Islamic Banking Operations: Preparing the Fit for Internationalization

Transcription

1 Islamic Banking Operations: Preparing the Fit for Internationalization Izah Mohd Tahir 1 Nor Mazlina Abu Bakar 2 Abstract The quality of service is vital for all service industries including the financial industry. Islamic banks are of no exception. Given today s competitive environment, Islamic banks in Malaysia need to evaluate and improve their service quality to achieve the standard as expected by the industry. This study examines the key issues relating to the level of understanding, delivery and internal evaluation of service quality from the perspective of Islamic bank management. A questionnaire-based survey was conducted among 40 employees and 136 customers of two Islamic banks in Malaysia. Questionnaires were based on twenty six items under six dimensions; compliance, tangibility, reliability, responsiveness, assurance and empathy. Frequency distribution is used to describe the sample. Paired and independent t-tests were used to test significant differences between sample means. The results of the study reveal the following. Firstly, the management of Islamic banks had a fairly good understanding of their customers expectations. Secondly, in terms of service delivery, the delivered services fell below customers expectation. Finally, Islamic bank management perceived that their service delivery was unsatisfactory. These findings imply key considerations for quality improvement towards internationalization. Keywords: Service Quality, Islamic Banks, Perceptions, Internationalization, Malaysia JEL Code: G2, M21, M31 1. Introduction One of the more popular trends in the Malaysian banking industry has been for banks to commit themselves to a formal quality management process. This quality push, in line with the country s aspiration to become a global Islamic financial centre, calls on not only the conventional banking sector but also the Islamic banking sector to evaluate and improve their service processes and procedures. Conventional banks, being the first to get on the quality bandwagon, have shown remarkable progress. Although their involvement in the Islamic banking operation began recently, their corporate quality programs embedded in Islamic transactions happily seem to be achieving their primary aim. The quality programs implemented at the older Islamic 1 2 Associate Professor in Banking, Faculty of Business Management & Accountancy, University of Darul Iman Malaysia. izah@udm.edu.my Lecturer, Faculty of Business Management & Accountancy, University of Darul Iman Malaysia. normazlina@udm.edu.my

2 50 Journal of Islamic Economics, Banking and Finance, Volume-5 Number-3 banks (Bank Islam and Bank Muamalat), however, seem to be relatively new and still unproved in their effectiveness. Islamic finance emerged in the Malaysian financial scene with the establishment of the Muslim Pilgrims Savings Corporation in It was the first Islamic financial institution in Malaysia assisting Muslims to save for performing hajj (pilgrimage to Mecca and Medina). However, its role is rather limited as it is a non-bank financial institution. The success of the corporation, however, provided the main impetus for establishing Bank Islam Malaysia Berhad (BIMB) in 1983 which represents a fullfledged Islamic commercial bank in Malaysia. Later, the second full-fledge Islamic bank, Bank Muamalat was established in As at March 2009, there are seventeen full fledged Islamic banks, seven are foreign Islamic banks and 10 are local Islamic banks. The list is presented in Table 1 below. Table 1: List of Islamic banks in Malaysia No Name Ownership 1 Affin Islamic Bank Bank Berhad Local 2 Al Rajhi Banking & Investment Corporation (Malaysia) Berhad Foreign 3 Alliance Islamic Bank Berhad Foreign 4 AmIslamic Bank Berhad Local 5 Asian Finance Bank Berhad Foreign 6 Bank Islam Malaysia Berhad Local 7 Bank Muamalat Malaysia Berhad Local 8 CIMB Islamic Bank Berhad Local 9 EONCAP Islamic Bank Berhad Local 10 Hong Leong Islamic Bank Berhaf Local 11 HSBC Amanah Malaysia Berhad Foreign 12 Kuwait Finance House (Malaysia) Berhad Foreign 13 Maybank Islamic Bank Local 14 Public Islamic Bank Berhad Local 15 RHB Islamic Bank Berhad Local 16 Standard Chartered Saadiq Berhad Foreign 17 OCBC Al-Amin Bank Berhad Foreign Source: Bank Negara Malaysia, 2009 Apart from these banks, a majority of the conventional and international banks that operate in this country have been given licence by Bank Negara of Malaysia to operate special tellers for handling Islamic transactions. Thus, this development has widened the roles of players in the Islamic banking industry. With a population of about million people of which 50.4 percent are Malays and Muslim, the establishment of Islamic banking thus fulfilled their requirements to have a banking system that align with the teachings of Islam. At present, in Muslim countries like Malaysia, Islamic banking exists side-by-side with those of

3 Islamic Banking Operations: Preparing the Fit for Internationalization 51 conventional banks. According to El Qorchi (2005), the number of Islamic financial institutions worldwide has risen from one in 1975 to over 300 today in more than 75 countries with total assets estimated to exceed $250 billion and growing at a rate of 15 percent annually. As globalisation and liberalisation of financial institutions accelerate, competition among banks in offering products and services becomes more intense. As Muslim customers in Malaysia become more educated, better informed, more internalized, and as the Malaysian economy becomes more and more knowledge based, the demand for high quality services expands with increases in customers buying power. In order for these banks to provide high quality products and services, they need firstly to investigate the level of customers perceptions and expectations to their service quality from their own perspective. Through that information, they could then strategically adjust their service quality to fit the global market. The purpose of this study was to assess the level of service quality in Islamic banking in Malaysia from the management s perspective. The specific objectives of this study were to examine: Management s perceptions of customer expectations (Understanding) Management s perceptions of service delivery (Delivery) Management s perceptions of service quality (Internal Evaluation) This paper is structured as follows. The following section, Section 2, outlines the literature review, while Section 3 details the data and methodology used in the study. Section 4 presents the findings and Section 5 presents the limitations and future research. Section 6 presents the conclusion and implications of the study. 2. Literature Review Many of the studies on service quality have been carried out within the framework of the service quality model (SERVQUAL instrument) developed by extensive research by Parasuraman et. al., (1985, 1988, and 1991). Since then, many researchers have used this 22-item scale to study service quality in the banking sector for example, Gounaris et. al. 2003; Arasli et. al The service quality model was derived from the magnitude and directions of the following gaps; Gap 1 (Understanding): the difference between consumer expectations and management perceptions of consumer expectations. Gap 2 (Service standards): the difference between management perceptions of consumer expectations and service quality specifications.

4 52 Journal of Islamic Economics, Banking and Finance, Volume-5 Number-3 Gap 3 (Service performance): the difference between service quality specifications and the service actually delivered. Gap 4 (Communications): the difference between service delivery and what is communicated about the service to consumers. Gap 5 (Service quality): the difference between customer expectations of service quality and customer perceptions of the organization s performance. Gap 6 (Delivery Gap): the difference between customer perceptions of service delivery and what management believes they deliver. Gap 7 (Internal Evaluation Gap): the difference between management s perceptions of customer expectations and management s perception of its service delivery. Tsang and Qu (2000) studied service quality from the management s perspective in China s hotel industry. Studies on the service quality from the management s perspective in banking is still lacking. Sureshchandar et. al., (2002), for example, focussed on the management s perception of total quality service rather than gap analyses. In the conventional banking industry, many of the studies focus on customers perspectives. The studies on service quality has been undertaken for example by Lassar et. al., (2000); Duncan and Elliott, (2002); Jabnoun and Al-Tamimi, (2002); and Arasli et. al., (2005). Lassar et. al. (2000) studied service quality using two major service quality constructs, SERVQUAL and Technical/Functional Quality models of the private banking industry. They found that the Technical/Functional Quality-based model of service quality is better suited compared to the SERVQUAL-based model. On the other hand, Duncan and Elliot (2002) explored the relationship between customer service quality and financial performance in Australian banks and credit unions. They found that there was a significant relationship between financial performance and customer service quality scores. Jabnoun and Al-Tamimi (2002) examined service quality at UAE commercial banks using the SERVQUAL model and included thirty items in the five dimensions of SERVQUAL. When they tested the developed instrument for reliability and validity, they found that the instrument had only three dimensions. Finally, Arasli et. al. (2005) studied service quality perceptions of Greek Cypriot bank customers using the SERVQUAL model. They however, extend the study by

5 Islamic Banking Operations: Preparing the Fit for Internationalization 53 looking at the relationship between service quality, customer satisfaction and positive word of mouth. They found that the expectations of bank customers were not met where the largest gap was obtained in the responsiveness-empathy dimension. In addition, the reliability items had the highest effect on customer satisfaction, which in turn had a statistically significant impact on the positive word of mouth. In an Islamic banking study, Othman and Owen (2001 and 2002) adopted a model known as the CARTER model to study customer service quality. He proposed six dimensions; Compliance, Assurance, Reliability, Tangibles, Empathy and Responsiveness. 34 items were included in these six dimensions. Their study focused on Kuwait Finance House and found that the CARTER model used to measure SQ in the Islamic banking industry was valid. For the purpose of this study, we will only focus on Gap 1 (understanding), Gap 6 (delivery) and Gap 7 (internal evaluation) because the other gaps (Gap 2, Gap 3, Gap 4 and Gap 5) are not relevant to the research scope of this study. 3. Data and Methodology The sample of the study involved 40 personnel and 136 customers from two Islamic banks. 100 self-administered questionnaires were distributed to Islamic bank employees and 200 were distributed to the banks customers. 40 questionnaires from the management were returned and analysed, representing a response rate of 40 percent. On the other hand, 136 questionnaires from bank customers were returned, giving a response rate of 68 percent. The service quality attributes were adapted from the work of Parasuraman et. al., (1985) and Othman and Owen (2001, 2002). There are two sets of questionnaires, one for bank employees and the other for the bank customers. Both of these sets comprised of three parts: Part 1 contained expectations (E) and Part 2 consisted of Perceptions (P) of respondents according to the six dimensions listed. These are Compliance, Tangibility, Reliability, Responsiveness, Assurance and Empathy. A five-point Likert Scale ranging from strongly disagree = 1 to strongly agree = 5, was used to measure the 26 attributes. Part 3 of the questionnaire comprised questions regarding personal profiles of respondents which included gender, marital status, position in the bank and income. The Statistical Package for Social Science (SPSS) package was be used to analyse the data set. A frequency distribution was used to describe the sample. The mean and

6 54 Journal of Islamic Economics, Banking and Finance, Volume-5 Number-3 standard deviations of the attributes were also computed. Finally, independent and paired t-tests were used to test the significant difference between sample means. 4. Findings 4.1 Demographic Profile of Islamic bank customers and bank employees The sample of Islamic bank customers consisted of 54 percent male and 46 percent female. Of the respondents, 46 percent were single, 44.5 percent were married and 9.5 percent were divorced. About 50 percent were in the age range between years old, 27.7 percent between years old, 18 percent between years old and the remainder were age 50 and above. In terms of education, 70 percent of the respondents had a University degree while the remainder had primary or secondary education. 66 percent earned RM24K or less, while the remainder earned more than RM24K per year. The sample of Islamic bank employees comprised of managers (12 percent), assistant managers (12 percent), marketing executives (37 percent) and other staff (27 percent). 57 percent of the respondents were male and the remainders were female. They were well educated with 64 percent holding university diplomas and degrees while the remainder had secondary education. 75 percent of the respondents were in the age group between 30 to 49 years old and 55 percent in the income group between RM24K to RM60K per year. 4.2 Management perception of customer expectations The level of understanding is calculated by taking the difference between customer expectations and management perceptions of customer expectations. A negative gap indicates that management underestimated customer expectations; a positive gap indicates that management overestimated customer expectations. Independent t-tests were used to see whether there were any significant sample mean differences. The results are presented in Table 2. From the results using the independent t-test, 11 of the 26 attributes were positive and significant at < 0.05 while 4 attributes were significant at < 0.01 level. This implied that the expectation scores as perceived by the management were higher than customer

7 Islamic Banking Operations: Preparing the Fit for Internationalization 55 Table 2: Gap mean differences between management perceptions of customer expectations and customer expectations of service quality Attributes Expectation (Customer) Perception (Management) P - E t-value Compliance 1 Adherence to Islamic principles 4.61 (0.73) 4.75 (0.44) Provision of interest-free products 4.47 (0.78) 4.83 (0.38) ** 3 Provision of products that are accepted by Islamic law 4.43 (0.79) 4.83 (0.38) ** 4 Provision of profit sharing investments 4.36 (0.82) 4.88 (0.33) ** Tangibility 5 Modern-looking equipment 4.28 (0.89) 4.50 (0.60) Appealing physical activities 4.18 (0.87) 4.33 (0.62) Neat appearance of staff 4.26 (0.90) 4.45 (0.50) Materials associated with the service are visually appealing 4.08 (0.81) 4.40 (0.59) * Reliability 9 Staff keeping promise 4.15 (0.89) 4.40 (0.63) * Sincere interest in solving customers 10 problems 4.26 (0.93) 4.63 (0.49) * 11 Staff performing services right the first time 4.20 (0.89) 4.43 (0.59) Provide services at the time they promise to do 12 so 4.18 (0.86) 4.55 (0.50) ** 13 Insist on error-free records 4.05 (0.93) 4.63 (0.49) ** Responsiveness 14 Staff telling customers exactly when services will be performed 4.23 (0.86) 4.55 (0.55) ** 15 Prompt service 4.23 (0.84) 4.40 (0.59) Staff willingness to help 4.30 (0.90) 4.53 (0.55) Prompt response from staff 4.04 (1.05) 4.38 (0.59) ** Assurance 18 Behaviour of staff instil confidence in customers 4.05 (0.92) 4.55 (0.50) ** 19 Customers feel safe in their transactions 4.23 (0.87) 4.60 (0.50) ** 20 Friendliness and courtesy of staff 4.34 (0.87) 4.50 (0.51) Staff having knowledge to answer questions 4.42 (0.82) 4.40 (0.55) Empathy 22 Individual attention given by staff 4.12 (0.92) 4.30 (0.82) Convenient operating hours 4.20 (0.82) 4.48 (0.64) Staff giving customers best interest at heart 4.26 (0.82) 4.53 (0.51) ** 25 Personal attention given 3.85 (1.18) 4.33 (0.97) * 26 Understanding the specific needs of customers 4.19 (0.95) 4.43 (0.84) Grand Mean Score (26 attributes) 4.24 (0.60) 4.54 (0.32) ** Notes: * t-test two tail probability <0.01; ** t-test two-tail probability <0.05; standard deviations are in parentheses; negative gap indicates that management underestimated customers expectations; a positive gap indicates that management overestimated customers expectations.

8 56 Journal of Islamic Economics, Banking and Finance, Volume-5 Number-3 expectations in those 15 attributes. In addition, the grand mean gap score was and significant at < 0.05, indicating that bank management as a whole tend to have a fairly good understanding of customer expectations. Generally, from the results in Table 2, we can conclude that overall, this gap is not a major problem to the management of Islamic banks. 4.3 Management perception of service delivery To calculate the managements perceptions of their service delivery, we took the difference between the mean perception score for the customer and the management perception score. For this, we used the independent t-test and the results are shown in Table 3. Within these 26 attributes, only five attributes were significant at < 0.01 level and twenty attributes were significant at < 0.05 level. This showed that there was a significant difference in mean scores between customer perceptions of service delivery and what management believed they deliver. All the 25 attributes had negative mean scores. This indicates that the management overestimated their banks service delivery in meeting customers expectations. The biggest gaps ( 50) were related to Reliability, Responsiveness and Assurance. These were insist on error-free records, provide services at the time they promise to do so, sincere interest in solving customers problems, staff performing services right the first time, staff telling customers exactly when services will be

9 Islamic Banking Operations: Preparing the Fit for Internationalization 57 Table 3: Gap mean differences between management perceptions of their bank s service delivery and customer perceptions of service quality Attributes Perception Perception (Customer) (Management) CP-MP t-value Compliance 1 Adherence to Islamic principles 4.18 (1.02) 4.60 (0.55) ** 2 Provision of interest-free products 4.14 (0.92) 4.50 (0.68) * 3 Provision of products that are accepted by Islamic law 4.10 (0.99) 4.50 (0.60) * 4 Provision of profit sharing investments 4.12 (1.00) 4.40 (0.63) * Tangibility 5 Modern-looking equipment 3.81 (0.92) 4.13 (0.61) ** 6 Appealing physical activities 3.82 (0.97) 4.10 (0.67) * 7 Neat appearance of staff 3.88 (0.98) 4.28 (0.68) * 8 Materials associated with the service are visually appealing 3.80 (0.96) 4.20 (0.61) ** Reliability 9 Staff keeping promise 3.85 (0.80) 4.25 (0.59) ** 10 Sincere interest in solving customers problems 3.81 (0.93) 4.40 (0.59) ** 11 Staff performing services right the first time 3.81 (0.99) 4.35 (0.62) ** Provide services at the time they promise to do 12 so 3.74 (0.93) 4.40 (0.55) ** 13 Insist on error-free records 3.66 (0.91) 4.40 (0.63) ** Responsiveness 14 Staff telling customers exactly when services will be performed 3.75 (0.94) 4.33 (0.57) ** 15 Prompt service 3.76 (0.96) 4.28 (0.68) ** 16 Staff willingness to help 3.84 (0.98) 4.38 (0.63) ** 17 Prompt response from staff 3.65 (1.03) 4.20 (0.61) ** Assurance 18 Behaviour of staff instil confidence in customers 3.82 (0.96) 4.38 (0.67) ** 19 Customers feel safe in their transactions 3.96 (0.95) 4.38 (0.67) ** 20 Friendliness and courtesy of staff 3.88 (0.99) 4.30 (0.69) ** 21 Staff having knowledge to answer questions 3.74 (0.89) 4.25 (0.59) ** Empathy 22 Individual attention given by staff 3.65 (0.99) 4.15 (0.70) ** 23 Convenient operating hours 3.79 (1.06) 4.25 (0.63) ** 24 Staff giving customers best interest at heart 3.77 (0.89) 4.25 (0.54) ** 25 Personal attention given 3.61 (1.03) 3.93 (0.89) Understanding the specific needs of customers 3.72 (1.01) 4.20 (0.79) ** Grand Mean Score (26 attributes) 3.85 (0.64) 4.31 (0.44) ** Notes: * t-test two tail probability <0.01; ** t-test two-tail probability <0.05; std. dev. are in parentheses; a negative gap indicates that management overestimated their bank s service delivery in meeting customers expectations; a positive gap indicates that management underestimated their bank s service delivery in meeting customers expectations.

10 58 Journal of Islamic Economics, Banking and Finance, Volume-5 Number-3 performed, prompt response from staff, staff willingness to help, prompt service, behaviour of staff instil confidence in customers, and staff having knowledge to answer questions. These attributes showed significant shortfalls and need particular attention from the management to make improvements. The grand mean score showed a statistically significant mean difference between the management and bank customers. The score of significant at <0.05 level indicated that management overestimated their service delivery in meeting customers expectations. 4.4 Management perceptions of service quality The mean score between management perceptions and expectations of their service delivery are compared using paired t-test. The results as shown in Table 4 indicate a statistically significant difference on 10 of the 26 attributes. This implies that managers perceived that their level of service quality was below customers expectations. Even though the gaps were in all cases below 0.50, still the management need to rectify the shortfalls, otherwise the gaps may widen. A comparison of the overall mean expectation and perception scores revealed a statistically significant difference in sample means. The overall mean score was and significant at < 0.05 which would indicate that bank management believed that they were not doing a satisfactory job for their customers. 5. Limitations and Future Research The main limitation of this study, although it may be overcome in future research, is that all the data were gathered from a single region. It would be interesting to replicate the study on a national sample. Additionally, since Malaysia aspires to become a global Islamic financial centre, it would be appropriate and relevant to replicate the study using international samples. This is because when banks in this country provide services to international customers such as business travellers, tourists, students and expatriates, it is in a way just like exporting services to foreign markets while staying at home. Therefore, the quality and customer satisfaction issues attached to services are subject to international domains. 6. Conclusion and Implications This study is built on previous research conducted by one of the authors which look at the general picture of service delivery from the management perspective. Specifically, this study tried to examine the management s perceptions towards the level of service delivery in terms of understanding, service delivery and how management evaluate their service quality internally.

11 Islamic Banking Operations: Preparing the Fit for Internationalization 59 Table 4: Gap mean differences between management expectations and perceptions of service quality Attributes Management Expectation Management Perception P - E t value Compliance 1 Adherence to Islamic principles 4.75 (0.44) 4.60 (0.55) Provision of interest-free products 4.83 (0.38) 4.50 (0.68) ** Provision of products that are accepted by 3 Islamic law 4.83 (0.38) 4.50 (0.60) ** 4 Provision of profit sharing investments 4.88 (0.33) 4.40 (0.63) ** Tangibility 5 Modern-looking equipment 4.50 (0.60) 4.13 (0.61) ** 6 Appealing physical activities 4.33 (0.62) 4.10 (0.67) * 7 Neat appearance of staff 4.45 (0.50) 4.28 (0.68) Materials associated with the service are 8 visually appealing 4.40 (0.59) 4.20 (0.61) Reliability 9 Staff keeping promise 4.40 (0.63) 4.25 (0.59) Sincere interest in solving customers problems 4.63 (0.49) 4.40 (0.59) Staff performing services right the first time 4.43 (0.59) 4.35 (0.62) Provide services at the time they promise to do 12 so 4.55 (0.50) 4.40 (0.55) Insist on error-free records 4.63 (0.49) 4.40 (0.63) * Responsiveness 14 Staff telling customers exactly when services will be performed 4.55 (0.55) 4.33 (0.57) * 15 Prompt service 4.40 (0.59) 4.28 (0.68) Staff willingness to help 4.53 (0.55) 4.38 (0.63) Prompt response from staff 4.38 (0.59) 4.20 (0.61) Assurance 18 Behaviour of staff instil confidence in customers 4.55 (0.50) 4.38 (0.67) Customers feel safe in their transactions 4.60 (0.50) 4.38 (0.67) * 20 Friendliness and courtesy of staff 4.50 (0.51) 4.30 (0.69) Staff having knowledge to answer questions 4.40 (0.55) 4.25 (0.59) Empathy 22 Individual attention given by staff 4.30 (0.82) 4.15 (0.70) Convenient operating hours 4.48 (0.64) 4.25 (0.63) Staff giving customers best interest at heart 4.53 (0.51) 4.25 (0.54) ** 25 Personal attention given 4.33 (0.97) 3.93 (0.89) ** 26 Understanding the specific needs of customers 4.43 (0.84) 4.20 (0.79) Grand Mean Score (26 attributes) 4.54 (0.32) 4.31 (0.44) ** Notes: * t-test two tail probability <0.01; ** t-test two-tail probability <0.05; standard deviations are in parentheses; negative gap indicates that management believed their service delivery did not meet customers expectations; a positive gap indicates that management perceived that their service delivery exceeded customers expectations.

12 60 Journal of Islamic Economics, Banking and Finance, Volume-5 Number-3 The results of the level of understanding show that the older Islamic bank management had a fairly good understanding of what their customers expect. This is therefore not a problem area. However, the management did not transform this understanding by providing better service to their customers. In fact our previous results (see for example, Tahir et. al. 2006; Tahir and Ismail, 2004; and Haron et. al. 2004) found that customers perceptions were consistently lower than their expectations. In other words, from the customer perspective, the quality of Islamic bank service was considered unsatisfactory. Assessment on service delivery showed that management were over confident and self-assured in delivering good service. The crucial areas that need the attention of the management were related to reliability and responsiveness, particularly on these statements: insist on error-free records, provide services at the time they promise to do so, sincere interest in solving customers problems, staff performing services right the first time, staff telling customers exactly when services will be performed, prompt response from staff, staff willingness to help, prompt service, behaviour of staff instil confidence in customers, and staff having knowledge to answer questions. The findings of perceived service quality from the management perspective indicate that they believed service quality was below expectation. This is another issue that the management of Islamic banks need to address. Given today s competitive environment, and in response to the quality push and the aspiration of the country to become a global Islamic financial centre, at this juncture, we believe it is appropriate for the management of the older Islamic banks to seriously examine their mission, their corporate quality programs, employee training programs, internal marketing efforts, and customer service system. In addition, they must also consider that their performance measures now have to place a value on better responsiveness to customer needs. These measures and changes can be expensive in terms of employee time and effort, but the management of these banks need to find ways to overcome these hurdles, otherwise the increasing competition from conventional and international banks can shrink their market shares.

13 Islamic Banking Operations: Preparing the Fit for Internationalization 61 References Arasli H., Mehtap-Smadi S., and Katircioglu S. T., Customer Service Quality in the Greek Cypriot Banking Industry. Managing Service Quality. Vol. 15 No , pp Bank Negara Malaysia at dated March Department of Statistics Malaysia at retrieved on 30 March Duncan E. and Elliot G. Customer Service Quality and Financial Performance among Australian Retail Financial Institutions, Journal of Financial Services Marketing, vol. 7. 1, 2002, pp El Qorchi M. Islamic Finance Gears Up, Finance and Development, International Monetary Fund, vol. 42, no Gounaris S. P., Stathakopoulos V. and Athanassopoulos A. D. Antecedents to Perceived Service Quality: An Explatory Study in the Banking Industry, International Journal of Bank Marketing, Vol. 21 no. 4, 2003, pp Haron, S., Wan Nursofiza and Sharil Shafie, Adopting and Measuring Customer Service Quality (SQ) in Islamic Banks: A Case Study in Bank Islam Malaysia Berhad, Proceedings of National Seminar in Islamic Banking and Finance, Putrajaya, Kuala Lumpur, 2-3 March, 2004, pp Jabnoun N. and Khalifa A. A Customized Measure of service Quality in the UAE, Managing Service Quality, Vol. 15 No , pp Lassar W. M., Manolis C., and Winsor R. D., Service Quality Perspectives and Satisfaction in Private Banking, Journal of Services Marketing, vol. 14, no. 3, 2000, pp Othman A. Q. and Owen L., Adopting and Measuring Customer Service Quality in Islamic Banks: A Case Study in Kuwait Finance House, International Journal of Islamic Financial Services.. vol. 3 no. 1, 2001, April-June. Othman A. Q. and Owen L., A Multidimensionality of CARTER Model to Measure Customer service Quality (SQ) in Islamic Banking Industry: A Study in Kuwait Finance House, International Journal of Islamic Financial Services, Vol. 3 no. 4, 2002, January-March. Parasuraman. A., Berry L. and Zeithmal V., A conceptual model of service quality and its implication for future research, Journal of Marketing, vol. 49, Fall, 1985, pp Parasuraman. A., Berry L. and Zeithmal V., SERVQUAL: a multiple-item scale for measuring consumer perceptions of service quality, Journal of Retailing, vol. 64, no. 1, 1988, pp

14 62 Journal of Islamic Economics, Banking and Finance, Volume-5 Number-3 Parasuraman. A., Berry L. and Zeithmal V., Perceived Service Quality as a Customer-based Performance Measure: An Empirical Examination of Organizational Barriers Using an Extended Service Quality Model, Human Resource Management. Vol. 30, no.3, 1991, pp Statistical Package for Social Science, Version 11. Sureshchandar G. S., Rajendran C., Anantharaman R. N., and Kamalanabhan T. J., Management s Perception of Total Quality Service in the Banking Sector of a Developing Economy A Critical Analysis, International Journal of Bank Marketing, 20/4, 2002, pp Tahir I. M., Ismail, W. Z., and Bakar N. M., Customer Expectations and Perceptions of Service Quality in Islamic Banking, Paper presented at the 2 nd International Conference on Business, Management and Economics, Altinyunus Convention Centre, Cesme, Izmir, Turkey, June June, Tahir I. M., Ismail W. Z., Quality of Service in Islamic Banking: The Malaysian Case, Paper presented at the National Seminar in Islamic Banking and Finance, Putra Jaya, Malaysia, Tsang N. and Qu H., Service Quality in China s Hotel Industry: A Perspective from Tourists and Hotel Managers, International Journal of Contemporary Hospitality Management, 12/5, 2000, pp