An Empirical Study Of Customer Perceptions Of Service Quality Dimensions: A Comparison Between Islamic And Conventional Banks In UAE

Abstract

Purpose – In the dynamic landscape of modern banking, ensuring exceptional service quality stands as a cornerstone of success, influencing customer loyalty, satisfaction, and overall organizational performance. This empirical study delves into comparing the dimensions of service quality of Islamic and conventional banking institutions in the United Arab Emirates (UAE).

Methodology– A descriptive research design has been applied to the present study. The sample was selected using a stratified random sampling technique from banking customers of the UAE. Sample customers were surveyed through a self-administered questionnaire. 200 questionnaires were forwarded equally to each stratum (conventional banks and Islamic banks) via social media, out of which 162 questionnaires were considered fit for final analysis. Finally, the data were analyzed using an Independent Samples t-test.

Findings – The study has analyzed and compared the service quality perception of Islamic and conventional bank customers. The service quality perception analyses of both banks revealed that conventional bank customers possess better service quality perception compared to Islamic bank customers. Islamic banks need to provide better service quality as desired by customers. Banks should continue gaining customers’ trust and satisfaction. This can be achieved by showing concern for the security of transactions, delivering quality services, showing respect for customers through frontline staff, fulfilling commitments and performing to develop customers’ confidence toward the banks and its services. Islamic banks need to upgrade their physical facilities, such as employing modern equipment, convenient seating and waiting arrangements for customers, and better infrastructure to attract a larger segment of banking customers. Islamic banks can offer innovative products based on the market segmentation analysis to meet specific needs of customers e.g., education, health care, retirement benefits, etc.

Research limitations–Firstly, it is confined to banks located in the UAE only. Secondly, the number of selected banks can also be increased to get better results. Thirdly, principles of Islamic banking were ignored in the present study which can be included further to know the working of these banks.