The efficacy of the model of goal directed behavior in explaining Islamic bank saving

Abstract

Purpose The purpose of this paper is to test the efficacy of model of goal-directed behavior (MGB) to explain and predict savings at Islamic bank behavior. The importance of understanding consumer intention to develop good strategy to accelerate consumer saving at Islamic bank is inevitable. One of the most popular theories explaining behavioral intention was the MGB. Although it has been validated and tested in a variety of contexts, this theory has never been applied in behavior related to Islamic banks. Design/methodology/approach The present study used a combination of qualitative and quantitative data. Qualitative data obtained from 31 in-depth interviews were used to develop behavioral beliefs components and a control beliefs component, while quantitative data obtained from a survey of 316 respondents were used to test the model. Structural equation modeling was the main data analysis technique. Findings The result shows that MGB has good indicators of fit, which implies that it can be used to explain and predict intention to save at Islamic bank. This research also reveals several behavioral and control beliefs that positively contribute to intention. Originality/value This paper contributes to behavior prediction literature by exploring the possibility of the application of the MGB in the Islamic bank context. It also gives a deeper understanding of the Indonesian Islamic bank consumer market that has great potential for development in the future.

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

“…For this research, the term Islamic finance includes, Islamic banking and financial services, sharia-compliant investment products, and Sukuk (Islamic bonds). Because of the global expansion and growth of Islamic finance, the literature on this topic is rather rich (e.g., Janahi and Mubarak 2017; Dariyoush and Hussin 2016;Fang 2016;Setyobudi et al 2016;Malik et al 2011;Elbeck and Dedoussis 2010). More than 100 Islamic banks now exist in over 35 Muslim and non-Muslim countries alike (Ariff and Rosly 2011).…”

Islamic marketing: A literature review and research agenda

“…Islamic finance also dominates Muslim marketing literature with works by (Alserhan, 2010b; Fatema et al., 2018; Ireland, 2018; Jamshidi & Hussin, 2016; Ltifi et al., 2016; Mahdzan et al., 2017; Maulan et al., 2016; Sayani et al., 2013; Setyobudi et al., 2016; Wahyuni & Fitriani, 2017; Yeniaras, 2016; Yildiz et al., 2014; Zinser, 2019) publishing works with varied focus, for example—emphasizing customer loyalty (Ireland, 2018; Wahyuni & Fitriani, 2017); consumer behaviour and attitudes towards banking and finacial sector (Fatema et al., 2018; Jamshidi & Hussin, 2016; Ltifi et al., 2016; Mahdzan et al., 2017; Yeniaras, 2016; Yildiz et al., 2014).…”

Islamic Banking Implementation: Supportive Role of Business Service

“…Several authors have defined the term Islamic Banking, correlating the operations of banks with Islamic instructions (Mbawuni & Nimako 2017;Nurdin 2016;Setyobudi et al 2016;Mirakhor 2000;Haque, Jamil & Ahmad 2007). Complying with the ideologies of Shariah law the term Islamic finance denotes to the financial product or services (Buchari, Rafiki & Al Qassab 2015;Gait & Worthington 2008).…”

“…Finally, the two profit-sharing mechanisms or partnership contracts are favoured by Islamic law, which include Mudarabah (partial-equity partnership or profit sharing) and Musharakah (full equity partnership or partnership financing). Clear differentiation is made by past researchers on differences between traditional and Islamic finance system (Mariadas & Murthy 2017;Nurdin 2016;Setyobudi et al 2016;Riaz, Khan & Khan 2017;Iqbal & Mirakhor 2011); The Islamic financial system endeavours for justifiable, impartial social order and economic system. The ban of interest (riba) in the Islamic financial system is envisioned to evade misuse, of profiteering over handling of prices and to guard the deprived (i.e.…”

“…Islamic finance products have advanced and made its presence from 1970's, once Islamic banks started its dissemination to customers in a responsible and reliable way. Such efforts from Islamic banks have changed the landscape of financial service industry and customers started considering Islamic finance products comparing with conventional banking products (Nurdin 2016;Setyobudi et al 2016;AlMaimani & Johari 2015). Based on the figures reported for 56 countries (Reuters 2018), the global Islamic finance industry grew year-on-year by 11% to US$ 2.4 trillion in assets during 2017, backed by CAGR growth of 6% from 2012.…”