
the Muslim religious scholars and economic thinkers have firmly opined that all
Muslims must also avoid financial transactions that involve riba (literal meaning is
excess), excessive gharar (uncertain outcome), mayasir (gambling) and haram
(religiously forbidden) products Uzair, 1978). The argument behind the ban of those
elements in financial transactions is to ensure economic justice as well as social justice
(Chapra, 2000). It is evident that many things are clearly stated in Fiqh Muamalat
(Islamic Commercial Law) (Ahmad, 1980). Previous studies have demonstrated that
Shariah compliance is a major determining factor of choosing and using Islamic
banking services (Jan and Shafiq, 2021;Kaakeh et al., 2019;Lee and Ullah, 2011). For
instance, Lee and Ullah (2011) have found that customers have high reverence towards
the Shariah compliance issue and they change their behaviour if the Islamic banks do
not maintain Shariah principles. To understand Shariah compliance, respondents
should have proper knowledge of Shariah and how the principles function in Islamic
banking transactions (Usman et al., 2022). Furthermore, Saqib et al. (2016)
demonstrated that Shariah compliance acts as a moderator between service quality and
customer satisfaction in Islamic banks. Shariah compliance has mediating relationship
between attitude and intention while using adopting Islamic banking services (Shome
et al., 2018). Hence, there is a gap of studying the mediating effect of Shariah
compliance on the behavioural actions instead of only intentions. Also, there is no work
studying moderating of Shariah compliance between intention and actual usage. Hence,
the hypotheses are:
H10. Shariah compliance in banks has direct and positive impact on the intentions of
customers towards Islamic banking services.
H11. Shariah compliance in banks has direct and positive impact on the intentions of
customers towards Islamic banking services.
H12. Shariah compliance will have indirect effects on the behavioural actions of
customers towards Islamic banking services through intention.
H13. Shariah compliance will have moderating relationship between intention and the
actual behaviour to adopt the Islamic banking services.
Islamic
banking
products

2.3.9 Gender influences in behavioural adoption. Elmassah and Abou-El-Sood (2022) has
investigated the impact of gender in adopting Islamic banking services in the context
of UAE. It is argued that male and female may show different behaviours while
choosing Islamic banking services. For instance, the preferences of banks and their
product usage vary from male to female customers (Almossawi, 2001). When making
decisions, the relational aspects are the top-most concerns because they love
community and socially orientation than male, whereas men’smainstimuliisthecore
features of any service, as it is argued that they are more material and goal-oriented
(Iacobucci and Ostrom, 1993). In the banking industry, cost is more significant factor
for men than women (Yu, 2012). In this study, there is an attempt to study the
moderating effect of gender while adopting Islamic banking services in Bangladesh.
So, the hypothesis is:
H14. There is a moderating effectof gender in adopting Islamic banking services.
After reviewing the previous literatures, the conceptual framework of this paper is presented
in Figure 1.
3. Methodology
3.1 The research design
The major aim of this study is to explore the perceptions the customers while adopting the
Islamic banking services in Bangladesh. Besides, this study also aims to identify differential
impact of independent variables on dependent variables in respective to the male and female
gender group. The research approach of this research is exploratory in nature. Deductive
approach has been applied as the study has been extending the TPB proposed by Ajzen
(1985). The TPB theory is highly studied theory in Islamic finance and banking literatures
(Hoque et al., 2022). One of the major reasons is that many new behavioural theories are
evolved using fundamental basis of the TPB. Also it gives a wider horizon to understand,
Figure 1.
Conceptual
framework
Atude
Subjecve norm
Perceived Behavioral
Control
Intenon Behaviour
Islamic Value
Shari’ah
Compliance
Convenience
Source: Authors’ own work based on TPB model by Ajzen (1985)
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predict or change of behaviour of respondents particularly behavioural intention or usage of
particular things (Ajzen, 2020).
A quantitative method has been chosen as the design for this research to identify the
leading factors to adopt the Islamic banking services in Bangladesh. According to Creswell
(2012), the quantitative approach enables the researchers to empirically test a theory by
identifying the relationship between the constructs.
3.2 The sample of the research
In this study, the authors have used a convenience sampling approach, as there is
confidentiality issue from the bank side and also there is a restriction to access exact number
of clients in different Islamic banks in Bangladesh. Furthermore, the convenience sampling
is the most applicable sampling procedure in for identifying Islamic banking adoption or
selection criteria (Kaabachi and Obeid, 2016;Kaakeh et al.,2018,2019;Ezeh and Nkamnebe,
2020;Suhartanto et al., 2020;Mulia et al., 2021;Rahman et al., 2023;Hoque et al., 2022;Mohd
Thas Thaker et al., 2022;Atal et al., 2020). These papers have been published in good quality
journals by the authors studying different contexts: South Asia, East Asia, Middle-East,
Europe and Africa.
This paper has used the formula presented by Tabachnick and Fidell (2007) for
calculating the required sample size. Their method is the highly cited and used in survey-
based research design (Memon et al.,2020). Suggest that the total number of independent
variables studied determines the minimum number of cases needed: N>50 þ8m(where m
¼number of independent variables). In this study, 310 is the sample size which is
statistically significant to study a model.
The descriptive profile of the study (Table 1) indicates that male participants (56%) are
higher than female participants (44%). In the sample, 48% of the respondents are aged
between 21 and 30, and 30% of the respondents belong to 31–40 age group. Majority of the
respondents are undergraduates or graduates’levels which consist of 79% and others
comprise 21%. Besides, private sectors’respondents comprise 40% and the percentage of
the business is 34%. All of them have been using Islamic banking services at least
two years.
Table 1.
Demographic data
Variable Description Respondent(s)
Gender Male 175
Female 135
Age group 21–30 130
31–40 113
41–50 47
51–above 20
Education level Secondary 30
Higher secondary 45
Bachelors 110
Masters and above 135
Occupational sector Public 54
Private 106
Business 80
Others 70
Source: Authors’own work
Islamic
banking
products

3.3 Instruments and data collection
This study uses survey approach by using structured questionnaires. The data has been
collected only from those who have an account in any Islamic bank’sbranchorIslamic
window branch of conventional bank. The data collection process has been designed by
structured questionnaires which takes into consideration about respondent’sviewpoint
on the Islamic banking services. There are two parts in the survey. In the first portion, six
questions are for identifying demographic information of the respondents, and the second
part consisted of 28 questions, focused on variables. A five-point Likert scale (1–5ratio)
has been used to measure the independent variables and the scale ranging from 1 (highly
disagree) to 5 (highly agree). The variables and the items were adopted through
reviewing previous studies. The items representing attitude, PBC, subjective norm and
intention towards Islamic banking have been adapted from Mindra et al. (2022) and El
Mallouli and Sassi (2022). The items representing Islamic values are taken from the work
of Hoque et al. (2022). Convenience and Shariah compliance have been taken from the
studies of Arshad et al. (2016) and Han et al. (2018). The questionnaires have been
translated into Bangla for the clear understanding of the respondents. Only customers of
Islamic banks and Islamic banking window of conventional banks of Bangladesh were
taken as population for sampling. The data was collected from April to mid-June 2023.
The surveys have been conducted online by using Google form. In total, 380 surveys were
collected, from which 70 surveys were reduced due to less than 95% completion (Hair
et al., 2013).
3.4 Data analysis
There are two phases in the data analysis. In the first phase, model fitness has been tested
by examining the relationship between latent factors and the observed variables. In the
second phase, the regression analysis has been done to explain the proposed mode’s
hypotheses through structured equation modelling (SEM) approach. SEM is one of the most
popular methods to investigate the complex relationships among the latent constructs in
behaviour in the business and management studies (Hair et al.,2013). In this study, IBM
AMOS 25 and Smart-PLS 4.0 tools have been has been used for testing and analysing the
proposed model. The reason behind using two SEM tools (one is CB-based and PLS-based) is
to present a comprehensive analysis. CB-SEM using AMOS is better in providing model
fitness indices, whereas PLS-SEM fit indices are still evolving (Dash and Paul, 2021). And
so, this study uses CB-SEM for testing model fit indices, as there are three additional
variables other than core variables in TPB model. PLS-SEM is a better tool for analysing
structural model in case of analysis of the latent constructs with good visualization (Hair
et al., 2013;Dash and Paul, 2021). Then, PLS-SEM algorithm has been done for analysing
measurement model and structural model to explore the relationship between independent
variables and dependent variables. Both the mediation and moderation analysis have been
done to explain specific indirect and total indirect effects. Furthermore, this study uses MGA
between male and female group for identifying the differential impact of independent
variables on dependent variables:
Regression model: Y ¼aþbXiþe(“a”represents constant, and “e”represents error term
of the model).
Dependent variable (Y): Behaviour
Independent variables (Xi): attitude, subjective norm, perceived behavioural control,
Islamic value, convenience, Shariah compliance and intention.
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4. Results and discussion
4.1 The analysis of measurement model
This study has exploratory factor analysis (EFA) and confirmatory factor analysis (CFA)
for testing the measurement model. In EFA, the maximum likelihood method has been used.
Factor loadings above 0.6 are considered for further testing a model (Hu and Bentler, 1999).
To know the reliability and validity of the model, CFA has been recorded.
In Table 2, the CMIN/DF value is 2.298 #3 which indicates an acceptable fitofthemodel
(Kline, 2005). AGFI value of 1 indicates a perfect fit(Kline, 2005). In this study, the value of
AGFI is 0.837 which proves the fitness of the model. CFI value closed to 1 shows a perfect fit
(Hu and Bentler, 1999). In this study, the value of CFI is 0.914 which represents the very good
fit of the proposed model. The RMSEA value ranging from 0.05 to 0.08 is considered
acceptable, and value #0.05 is considered excellent (MacCallum et al., 1996). In this study, the
value of RMSEA is 0.65 which is acceptable range. In the SEM model, the exogenous factors
(attitude, subjective norm, PBC, Islamic value, Shariah compliance and convenience) and the
endogenous factors (intention and behaviour) have been tested for the analysis. Figure 2
shows the CFA of the proposed model (exogenous and endogenous factors). Furthermore, the
CFA analysis includes the variances and covariances of the model. It has been found that all
the items and the constructs are significantly explained the model (Kline, 2005).
In this study, factor loadings, Cronbach’s alpha, average variance extracted (AVE) and
composite reliability (CR) have been used to check internal consistency, construct reliability
and convergent validity of the model, respectively. The acceptable value of factor loadings
should be 0.6 and above, the value of Cronbach’s alpha and the value of composite reliability
should be 0.6 and 0.7 and above, respectively, and the value of AVE should be 0.5 and above
(Hair et al.,2013). According to the results shown in Table 3, the values of factor loadings
are between 0.632 and 0.938, the values of Cronbach’s alpha are between 0.671 and 0.903, the
values of composite reliability are between 0.775 and 0.939 and the values of AVE are
between 0.563 and 0.838, which are in the acceptable ranges.
Furthermore, the Fornell–Larcker criterion (Table 4) and the HTMT ratio (Table 5) have
been tested for analysing discriminant validity According to Fornell and Larcker (1981), the
value of Fornell–Larcker criterion and the square root of the AVE of all the constructs
should be greater than paired intercorrelation between the latent constructs. In this study,
the principle of Fornell–Larcker criterion has been met, as all the values are greater than
paired intercorrelation. HTMT values detect the multi-collinearity problem of the constructs
and the values above 0.90 indicating a lack of discriminant validity (Gold et al.,2001). In this
study, the lowest HTMT ratio is 0.230 and the highest ratio is 0.900 which shows there is no
multi-collinearity problems in the model.
This study has also tested R
2
,R
2
adjusted and Q
2
predict to determine the predictive relevance
of the model (Table 6). It is shown that almost 50% of the values of intention are
Table 2.
Model fit indices
Model NPAR CMIN DF CMIN/DF CFI AGFI RMSEA P
Default model 76 514.804 224 2.298 0.914 0.837 0.065 0.000
Saturated model 300 0.000 0 1.00
Independence model 24 4,197.37 276 15.208 0.000 0.163 0.214 0.000
Notes: NPAR = number of parameters; CMIN = chi-square value; DF = degrees of freedom; CFI =
comparative fitındex; AGFI = adjusted goodness-of-fit index; RMSEA = root-mean-square error of
approximation; p-value = significance
Source: Authors’own work
Islamic
banking
products

Figure 2.
Confirmatory factor
analysis of studied
model
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collectivelyexplained by all independent variables while 74% of the variance in behaviour is also
explained by all independent variables. According to Cohen (1988), if the value of R
2
is greater
than 0.26, then it is considered as substantial. In the current research, R
2
values of all dependent
variables lie in substantial case. Also, this study has analysed Q
2
predict to assess the model’s
practical relevance and value of Q
2
should be more than 0 (Q
2
>0) (Hair et al.,2013). In this study,
the proposed model is highly relevant with the practice as both the constructs have values more
than 0.
4.2 The analysis of the structural model and the hypotheses
After the analysis of measurement model, the next step is to determine the proposed
hypotheses to run two things in SmartPLS 4.0 such as algorithm as well as bootstrapping
Table 3.
Construct reliability
and validity
Items/variable
Factor
loadings
Cronbach’s
alpha
Composite
reliability
Average variance
extracted (AVE)
ATT1 0.808
ATT3 0.828
ATT4 0.825
Attitude (ATT) 0.757 0.860 0.673
BH1 0.938
BHV2 0.911
BHV3 0.901
Behaviour (BHV) 0.903 0.939 0.838
COMP2 0.829
COMP3 0.821
COMP4 0.817
Compliance (COMP) 0.757 0.861 0.673
CONV2 0.877
CONV3 0.883
CONV4 0.815
Convenience (CONV) 0.818 0.892 0.733
INT1 0.926
INT2 0.929
INT3 0.818
Intention (INT) 0.871 0.921 0.796
ISV1 0.805
ISV3 0.822
ISV4 0.837
Islamic value (ISV) 0.760 0.861 0.674
PBC1 0.720
PBC2 0.775
PBC3 0.733
Perceived behavioural control
(PBC)
0.682 0.794 0.563
SBN1 0.755
SBN2 0.662
SBN3 0.791
Subjective norm (SBN) 0.671 0.775 0.532
Source: Authors’own work
Islamic
banking
products

technique. In this study, there are 14 hypotheses for testing the proposed model, nine of
which are direct, two of which are indirect (mediating) and three of them are moderating
(Figure 3). Five of the direct hypotheses are supported, while just four of them are not
(Table 7). As evidenced by the t-values of 1.224 and p-value 0.221 >0.05, t-values of 0.456
and p-value 0.648 >0.05, respectively, compliance to behaviour and intention have no
significant relationship. PBC to intention with t-values 0.987 and p-value 0.324 >0.05,
and subjective norm to intention with t-values of 0.123 and the p-values of 903 >0.05
have no significant relationship.
With a t-value of 3.733 and a p-value 0.000 <0.05, attitude has a significant impact on
intention. With t-value of 6.315 and p-value 0.000 <0.05 and t-value of 4.326 and p-value
0.000 <0.05, convenience has a substantial influence on both intention and actual
behaviour, respectively. The Islamic value construct also has an influence on intention to
adopt Islamic banking services. The intention has the strongest influence on the actual
behaviour with t-values of 13.423 and 0.000 <0.05.
Table 5.
Heterotrait-monotrait
ratio (HTMT)
Variable ATT BH COMP CONV INT ISV PBC SBN
ATT
BH 0.645
COMP 0.347 0.456
CONV 0.603 0.790 0.558
INT 0.594 0.891 0.402 0.757
ISV 0.698 0.749 0.633 0.690 0.898
PBC 0.705 0.756 0.582 0.867 0.750 0.883
SBN 0.900 0.779 0.431 0.798 0.660 0.851 0.895
Note: The limit of HTMT ratio is no more than 0.90
Source: Authors’own work
Table 6.
Predictive relevance
of the study
Variable R
2
R
2
adjusted Q
2
predict RMSE
Behaviour (BHV) 0.738 0.734 0.539 0.685
Intention (INT) 0.496 0.486 0.460 0.744
Note: *p<0.05 (two-tailed test)
Source: Authors’own work
Table 4.
Discriminant validity
(Fornell–Larcker
criterion)
Variable ATT BH COMP CONV INT ISV PBC SBN
ATT 0.820
BH 0.620 0.915
COMP 0.299 0.370 0.820
CONV 0.523 0.678 0.428 0.856
INT 0.560 0.834 0.322 0.641 0.892
ISV 0.439 0.583 0.476 0.543 0.514 0.821
PBC 0.483 0.544 0.378 0.604 0.518 0.641 0.750
SBN 0.725 0.590 0.340 0.563 0.515 0.521 0.533 0.729
Source: Authors’own work
JIMA

Along with analysis of direct hypotheses, this study has two indirect hypotheses (Table 8).
Intention significantly mediates the relationship between convenience and actual usage
(p-value 0.000 <0.05). Whereas intention has no significant mediation between Shariah
compliance and actual usage of Islamic banking services (p-value 0.419 <0.05).
Other than mediating analysis, this study has also tested moderation effects of the two
exogenous variables (convenience and Shariah compliance) through using SEM. Although
there is a mediating relationship between convenience and actual behaviour, there is no
moderation effect between these two variables with convenience. Like mediating effect, this
Figure 3.
Path coefficients of
the structural model
Table 7.
Results of structural
model
Path Sample mean (M)
Standard deviation
(STDEV)
t-statistics
(jO/STDEVj)p-values (***) Results
ATT !INT 0.261 0.072 3.733 0.000 Supported
COMP !BH 0.055 0.044 1.224 0.221 Not supported
COMP !INT 0.023 0.047 0.456 0.648 Not supported
CONV !BH 0.209 0.048 4.326 0.000 Supported
CONV !INT 0.387 0.062 6.315 0.000 Supported
INT !BH 0.656 0.049 13.423 0.000 Supported
ISV !INT 0.158 0.069 2.293 0.022 Supported
PBC !INT 0.069 0.066 0.987 0.324 Not supported
SBN !INT 0.000 0.072 0.123 0.903 Not supported
Note: *p<0.05 (two-tailed test)
Source: Authors’own work
Islamic
banking
products

study has found no moderating impact of Shariah compliance between intention and actual
behaviour in Islamic banking services as the p-value of both the variables exceed 0.05
significance level (Table 9).
Furthermore, the study has done MGA to determine whether there are any gender-
specific differences, and the findings represent that there isno significant difference between
male and female groups in the actual usage of Islamic banking services. It is shown that
eight out of the nine direct hypotheses have been shown to have no significant difference
between the two groups (Table 10). However, there is a significant difference between the
two groups in the impact of effort subjective norm on intention (p-value 0.000 <0.05).
Therefore, it has been discovered that the influence of the independent variable (subjective
norm) on the dependent variable (intention) is greatest in the male group.
To find the model’s comparative differences between two groups, the nested model
comparisons have been tested by assuming unconstrained to be correct. The p-value of the
constraint is 0.107 which shows no significant difference between male and female in the
adoption of Islamic banking services in Bangladesh (Table 11).
Table 8.
Indirect effects
Path Sample mean (M)
Standard deviation
(STDEV)
t-statistics
(jO/STDEVj)p-values (*) Results
COMP !INT !BH 0.023 0.027 0.808 0.419 Not supported
CONV !INT !BH 0.271 0.045 6.104 0.000 Supported
Note: *p<0.05 (two-tailed test)
Source: Authors’own work
Table 9.
Moderation effects
Path Sample mean (M)
Standard deviation
(STDEV)
t-statistics
(jO/STDEVj)p-values (***) Results
CONV INT !BH 0.024 0.039 0.732 0.464 Not supported
COMP INT !BH 0.017 0.049 0.293 0.770 Not supported
Note: *p<0.05 (two-tailed test)
Source: Authors’own work
Table 10.
PLS-MGA (multi-
group analysis
between male and
female)
Path
Path coefficients-diff
(male female)
t-value original
(male vs female)
p-value new
(male vs female) (***) Results
ATT !INT 0.026 0.160 0.873 Not supported
COMP !BH 0.034 0.359 0.720 Not supported
COMP !INT 0.032 0.379 0.705 Not supported
CONV !BH 0.117 1.072 0.284 Not supported
CONV !INT 0.180 1.260 0.209 Not supported
INT !BH 0.153 1.383 0.168 Not supported
ISV !INT 0.112 0.778 0.437 Not supported
PBC !INT 0.080 0.611 0.542 Not supported
SBN !INT 0.002 0.010 0.017 Supported
Note: *p<0.05 (two-tailed test)
Source: Authors’own work
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4.3 Discussion of the findings
This paper aims to examine the direct and indirect relationship between the exogenous
(attitude, subjective norm, PBC, Islamic value, convenience, Shariah compliance and
endogenous variables (intention, behaviour) to explore the adoption factors of Islamic
banking services in Bangladesh. There are 14 hypotheses, studied from previous literatures,
which have been developed to test the proposed model. Both AMOS 25 and Smart-PLS 4.0
software have been used for the analysis. H1 to test relationship between attitude and
intention has been found statistically significant in the model. This paper’sfindings are
consistent with the previous studies (Hoque et al., 2022 Atal et al.,2020;Han et al., 2018). The
outcome of the study indicates that attitude is a good predictor of intention which leads to
actual usage of Islamic banking services in Bangladeshi respondents. Attitude comes from
the positive perceptions about something, and here majority respondents have positive
feelings towards Islamic banks. H2 and H3 which test the relationship between subjective
norm and PBC, respectively, with intention have been found statistically non-significant in
the model. This is consistent with other findings of the previous studies. For instance,
Mindra et al. (2022) and Zinser (2019) have found no significant relationship between PBC
and intention in US context. Han et al. (2018) have found no significant relationship between
subjective norm and intention. But there are some studies that have found the association
between both independent variables (subjective norm and PBC) with intention. The above
results illustrate that the social influence is not a significant predictor in the respondents’
decision-making process. Also lack of knowledge of Islamic banking operations in
Bangladesh is prevalent as PBC has no substantial relationship with neither intention nor
behaviour. However, there is a significant relationship between Islamic value and intention
and also actual usage of Islamic banking services. It means that respondents feel religious
obligation to have account in Islamic banks and continue the services for this motivation.
The finding of this study is consistent with other findings (Rahman et al., 2023;Atal et al.,
2020;Hatta et al., 2022b). H5 is also significant which represents the relationship between
intention and behaviour. It is also consistent with the previous studies.
H6 and H7 which test relationship between convenience and both on intention and
behaviour have been found statistically significant in the model. This is consistent with
other findings of the previous studies (Haque et al., 2009;Kamiyama and Kashiwagi, 2019).
It is the most significant determinant of actual usage of Islamic banking services. It
indicates that the respondents adopt the services of Islamic banks in Bangladesh due to
convenience. Increasing comfort to the customers by adding new features should be one of
the most important priority factors. Furthermore, intention acts as a mediator between
convenience and behaviour of the customers as H8 has also been found to be significant.
This refers that convenience has both direct and indirect impact on actual adoption of
Table 11.
Nested model
comparisons
Model DF CMIN P
NFI
Delta-1
IFI
Delta-2
RFI
rho-1
TLI
rho2
Measurement weights 16 31.515 0.012 0.007 0.007 0.005 0.005
Structural weights 25 143.431 0.000 0.030 0.034 0.014 0.016
Structural covariances 31 63.832 0.000 0.014 0.015 0.008 0.009
Measurement residuals 55 184.343 0.000 0.039 0.044 0.001 0.002
Constrain (male vs female) 1 2.591 0.107 0.001 0.001 0.000 0.000
Source: Authors’own work
Islamic
banking
products

Islamic banking services. However, according to the result of H9, there is no moderating
effect of convenience between intention and actual behaviour.
On the contrary, according to the result of H10 and H11,Shariah compliance has no
direct or even indirect impact on actual adoption of Islamic banking services. However, the
previous studies have found significant influence of Shariah compliance of Islamic banks on
intention to adopt services offered by the Islamic banks in the context of Malaysia from the
findings of Jan and Shafiq (2021) and Uddin (2022) in Bangladesh. Besides, there is no
moderating effect of Shariah compliance between intention and actual behaviour. This
means that the customers usually do not bother about Shariah compliance of the banks. It
can be the absolute obligation towards religious faith (Hoque et al., 2022) or they feel that
Islamic banks usually follow Shariah rulings. Thus, it can be deduced that people use
Islamic banking products and services due to religious obligation not for the shariah
compliance issue. It is quite surprising and contrasting findings. What can be the reason?
There are two probable reasons: one is the lack of Islamic financial literacy or shariah-
related knowledge (Yeni et al.,2023) and the other one is lack of shariah governance
guideline (Alam et al.,2021). The first one is supported, as PBC has no significant
relationship neitherwith intention nor with actual behaviour. It is argued that literacy about
shariah issue is not only evident among customers but also among employees. Even the
shariah division officers have lack of Islamic commercial laws (Alam et al.,2019). And so, it
can be deduced that there is a dearth of Islamic financial literacy or awareness about
Shariah among the customers. Furthermore, there is no shariah governance framework and
shariah guidelines from the central bank of Bangladesh. As a result, Islamic banks do not
maintain complete shariah principles in their overall functions, and at the same time they try
not to violate them fully (Alam et al., 2021). So, it can be opined that our findings reflect the
current status quo of Islamic banking operations.
According to the result of H14, gender is not significant enough to explain differences
among actual usage decision in the context of Bangladesh. This result is consistent with the
findings of ElMassah and Abou-El-Sood (2022) in the context of UAE. This means that there
is no differential impact on adoption decision of Islamic banking product and services
between male and female group. However, only subjective norm shows significant
differential construct between these two groups which means that male group is more
socially influencedwhile decision-making process than the female group.
Above all, attitude, Islamic value and convenience have direct and indirect effect on
behavioural intention and actual adoption of Islamic banking services. The above results
indicate that the internal belief system and values learned from Islam act as a driver to
adopt Islamic banking products and services (Hoque et al.,2022). Also, the respondents
prefer comfort or convenience over Shariah compliance of the banking services offered by
the Islamic banks in Bangladesh. Although there is no direct or indirect relationship
between shariah compliance with behavioural intention to adopt Islamic banking products
and services, Islamic value has shown significant influence on behavioural adoptions.
Finally, it can be deduced that the customers are prone to choose and use Islamic products
and services not only for belief but also for comfort. Figure 4 shows the final proposed model
of this thesis.
5. Conclusion
Modern banking is based on interest and biased in favour of the capitalists, whereas Islamic
banking is based on cooperation (profit-loss sharing) among the parties and elimination of
interest in all forms. Muslim societies never legitimized interest before the 19th century, but
then interest has slowly penetrated practices in the Muslim world which is very unfortunate.
JIMA

People are forced to deal with interest-based financial institutions; otherwise, they
experience inconveniences. Interest-free Islamic banking in fact grew as a part of literature,
and it can challenge the capitalist and socialist systems (Ahmad, 1980). Islamic banking
industry is growing and getting popularity day by day, but the growth is not compatible
with the needs. There are both positive and negative perceptions prevailing in the Islamic
banking operations. It is argued by the scholars that Islamic banks need to emphasize both
on Shariah compliance as a religious and ethical obligation. However, our findings suggest
that Islamic banks should increase the comfort or convenience factors to attract more
customers. Furthermore, attitude and Islamic values also drive a customer to adopt Islamic
banking services.
5.1 Theoretical implications
This paper postulates the behavioural finance studies in IBF by testing three new constructs
(Islamic value, convenience and Shariah compliance) with the existing TPB model. This
paper has also explored a unique gap by mediation and moderation effect of two exogenous
variables (convenience and Shariah compliance) on independent variables (intention and
actual behaviour). Although there is no moderation effect of these two variables on
behavioural adoption, there is a mediation effect of convenience between intention and
behaviour. Along long with convenience and Shariah compliance, Islamic value as new
exogenous variables has been fit for testing the TPB model of Ajzen (1985) which is a clear
theoretical contribution of this thesis. This provides us scope to further studies in other
contexts. However, in the final findings, attitude, Islamic value and convenience constructs
show significant relationship with the intention and actual behaviour. PBC, social influence
and shariah compliance do not have significant influence.
5.2 Practical implications
The practical implications of this research are related to organizational internal strategic
changes. Like the previous findings, there is a significant relationship between Islamic
values both on intention and usage of Islamic banking services. Islamic banks should not
confuse customers in terms of shariah compliance, as they (banks) are encasing Islamic
values of them (customers). Promoting Islamic values and holding Islamic values in the
Figure 4.
Final proposed model
Atude
Intenon Behaviour
Islamic Value
Convenience
Source: Authors’ own work
Islamic
banking
products

organizational culture are very important issues. The findings demonstrate that the
customers do not bother shariah compliance. According to the findings, customers prefer
more on convenience than shariah compliance, Islamic banks should increase more facilities
and capacities. For example, ATM booths and branches, installing automation like fast
internet banking, creating friendly environment for the customers, developing easy-going
service process and good complaint management are few of the top-most concerns. There
are 50 more conventional banks, and so the competition is high. Innovative initiatives
should be taken to offer more convenient services, and for this, Islamic should invest in
research and development. The adoption of fintech in service management can be one of the
impactful initiatives. Also, the integration of functional departments with customer service
department is inevitable.
The findings demonstrate that the customers do not bother Shariah compliance. Also,
there is no significant relationship between PBC with intentions. Lack of shariah-related
knowledge and Islamic financial literacy could be the probable reasons. Islamic banks can
take initiatives to make customers aware through different awareness campaigns. It is really
essential to develop programmes by highlighting the differences of mechanisms and
functions between conventional and Islamic banks. For example, country-wide information
week through their branches. In this week, they can design several education programmes
to aware customers about the importance and beauty of Islamic banking. For the
policymakers and regulators, this study has a suggestion to take necessary measures to
increase Islamic financial literacy in a mass level. Furthermore, the customers seem to adopt
the services only for religious obligation and convenience and also, they do not bother
whether Islamic banks fully follow sharia compliance or not. In comparison with Malaysia,
Turkey and Pakistan, there is a dearth of policies and regulations related to shariah
governance and compliance. Also, there is no higher educational programmes in
Bangladesh related to Islamic finance and banking. There is only one private university
offering a bachelor degree in IBF out of 100 more universities. Furthermore, the regulators
should think for creating shariah compliance supervisory board for ensuring transparency
and accountability of the Islamic banks.
5.3 Limitations and future scope
Firstly, this paper focuses on customers’perspectives due to the specificity of scope; there are
opportunities of further studies on employees, board of directors, Shariah supervisory board,
authorities and experts’perceptions. Secondly, Bangladesh has been taken as a context
which cannot be used as generalization for the world. There is a new scope of doing cross-
country research works. For example, Bangladesh as a Muslim-majority country and
Germany as a Muslim-minority country. Thirdly, the paper has used only quantitative
methodology. Future research can be possible by using qualitative methodology or mixed
methodology. Through mixed methodology, it will be possible to triangulate the quantitative
and qualitative data for a comprehensive study. Finally, there is possible new research that
can be done by comparing conventional and Islamic banking services in Bangladesh context.
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Afzal, A., Khan, A.H., Mahmood, S. and Sabbir, R. (2019), “Shariah awareness and customer perception
on PAKSERV: the drivers of future behavioral ıntentions in Islamic banking”,Pacific Business
Review International, Vol. 11 No. 9, pp. 133-142.
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in intention to adopt Islamic mobile banking in Pakistan? An empirical study”,Journal of Islamic
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Encouraging Self-Protective Behavior, pp. 79-94.
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worldpopulationreview.com/country-rankings/muslim-population-by-country
Corresponding author
Buerhan Uluyol can be contacted at: borhanseti@gmail.com
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