Customers’ Perceptions and their Responses to Objectives of Islamic Banks – A Three-Wave Investigation

Abstract

A shariah-based organization is believed to have prime focus on interests of all the stakeholders, but how various stakeholders perceive the objectives of an Islamic institution and how they react with various attitudinal (commitment & intimacy) and behavior responses (word of mouth) have largely been ignored in the past. Against this backdrop this study presents a three-wave investigation of customer perceptions and responses about their banks. The results of the study are based on the questionnaire-based survey of stakeholders of both fully fledged Islamic banks and banks with Islamic banking windows. This study found that the mission statements of banks are difficult to comprehend; the customers of Islamic banks perceive that their bank aims at social objectives and thus they display higher level of commitment, intimacy and word of mouth than the customers of window operations. The findings suggest that policy makers should put an emphasis on strategic statements, objectives and customers’ reactions. Implications of this and future directions are discussed as a result of these findings.