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Full Length Research Paper
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Testing a model of Islamic banking based on service quality,
customer satisfaction and bank performance
Ashfaq Ahmad1*,
Kashif-ur-Rehman2 and Nadeem Safwan3
1Department
of Business Administration, University of Sargodha,
Pakistan.
2Department
of Management Sciences, Iqra University, Islamabad,
Pakistan.
3Department
of Management Sciences, Foundation University, Pakistan.
*Corresponding
author. E-mail: ashfaquos@gmail.com.
Accepted 22 December, 2010 |
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Abstract |
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This study analyzes the services quality of products offered by
Islamic banks with mediating effect of customer satisfaction on
bank performance. There is an increasing competition among banks
to capture new customers as well as to retain existing
customers. It requires a study to measure the impact of service
quality on customer satisfaction towards bank performance. Data
were collected from 720 respondents of 60 branches of six full
fledged Islamic banks operating in Pakistan by simple random
sampling. The researcher used PLS based SEM to assess the
magnitude of the relationship among service quality, customer
satisfaction and performance of Islamic banks. The results
indicate a strong positive relationship between service quality
and customer satisfaction, while weak positive correlation
exists between service quality and bank performance, but
negative relationship was found between customer satisfaction
and performance of Islamic banks in Pakistan. Furthermore, it is
found that customer satisfaction does not mediate between
service quality and bank performance. The gap between customer
satisfaction and bank performance may be due to bankers’
concentration on network expansion instead of customer
orientation and customer focus. This study enables the bankers,
policy makers and researchers to identify the factors that could
result a discrepancy between satisfaction and performance of
banks.
Key words:
Islamic banking, service quality, customer satisfaction, bank
performance. |
