A STUDY ON THE CORPORATE CUSTOMERS’ PERCEPTION TOWARDS ISLAMIC BANKS’ FINANCIAL PERFORMANCE, PRODUCT AND SERVICES IN COMPARISON WITH CONVEBTIONAL BANKS IN MALAYSIA
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ABSTRACT
Since 1983, Islamic banking system was established in Malaysia where it operates in accordance with the Islamic Shariah principles. However, the Islamic banking products are still not fully utilized by customers. This study used corporate customers as samples because they are the key players in the economy. The objective of this study is to access the usage of products and services of conventional banks and Islamic banks with demographic factors, to find out the corporate customers’ perception and knowledge of the potentials Islamic banking in Malaysia as well as to compare the market share between Islamic banks with commercials conventional banks. Furthermore, 100 questionnaires were distributed to respondents in Nilai and Kuala Lumpur. All the data gathered from the questionnaire survey were analysed by using SPSS version 11.0 and Microsoft Excel 2000. From the findings, the respondents’ usage rates in Islamic banking and Conventional banks are quite high for current account and fixed deposit. While the most important bank selection criteria was cost /benefits. The perception and knowledge of Islamic banking is still less among the corporate customers. The market share of Islamic banks is much lower than commercials conventional bank. The researcher found that there is no significant relationship between demographic characteristics (religion, race) and bank selection criteria (cost/benefit, service delivery, ease of access to account information). However, there is significant relationship between race and service delivery. On the other hand, there is significant relationship between demographic characteristic (religion, race) and the usage of Islamic bank and conventional bank facilities (current account, fixed deposits, bank guarantee). This finding would benefit Islamic banker as they able to understand corporate customers’ need and look for effective ways to content these needs. Finally, the researcher also recommends few ways for the improvement of Islamic banking and enhance the perception of corporate customers towards Islamic banking’ products and services.
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B. A. (Hons) In Finance
Number: 1