The Effect of Knowledge and Service Quality on Public Preference in Sharia Bank in Riau Province

Abstract

Islamic banks in Indonesia are experiencing rapid growth and demonstrating promising trust. This development can be seen from the standpoint of the national Islamic banking market. Riau Province is one of Sumatra's provinces where the majority of the inhabitants are Muslims. The objective of this study was to discover how knowledge and service quality affect people's preferences for Islamic banks in Riau Province. The sampling technique used was proportionate stratified random sampling, while the data collection technique used was a questionnaire. To analyze the data, the descriptive quantitative method was employed. In analyzing quantitative data, Partial Least Squares–Structural Equation Modeling (PLS-SEM) was used with a total sample of 384 people. The findings of this study show that the significant value in the first hypothesis test (H1) is 0.000< 0.05 or less than 5%, implying that the positive path coefficient value suggests that knowledge has a significant positive effect on preference. Based on the results of the tests, it was determined that the first hypothesis was accepted. Meanwhile, the Second Hypothesis Test (H2) has a significant value of 0.000 < 0.05 or less than 5%, indicating that the path coefficient value is positive and that Service Quality has a significant positive effect on Preference. In other words, the second hypothesis is accepted.