Brand familiarity vs profit-sharing rate: which has a stronger impact on Muslim customers’ intention to invest in an Islamic bank?

Abstract

Purpose The purpose of this study is to examine the impact of brand familiarity and profit-sharing rate on Muslim customers’ brand trust, perceived financial risk, perceived value and intention to invest in an Islamic bank. Design/methodology/approach A between-subjects experimental design was applied in the study. Six experiments involving two brand familiarity levels and three profit-sharing rates were conducted using a total of 217 samples. Randomization was applied in the study, which generated unequal sample sizes for each group of experiments. Findings The findings of this experimental study demonstrated that Muslim customers’ familiarity with the bank’s brand has a significant impact on their brand trust and intention to invest in an Islamic bank. The study also found that the profit-sharing rate has a significant impact on the perceived value both with and without interaction with brand familiarity. Research limitations/implications The current study applies an independent measured design or a between-subjects experimental design, that resulted in unequal sample sizes. In addition, the study also does not control for the types of bank accounts owned by respondents. The design may invite the presence of confounding variables that exist due to individual differences and environmental variables. Practical implications The results show that Islamic bank managers should care about the brand familiarity issue, which strongly influences customers’ brand trust and customer intention to invest in an Islamic bank. In addition, Islamic bank managers should pay attention to the profit-sharing rate given to customers, as it interacts with brand familiarity in influencing customers’ perceived value. Originality/value This study examined the impact of brand familiarity and profit-sharing rate on Muslim consumers’ brand trust, perceived risk, perceived value and intention to save in an Islamic bank. The paper provides a shred of empirical evidence to the theoretical relationship between the subjective and objective cues that influence the formation of customers’ trust, perceived financial risk, perceived value and intention in the Islamic bank context.

Religiosity versus profit-loss sharing: how Islamic banks brand fidelity influence the Muslim consumers’ commitment

“…It will provide the quality of inferences and facilitate knowledge acquisition and specific contributions (Amin, 2020;Abalkhail, 2021). It also uncovers a correlation between religiosity in Islamic countries and consumer commitment to the products compliant with the Shariah principle (Hadji Latif, 2021;Hati et al, 2021;Tabrani et al, 2018). It has an essential role in investigating the correlation between religiosity and Muslim consumers' behavior.…”

“…Besides, religiosity has also influenced the people's psychology and the strength of products and services (Ali et al, 2019;Amin, 2020b;Boraz, 2019;Consiglio et al, 2017). The economic value of banking services and products also strongly influences Muslim consumers to adopt Islamic banks (Hati et al, 2021). There are represent brand fidelity.…”

“…Brand fidelity is the consumer's faithfulness, which has four aspects: forgiveness based on performance and price, derogation of alternatives and cognitive interdependence (Grace et al, 2020). Brand familiarity also leads people to adopt financial products (Hati et al, 2021). Meanwhile, consumers' attitude toward evaluating positive or negative personality experiences regarding the Islamic banks' system complies with Islamic law (Ahmadova and Aliyev, 2021).…”

“…For instance, Hispanic and Asian communities in the USA will climb to 30% and 8%, respectively, by 2050 (Kipnis et al, 2019), as well as half of the population worldwide will be Muslim by 2030 (Solomon, 2018). This phenomenon robust the demand for brands, products and services compliant with their culture and religion (Aji and Muslichah, 2022;Hati et al, 2021;Jan and Shafiq, 2021;Sandikci, 2018). In the region with Muslims as a minority, such as Thailand, social influence and trust have a crucial role to influence people to adopt Islamic bank (Ezeh and Nkamnebe, 2022).…”

Full-Fledged VS Islamic Bank Windows: Which One Do Muslim Consumers Know Better and Prefer More?

“…The Islamic bank Indonesia has experienced what so-called a 5-percent-trap phenomenon (Karim Consulting, 2016). Even though Indonesian Muslim customer awareness of Islamic banking is increasing, as of 2019, the market share of Islamic banking had only reached 6.3%, reflecting a very slow growth in market share (Hati et al, 2021) The slowing market growth in Islamic bank development, which to some extent has reached stagnation, raises the question of whether Muslim customers know their options to open an account. To date, there is only a dearth of research comparing the Muslim customer behavior in full-fledged vs. Islamic bank windows.…”