The influence of products and services, social and religious perspective, and confidence on acceptance towards islamic banking among non-muslim customers

Abstract

Being one of the strongest proponents of Islamic Banking, Malaysia has been promoting the idea of implementing Islamic Banking System (IBS) with the purpose of expand the ring of unity among non-Muslims and to ensure a fair distribution and utilization of fund in compliances with Islamic principles in order to parallel the conventional system. The existence of financial institutions for both Islamic and conventional, Malaysians have been presented with numerous choices to choose the products and services that meet their needs and wants. This study provides important contribution to the Islamic bankers in understanding customer attitudes, preferences and characteristics. The purpose of this research is to investigate the acceptance level towards Islamic banking among individual customers in Northern Malaysia. A sample size of 70 respondents is drawn from Alor Setar and Baling. The results show that more than half of the respondents are aware of the Islamic banking products and services in Northern Malaysia. Multiple Linear Regression analysis is then conducted, and all independent variables have significant positive effects on acceptance level, where the independent variables are appealing products and services, social and religious perspectives, and confidence in Islamic banking. Besides, confidence in Islamic banking has the highest Cronbach’s alpha and the strongest impact on acceptance level.