A study of customers’ perception of Islamic banking in Oman

Abstract

Purpose The concept of Islamic banking (IB) as a discipline and the introduction of the full-fledged Islamic banks and Islamic windows are relatively newer developments in the banking sector in Oman. This paper aims to assess customers’ perceptions of the Islamic banks and IB windows in Oman. Design/methodology/approach Following the interpretive paradigm and an exploratory research design, data collected through personal interviews with a group of 60 respondents in two of the prominent cities in Oman were analysed qualitatively. Findings The study found that customers in Oman had mixed feelings about the Islamic Banks. While some of them were not sure if the banks follow the Islamic principles, a majority of them had not opened an account with the Islamic banks or Islamic windows. The study revealed some vulnerabilities in the areas of their operations, marketing practices, staff knowledge of products and customer-dealings, as well as customers’ understanding of Islamic banks, their principles and practices. Practical implications As the advent of IB is relatively new to Oman, the insights gained by this study will have wider implications for the growth of IB locally. The outcomes of this study would appraise the officials and regulators of Islamic banks and Islamic windows with customers’ perception of IB. The elimination of the identified weaknesses would help them to improve the knowledge, quality and the marketing and promotion of products and services while competing with the conventional banks. Originality/value This study is a pioneering effort to know the status of IB and customers’ motivations in Oman towards IB.

Marketing Islamic Financial Services: A Review, Critique, and Agenda for Future Research

“…Consequently, research on Islamic finance has sharply accelerated within the past two decades, first in management, finance, and economics (see, Al Rahahleh et al 2019;Ayub 2018;Fang 2014;Khan and Bhatti 2008a;Kurpad 2016) and more recently, in international business and marketing literature (see, Belwal and Maqbali 2019;Butt et al 2018;Fang 2016;Amin et al 2014;Khaliq et al 2011). Despite its robustness, the literature on Islamic finance remains fragmented, offering little guidance for researchers attempting to conceptualize the marketing strategies of Islamic finance.…”

Examining the Determinant Factors on Consumer Switching Intention Toward Islamic Bank in Central Java, Indonesia

“…Islamic banks are defined as "A system of banking or banking activities that is consistent with the principles of the Shari'ah (Islamic rulings) and its practical application through the development of Islamic economics" (Belwal & Al Maqbali, 2018). Islamic banks are not using the interest system on each transaction but with the term profit sharing.…”

“…Several previous studies have proven that religiosity has a linear and significant relationship to consumer attitudes on Islamic banks (Abou-Youssef et al, 2015), consumer attitudes on Muslim fashion trends(Riptiono, 2019). The other literature also proves that there is a positive relationship between religiosity of consumer intentions on Islamic products such as halal banking products (Butt & Aftab, 2013), halal products(Nurhayati & Hendar, 2019), consumer choice toward Islamic banks(Belwal & Al Maqbali, 2018). Therefore, the hypotheses tested are:H5: Religiosity has a significant effect on consumer attitude toward Islamic bank.…”

“…Islamic banks and conventional banks are truly significant difference, the conventional banks apply the interest system while Islamic banks assume that interest is riba and is prohibited in Islam (Sayani & Miniaoui, 2013). Riba is income from customer loans received in advance or referred to as interest in conventional bank terms (Belwal & Al Maqbali, 2018). Islamic banks forbid the practice of riba and do not provide savings or loan interest to customers because all transactions are carried out based on the distribution of profits and losses between the bank and the customer.…”

Corporate Brand Image of Islamic Bank in Malaysia: Antecedents and Consequence

“…However, despite this encouraging success, Islamic bank has been viewed as less popular and less experienced as compared to the conventional banks (Suhartanto, 2019). Not only that, studies also have shown that there are still consumers who are unaware of the differences between the concept of an Islamic bank as compared to its conventional counterparts (Al-Tamimi, Lafi, & Uddin, 2009;Belwal & Al Maqbali, 2019;Kaakeh, Hassan, & van Hemmen Almazor, 2018;Souiden & Rani, 2015). This is applicable not only among Muslim customers, but also among non-Muslim target markets, as Mohamad and Majid (2016) claimed that non-Muslim customers are aware of the Islamic bank but have low knowledge and understanding on the concept.…”