The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1759-0833.htm

JIMA
11,1 Nexus between customer
preference and operation of
conventional banks Islamic
50 windows in Pakistan
Received 26 March 2018 Malik Shahzad Shabbir
Revised 21 September 2018
30 January 2019
University of Lahore, Lahore, Pakistan
Accepted 7 February 2019

Abstract
Purpose – The purpose of this study is to investigate the nexus between preferences of customers toward
operations of Islamic windows from conventional banks. However, financial institution system of any country
has a dominant importance for its growth level. This study makes a comparative analysis and nexus among
Islamic windows of conventional banks, Islamic and conventional banks.
Design/methodology/approach – A well-designed questionnaire has been made and distributed among
three types of bank customers to get their perception and preference regarding services qualities and
operations from all three types of financial institutions. This study used statistical package of social sciences
software for data analysis.
Findings – The results revealed that customers from Islamic windows have serious dispute on its Shariah-
compliant regulation and fifty one per cent (51 per cent) of customer did not trust on the member of Shariah
board. The mid age of customers preferred the services of Islamic windows, as it has multi-dimensional
options for customers. Finally, customers from almost all three types prestigious that technology has found a
significant impact for better service qualities and found a positive change in customer behavior.
Originality/value – This study is a first ever attempt in its nature to investigate that the customer’s
preferences and different operations exist in three types of banking system in Pakistan. This study also helps
to policymakers regarding customer needs and wants to provide better services.
Keywords Customer satisfaction, Technology, Preference, Islamic education, Religious education,
Islamic windows
Paper type Research paper

Introduction
Islamic finance through its core principles advocates for the justice, fair and equitable
distribution of income and wealth during the production cycle and provides mechanisms for
redistribution to address any imbalances that may occur (Turner, 2015). According to
Global Financial Report (2016) Islamic finance has grown exponentially in the past two
decades, accumulating nearly $1.9tn in assets and spreading across 50 Muslim and non-
Muslim countries around the world. The functioning of the conventional banking system
may have been getting competition when the alternative Islamic banking system is
available Shahzad and Rehman (2015). It raises questions Islamic banking is a potential
competitor for conventional banking and sustainable penetration. It directed to explore
opinion, perception and knowledge of customers regarding banks as how different they are
Journal of Islamic Marketing from one another such as full-fledge Islamic banks, Islamic banking branches (IBBs) of
Vol. 11 No. 1, 2020
pp. 50-65
conventional banks and conventional banks.
© Emerald Publishing Limited
1759-0833
Metawa and Almossawi (1998) investigated banking behavior of customers of Islamic
DOI 10.1108/JIMA-03-2018-0063 bank and stated that the majority of their customers were well educated and the religious
factor was the motive behind the usage of Islamic banking services. It further revealed that Islamic
the customers of these banks were not satisfied with the financing schemes. This study also windows in
confirms findings of Erol and El-Bdour (1989) and Naser et al. (1999) that religion and bank
Pakistan
reputation were the most important factors for the selection of an Islamic bank.
Haque (2010) concluded that male respondents were more interested in Islamic banks as
compared to females in Malaysia. According to Warde (2000), Islamic banking fulfilled
needs and wants of customers and filled the gap that present in the conventional banking
system. Hence, it gave good reason to support the Islamic banking. He described the
51
attitudes of customers, which resulted in phenomenal growth in the ethical banking.
Moreover, they refused such banking that encouraged the socially harmful activities.
Shahid et al. (2012) found growth of determinants regarding Islamic retail banking in
Pakistan. They adopted quantitative methodology in their study, using three-fold approach.
In first method, growth of Islamic banks is compared with conventional banks through
financial statements key statistics for a period of recent three years; in second method, an
instrument is used through customers of Islamic retail banks and their perspective is
assessed; in third methodology, another instrument is used through bankers of Islamic retail
banks. The findings include good bank spread, customers’ perspective of good returns on
deposits and better services, part from religious cause of trend for Islamic retail bank; banks’
perspective of better Islamic alternate to retail banking needs.
Lutfullah et al. (2016) dissect the effect of Shariah compliance perception on customer
satisfaction, in Islamic banking sector of Pakistan. Primary data were gathered from 242
record holders of Islamic banks and IBBs of conventional banks and broke down by
relationship and relapse through self-regulated polls in light of SERVQUAL show. As a
cross sectional investigation with comfort inspecting confines generalizability, and since
budgetary advantages offered by banks were excluded as a variable, the extent of this
examination is constrained to benefit quality. Future research may concentrate on the
directing impact of Shariah compliance through longitudinal examination with bigger
specimen measure in a multi-social condition.
Kaleem and Abdul Wajid (2009) explored the possible application of Bai Salam contract
(forward sale agreement) as an alternative financial instrument in the agriculture sector of
Pakistan. A survey was conducted in four districts of the Punjab with a specifically
designed questionnaire. A convenient sampling technique was used to gather farmers’
concerns related to crops inputs, output and credit requirements. The empirical findings
conclude that agriculture income represents only up to 60 per cent of the income of an
average farm household. About 70 per cent of farmers participate in the credit market. They
need money to purchase crops inputs, to pay the labor and to hire rental machinery. Farmers
believe that they can save up to 25 per cent in costs if they purchase inputs on cash. The
survey also discloses that middlemen are the larger financers and buyers of crops in the
rural economy whereby only 10 per cent of transactions are conducted on a purely cash
basis. Farmers usually return the money after the sale of the crop.
The relationship between service quality and customer satisfaction is investigated by
number of researchers across the globe. It is concluded that there is strong association
between dimensions of service quality and overall customer satisfaction Anderson and
Sullivan (1993). It is also found that the banking industry has a link between service quality
and customer satisfaction Avkiran (1994). Islamic banking practices resulted into a notable
increase in the supply of loans. It is observed that government intervention played an
important role to manage funds besides other economic factors in the economy Makiyan
(2003).
JIMA We did not see any comprehensive study that adheres the nexus between customer
11,1 preference and Islamic windows operating in Pakistan. Shahzad Bukhari et al. (2013)
evaluated the practices of corporate governance between Islamic banks and Islamic
windows of conventional in the context of Pakistan. Whereas, the purpose of this study is to
investigate the importance of Islamic windows operation as compared to rest of both
systems of financial institutions working in Pakistan. The second objective of this study is
52 to examine, at what level customer preferred the services of Islamic windows. However, the
evaluation of corporate governance and customer preference are two different subjects with
multiple dimensions.

Literature review
Mohsin Butt and Aftab (2013) empirically examine the influence of consumer approach
towards Halal banking on e-service quality and e-satisfaction, in an online Islamic banking
context. The proposed model also aims to investigate the associations among e-service
quality, e-satisfaction, e-trust and e-loyalty. Questionnaire was considered to assemble data
from the regular users of online services of Islamic banks in Pakistan. Convenience
sampling method was adopted to collect data from the existing customers of six Islamic
banks, residing in five major urban areas of Pakistan. A total of 350 questionnaires were
distributed, out of which 292 returned questionnaires were suitable for further analysis.
Structural equation modeling procedure was used to test the proposed research model. The
results of this research suggest that attitude towards Halal banking positively influences
perceived e-service quality and overall e-satisfaction with the online services of Islamic
banks. Furthermore, perceived online service quality enhances customer e-satisfaction and
their e-loyalty towards the bank. Similarly, e-trust mediates the relationship between e-
satisfaction and e-loyalty. This study enhances our understanding of how specific religious
attitudes can positively influence consumer assessments of a bank’s perceived e-service
quality and their overall e-satisfaction with it.
Shehrish et al. (2011) examined the perceptions of corporate customers towards Islamic
banking products and services in Pakistan. The study discusses the three main parameters:
(1) the usage of conventional and Islamic banking facilities;
(2) respondents’ understanding of Islamic banking system; and
(3) their personal opinion on various aspects of Islamic banking products.

A total of 100 structured questionnaires are conducted. The response rate of the study is 60
per cent. The data are collected from corporate customers of six full-fledged commercial
banks of Pakistan. Results are interpreted on the basis of frequency distribution at this
stage. The results indicate that Islamic banking products and services had a good potential
within Pakistani corporate sector.
Mishkin (2001) reported that banking and financial services are the integral part of
services industry and its contribution is increasing with the passage of time. Jamal (2004)
investigated the customer behavior in retail banking by considering service quality and its
outcomes. It was observed that customers have varied experiences of satisfaction
and dissatisfaction for utilization of self-service technologies. However, expansion of global
and integrated banking sector has to face many challenges of legislation, technological and
structural changes Angur et al. (1999). Moreover, financial sector is becoming more
conscious about the performance evaluation regarding quality of products/services
according to customers’ expectations. In another study, findings reveal a positive correlation
between financial performance and customer service quality scores Duncan and Elliott Islamic
(2004). windows in
Evren (2003) found that advertising plays a significant role in banking and positively
affects the profitability of the bank. However, Haron et al. (1994) found that mass media
Pakistan
advertising has little impact on the customer’s bank selection. The reputation of a bank can
be measured by the bank’s size, where a larger bank corresponds to consider as better
reputation. A larger bank represents security and reliability, as a large bank must perform
well to maintain its size. Casalo et al. (2007) explained that a bank’s reputation is also 53
indicative of its trustworthiness. Khan et al. (2008) found that religious principle is the key
bank selection criteria in Islamic bank customers from Bangladesh.
Kaabachi and Obeid (2016) examined the relationship of main factors influencing the
adoption of Islamic banking services in Tunisia. They used descriptive statistical analysis
to determine the customer’s awareness about Islamic banking system. They used primary
data through self-administrative questionnaires in their study. The results revealed that
Islamic bank reputation, relative advantage of Islamic banking and its compatibility with
consumer religious beliefs, lifestyle, values, and banking habits influence positively the
intention to use it. It is also observed that lack of awareness found among customers of
Islamic banks. Lee and Ullah (2011) observed the motivation factors behind the attitude of
Islamic banking customers in Pakistan. They collected the data through questionnaire from
357 customers and designated the analysis in descriptive statistics and cross-tabulation
form. The result of this study reveals that the customers of Islamic banks highly value
toward Shariah compliance in their banks and noncompliance with Shariah principles leads
to disgruntled customers.
Evaluating dual banking system, Metwally (1996) by using the data from three Arab
countries – Kuwait, Saudi Arabia and Egypt – showed that there was no difference found in
costs and benefits of bank products and services. As regards comparison of conventional
and Islamic banks, Hegazy (1995) studied the demographic profiles of customers of
Egyptian banks. The results showed that religion was the main factor in the selection of
Islamic banks. It was also efficiency and quick service of Islamic banks that made it
different from conventional banks.
Haron et al. (1994) discussed differences in bank selection criteria of Muslims and non-
Muslims in Malaysia. The results concluded that religion was not the main factor for
selecting an Islamic bank. The customers would shift to other bank only if the quality of
services were better. Although both Muslims and non-Muslims had knowledge of Islamic
banking but few were unaware regarding financing methods used by the banks. Hamid and
Nordin (2001) indicated that many customers had knowledge of Islamic banking products
but they could not differentiate between Islamic and conventional products and services.
Okumus (2005) conducted research on customer satisfaction and bank selection criteria,
which analyzed awareness and degree of satisfaction of Islamic banks in Turkey. The religion
is found to be the most important factor for bank selection in this study. Eze et al. (2011)
conducted the study about Islamic retail banking services, awareness, perception and
preferences of urban and rural banking customers in Malaysia and revealed that there is lack of
awareness among customers about the Islamic retail banking. That led to keep that there is no
advantage in using Islamic retail banking as compared to conventional banking.
Shabbir et al. (2016) examined the role of Islamic leading organization for the promotion
of Islamic finance in western countries. This study involves the financial services and its
extension by Islamic banks should be strictly compatible with the guidance provided by the
Shariah. The financial services extended by Islamic banks are free from prohibitions like
interest, excessive uncertainty, gambling, speculation and business transactions subject to
JIMA risk of loss, legitimacy in ownership and exchange of true counter values. Shahzad and
11,1 Zaman (2016) explore and pinpoint some marketing strategies issues which can be helpful
for new investors and old stakeholders in the sector of Islamic financial institution in
Pakistan. This study portrayed the current situation for Islamic banking in Pakistan by
investigating the current competition of the industry using porter five forces model and
using PEST analysis at macro level (Figure 1).
54
Hypotheses of study

H1. Usage of banking services customers has significant impact on Islamic windows of
conventional banks.
H2. Customers’ perceptions regarding three different types of banking system have
significant impact on Islamic windows of conventional banks.
H3. Profit distribution system has significant impact on Islamic windows of
conventional banks.
H4. Bank selection has significant impact on Islamic windows of conventional banks.
H5. Customers’ satisfaction regarding services qualities has significant impact on
Islamic windows of conventional banks.
H6. Socio-economic factors have significant impact on Islamic windows of conventional
banks.

Figure 1.
Theoretical
framework
Methodology Islamic
The objective of this study is to investigate the perceptions regarding conventional banks, windows in
Islamic windows operating in Pakistan. However, after 2007-08 financial crises a stable
condition of Islamic financial institutions gave a new way of examining the importance and
Pakistan
adhere need of Islamic banks to entire capital market. This study developed a survey
questionnaire to get perceptions of different customers regarding operations of conventional
Islamic windows. This questionnaires consist of following inquiries such as, demographical
information, views about banking services, customer perceptions regarding three different
55
types of banks operated, at what extent, profit distribution is different of Islamic windows
and conventional banks, observations about services qualities, assessing the preference of
customers in bank selection, and socio-economic factors for example; religious education
and choice of banking business. Shabbir et al. (2015) adhered the primary data source to
examine the impact of Islamic finance and global financial stability, whereas, Shabbir and
Zaman (2016) persuasive different techniques of marketing strategies and its impact on
performance of financial institutions in Pakistan.
This study uses the primary data through a well-designed questionnaire and
distributed among customers of conventional bank Islamic window branches. However,
245 questionnaires were distributed among customers and 20 questionnaires were found
incomplete and dropped out from final analysis. However, the main focus of this study is
on convention bank branches of Islamic windows, so 145 fully questionnaires received
from the customers of Islamic window. While, 40 questionnaires were filled out from
both conventional bank and Islamic banks customers and sample reminds equal weight
for both conventional bank and Islamic bank customers. Furthermore, defendants
belong to alter age groups with regardless of gender, most of them have different
occupational and educational background. The structured questionnaire is used to
gather the particular information from target customers. Whereas, to avoid from
biasness, the sample of this study persisted un-weighted for gender perspective. Shabbir
et al. (2016) highlighted the importance of weighted average sample technique to identify
the exact position of primary data source. The data have been collected from two
different cities (Lahore and Sialkot) of Pakistan. Shabbir and Rahman (2015) concluded
that primary data gave the current facts and figures, which further assists to overcome
the particular problem in due time frame.

Data analysis
Purpose of using bank services
The reason to ask such questions to get information, whether the customers are using bank
services because of their own desire or they are obliged to use such services. Therefore,
following question was asked “For what purpose do you use services of this bank?” The
response of customers is summarized in the Table I.
The results show that the majority of customers of conventional banks and
standalone branches were using services of respective banks to receive their salary. In
conventional banks, 56 per cent customers use bank accounts for receiving their salary
and only 23 per cent customers use it for saving their money. This shows that
customers are not interested in banking services and they just want to receive their
salary. It may be possible for some customers that if the customers have the option of
receiving salary in cash, they would not open their account. There is another possibility
that they do not want to open saving accounts, as they feel it involves interest. In the
Islamic banking sector, 57 per cent customers want to avail the opportunities given by
JIMA the bank. The opportunity might be profit or remaining safe from interest and halal
11,1 investment (Figure 2).

Customers’ perception regarding three types of banks

Customers’ perception regarding three types of banks was asked to know whether
56 the customers feel any difference or they think these are same, if they feel any difference
what type of difference it is. Hence, the following questions were asked and the results are
also summarized in Table II.
Customers were asked about the difference between conventional banks, standalone
branches, conventional bank and Islamic bank, and Islamic bank and standalone branches.
Whereas, (48) per cent customers responded they did not feel any difference between
conventional bank and standalone branches. From Islamic banks, 20 per cent customers
replied there is no difference between Islamic banks and standalone branches. From
standalone branches, 23 per cent customers responded there is genuine difference between
conventional banks and standalone branches. From Islamic banks, 12 per cent customers
replied there was only difference of labeling between conventional banks and Islamic banks
and 40 per cent respondents from conventional banks thought there is only difference of
prices in conventional bank and Islamic bank.

For what purpose do you use services of this bank?

For availing
For saving/ Receiving money Employer opened opportunities given
Type of bank Lockers (%) from abroad (%) the account (%) by your bank (%) Any other (%)

Conventional
bank 23 12 56 26 4
Table I.
Islamic bank 25 18 4 57 10
Purpose of using Islamic
bank services windows 22 14 60 0 14

Figure 2.
Purpose of using
bank services
 Genuine difference with respect to
Difference of method but methodology and Shariah Difference of
No difference Difference of labeling only not with respect to Shariah compliance prices only
SAB SAB SAB SAB SAB
Questions CB (%) IB (%) (%) CB (%) IB (%) (%) CB (%) IB (%) (%) CB (%) IB (%) (%) CB (%) IB (%) (%)

Do you feel any difference 1 6 48 2 2 4 21 1 4 2 30 23 4 57 15

between CB and SAB?
Do you feel any difference 8 4 2 12 15 22 12 17 15 28 51 50 40 5 2
between CB and IB?
Do you feel any difference 18 11 20 18 44 29 12 17 9 18 15 32 3 7 3
between IB and SAB?

types of banks
Customers’
windows in
Islamic

difference in three
perception about
57

Table II.
Pakistan
JIMA Concern of customers about profit distribution by the bank
11,1 This question is very important to check whether the customer is concerned with the
profit of bank or they do not care whether the bank distributes the profit. Hence, the
customer was asked, “Would you continue dealing with this bank even in case the bank
does not distribute any profit for 3 consecutive years?” and the results are summarized
in Table III.
58 In the conventional banks, most of the customers had bank accounts for salary
purpose, so they did not care if the bank would not distribute profit for a long time;
however, 28 per cent customers who were concerned with the profit of bank and 12 per
cent people did not know what they would do if the bank will stop giving profit. The
loyalty of Islamic banks’ customers is higher than conventional bank customers
(Figure 3).

Assessing customer satisfaction about service quality of bank

This section was added to check the level of customers’ satisfaction with their bank. It
is important to check the customers’ satisfaction from the services their bank provides.
In this respect, it can be analyzed which type of bank has more satisfied customers
(Table IV).
Most of the customers are satisfied with the transaction of their bank; however,
the Islamic bank customers are more satisfied with the transactions of Islamic banks.
Moreover, Islamic bank customers are not satisfied with the ATM service as there are less
ATMs of Islamic banks.

Would you continue dealing with this bank even in case the bank does not distribute any
profit for 3 consecutive years?
Table III.
Type of bank Yes (%) No (%) Don't know (%)
Concern of customers
about profit Conventional bank 48 27 23
distribution by the Islamic bank 68 20 10
bank SAB 47 40 12

Figure 3.
Assessing concern of
customers
 Very much satisfied Satisfied Neutral Not satisfied Very much dissatisfied
Questions CB IB SAB CB IB SAB CB IB SAB CB IB SAB CB IB SAB

How would you rate your

level of satisfaction with
this bank during your
transactions? 28 42 41 38 35 32 28 18 20 2 3 2 2 1 1
Technology associated
with your service is
visually appealing at your
bank? 10 26 15 38 48 35 46 23 49 3 1 0 1 0 0
When you have a
problem, your bank
shows a sincere interest in
solving it? 18 12 20 40 40 50 31 15 18 6 0 5 3 0 2
Your bank gives clear
guidance and information
about usage of services
and facilities? 17 22 22 44 41 42 25 29 22 10 4 10 2 2 1
ATM of your bank is
located at a convenient
place? 28 32 35 49 6 47 11 7 9 8 47 5 2 0 0

service quality of
Table IV.
windows in
Islamic

bank
satisfaction about
Assessing customer
59
Pakistan
JIMA Assessing the preference of customers in selection of bank type
11,1 To assess the trust of customers on the banks whether they trust on standalone
branches or they will not prefer these on Islamic banks. Therefore, following question
was asked “If you will be given a choice between a full fledge Islamic bank and
standalone Islamic branch, would you prefer standalone branch?” and the results are
summarized in Table V.
60 When the customers were asked about the choice between Islamic banks and standalone
branch, 41 per cent replied they will prefer only if they trust Shariah board members, 30 per
cent replied that they will prefer if the services are better than Islamic banks, 6 per cent
replied never prefer and 9 per cent replied why not. This shows that 9 per cent customers
had full trust on these banks, and 6 per cent did not trust even if these banks provide better
services (Figure 4).

Relationship between socio-economic profiles of customers and bank choice

In this section, the relationship of bank choice with socio-economic profiles of customers
is assessed. These factors include relationship of bank choice with age, religious
education and business type. These factors were analyzed to get the better idea of what
type of customers are interested in Islamic banking and what is the role of their
organizations in this matter.

Age and bank choice

Age is a very important factor for making decision and selecting others important things.
The relationship of age with the bank choice is important because by comparing this it can

If you will be given a choice between a full fledge Islamic bank and standalone Islamic
branch, would you prefer SAB?
Why not Yes, only if its services are Yes, only if I trust in members
Table V. Type of bank (%) better than Islamic banks (%) of Shariah board (%) Never (%)
Assessing the
preference of Conventional
bank 14 22 31 6
customers in
Islamic bank 5 35 42 11
selection of bank SAB 7 35 51 2
type Total 9 30 41 6

Figure 4.
Assessing the
preference of
customers about
bank selection
be analyzed easily that what age group prefers by which bank. The results for relationship Islamic
of age and bank choice are summarized in Table VI. windows in
While analyzing the effect of age on bank choice, we can see that as the age of
customers is increasing their number is also increasing, but in case of Islamic banks,
Pakistan
mostly young customers belong from the age of 18-25. The customers from the age of
26-40 are interested in standalone branches, the reason for this might be their interest in
Islamic banking but they have some fear about Islamic banks as these are establishing.
It may be another reason that these customers have their accounts in conventional 61
banks as these banks have opened their Islamic branches these customers have shifted
their accounts in those branches (Figure 5).

Bank type and religious education

Religious education is another important factor for bank selection. By analyzing this
relationship, it can be assessed that religious community prefers Islamic banking or not
as Muslims have faith that interest is haram. In this case, customers having religious
education should adopt Islamic banking. Is this the case or reverse; the results are
summarized in Table VII.

Age and bank choice

Type of bank 18-25 (%) 26-40 (%) 41-50 (%) 51-60 (%) Above 60 (%) Total

Conventional 11 65 13 8 3 40
Islamic 15 55 15 11 4 40 Table VI.
Islamic Windows 10 73 12 2 3 145 Age and bank choice

Figure 5.
Assessing
relationship of age
and bank choice

Relationship of bank type and religious education

Type of bank Amma (%) Khassa (%) Aliyah (%) Almiya (%) Fazilarbi (%)

Conventional 33 66 0 50 33 Table VII.

Islamic Bank 66 33 66 50 0 Bank type and
Standalone 0 0 33 0 33 religious education
JIMA This table shows that in case of conventional banks, as the religious education of customers
11,1 is increasing, the number is also increasing, but those who have higher degree, they prefer it
less than the customers who do not have higher degree. In case of Islamic banks, when the
education is increasing their ratio is decreasing (Figure 6).

62 Bank choice and type of business

The bank selection and type of bank and relationship of bank type and type of business are
analyzed and the results are summarized in Table VIII.
The results show that most of the Islamic bank customers have their own business, whereas
the conventional bank customers have their employee accounts in their banks. Mostly students
prefer Islamic banks and the employers prefer conventional banks (Figure 7).

Figure 6.
Assessing
relationship of
Islamic education and
bank choice

Relationship of bank choice and type of business

Type of bank Government employee (%) Own business (%) Private job (%) Student (%)
Table VIII. Conventional 45 33 30 28
Bank choice and type Islamic 22 42 32 40
of business Standalone 32 24 37 31

Figure 7.
Assessing
relationship of type of
business and bank
choice
Conclusion Islamic
Financial institutions play a crucial role in the development of any nation. The backup value windows in
of total assets is the strength of financial institutions. However, the purpose of this study is
to investigate the importance and customer’s preference regarding operations of Islamic
Pakistan
windows of convention banks. The composite results revealed with these remarks that five
hypothesis out of six have accepted the alternative hypothesis, which means that this study
rejected the null hypothesis. The only one null hypothesis is accepted, which stated that
customers feel Shariah-compliant issues in operations of Islamic windows of conventional 63
banks. The observation of nominal customers is that conventional banks just change the
label and represent in the market as Islamic windows to capture more customers with their
capital. As far concern bank account opening, the customers have different views about it,
such (57 per cent) of Islamic banking customers open their account according to their own
will, while (56 per cent) and (60 per cent) customers reported that their employer open their
accounts in conventional and Islamic windows branches. One of core reason behind this
high percentage is that almost all government employees at federal and province level took
their salary from government financial institutions.
Moreover, customers from Islamic banks show more reliability in profit distribution of
the banks with (68 per cent) as compared to conventional (48 per cent) and Islamic windows
branches (47 per cent). Furthermore, almost all customers of three banks prestigious agree
that technology has a significant impact to provide better service qualities. One of the
alarming questions still creates barriers for Islamic windows of conventional banks that
customers are not fully trusted on Shariah board of Islamic windows. The age between
(26-40) years of customers preferred Islamic windows services with (73 per cent). The
customers, who have religious education background did not prefer the services of Islamic
windows as they also have issue of Shariah-compliant and Shariah board members.
However, the results of religious education customers show a significant preference with 66
per cent toward full fledge Islamic banks.

References
Anderson, E.W. and Sullivan, M.W. (1993), “The antecedents and consequences of customer
satisfaction for firms”, Marketing Science, Vol. 12 No. 2, pp. 125-143.
Angur, M., Nataraajan, R. and Jahera, J.S. (1999), “Service quality in the banking industry: an
assessment in a developing economy”, International Journal of Bank Marketing, Vol. 17,
pp. 16-25.
Avkiran, N.K. (1994), “Developing an instrument to measure customer service quality in branch
banking”, The International Journal of Bank Marketing, Vol. 12, pp. 10-18.
Casalo, L.V., Flavian, C. and Guinaliu, M. (2007), “The role of security, privacy, usability and reputation
in the development of online banking”, Online Information Review, Vol. 31 No. 5, pp. 583-603.
Duncan, E. and Elliott, G. (2004), “Efficiency, customer service and financial performance among
Australian financial institutions”, International Journal of Bank Marketing, Vol. 22 No. 5,
pp. 319-342.
Erol, C. and El-Bdour, R. (1989), “Attitudes, behaviour, and patronage factors of bank customers
towards Islamic banks”, International Journal of Bank Marketing, Vol. 7 No. 6, pp. 31-37.
Evren, O. (2003), “The role of advertising in commercial banking”, CEPR Discussion Paper, pp. 27-29.
Eze, U.C., Thambiah, S., Santhapparaj, A.J. and Arumugam, K. (2011), “Customers’ perception on
Islamic retail banking:a comparative analysis between theUrban and rural regions of Malaysia”,
International Journal of Business and Management, Vol. 6 No. 1, pp. 187-198.
Global Financial Report (2016), “Islamic banking department”, World Bank publisher.
JIMA Hamid, A. and Nordin, N. (2001), “A study on Islamic banking education and strategy for the new
millennium-Malaysian experience”, International Journal of Islamic Financial Services, Vol. 2
11,1 No. 4, pp. 3-11.
Haque, A. (2010), “Islamic banking in Malaysia: a study of attitudinal differences of Malaysian
customers”, European Journal of Economics, Finance and Administrative Sciences, pp. 7-18.
Haron, S., Ahmad, N. and Planisek, S. (1994), “Bank patronage factors of Muslim and Non-Muslim
customers”, International Journal of Bank Marketing, Vol. 12 No. 1, pp. 32-40.
64
Hegazy, I.A. (1995), “An empirical comparative study between Islamic and commercial banks
‘selection criteria in Egypt”, International Journal of Commerce and Management, Vol. 5
No. 3, pp. 46-61.
Jamal, A. (2004), “Retail banking and customer behaviour: a study of self concept, satisfaction and
technology usage”, The International Review of Retail, Distribution and Consumer Research,
Vol. 14 No. 3, pp. 357-379.
Kaabachi, S. and Obeid, H. (2016), “Determinants of Islamic banking adoption in Tunisia: empirical
analysis”, International Journal of Bank Marketing, Vol. 34 No. 7, pp. 1069-1091.
Kaleem, A. and Abdul Wajid, R. (2009), “Application of Islamic banking instrument (bai salam) for
agriculture financing in Pakistan”, British Food Journal, Vol. 111 No. 3, pp. 275-292, available at:
https://doi.org/10.1108/00070700910941471
Khan, M.S.N., Hassan, M.K. and Shahid, A.I. (2008), “Banking behavior of Islamic bank customer in
Bangladesh”, Journal of Islamic Economics, Banking and Finance, pp. 159-194.
Lee, K.H. and Ullah, S. (2011), “Customers’ attitude toward Islamic banking in Pakistan”, International
Journal of Islamic and Middle Eastern Finance and Management, Vol. 4 No. 2, pp. 131-145.
Lutfullah, S., Aitisam, M., Aliya, F. and Zafar, M. (2016), “Customer perception regarding sharia’h
compliance of Islamic banking sector of Pakistan”, Journal of Islamic Accounting and Business
Research, Vol. 7 No. 4.
Makiyan, N.S. (2003), “Role of rate of return on loans in the Islamic banking system of Iran”,
Managerial Finance, Vol. 29 No. 7, pp. 62-69.
Metawa, S.A. and Almossawi, M. (1998), “Banking behavior of Islamic bank customers: perspectives
and implications”, International Journal of Bank Marketing, Vol. 16 No. 7, pp. 299-313.
Metwally, M. (1996), “Attitudes of Muslims towards Islamic banks in a Dual-Banking system”,
American Journal of Islamic Finance, Vol. 6, pp. 11-17.
Mishkin, F.S. (2001), The Economics of Money, Banking Financial Markets, 6th ed., Addison-Wesley,
Reading, MA.
Mohsin Butt, M. and Aftab, M. (2013), “Incorporating attitude towards halal banking in an integrated
service quality, satisfaction, trust and loyalty model in online Islamic banking context”,
International Journal of Bank Marketing, Vol. 31 No. 1, pp. 6-23. available at: https://doi.org/
10.1108/02652321311292029
Naser, K., Jamal, A. and Al-Khatib, K. (1999), “Islamic banking: a study of customer satisfaction and
preferences in Jordan”, International Journal of Bank Marketing, Vol. 17 No. 3, pp. 135-151.
Okumus, H. (2005), “Interest-free banking in Turkey: a study of customer satisfaction and bank
selection criteria”, Journal of Economic Cooperation, Vol. 26 No. 4, pp. 51-86.
Shabbir, M.S. and Zaman, S. (2016), “Marketing strategic of financial services by Islamic banks”, Global
Journal of Business Management, Vol. 3 No. 2, pp. 40-51.
Shabbir, M.S., Ghazi, M.S. and Akhtar, T. (2015), “The viability of Islamic finance and its impact on
global financial stability: Evidence from practical implications”, European Journal of Economics,
Finance and Administrative Sciences, Vol. 3 No. 2, pp. 1-11.
Shabbir, M.S., Rehman, A.K. and Akhtar, T. (2016), “The role of Islamic leading organizations for the Islamic
promotion of Islamic finance in Western countries”, The Journal of Internet Banking and
Commerce, Vol. 2 No. 1. windows in
Shahzad, M. and Rehman, A. (2015), “Barriers to service quality in the banks of Pakistan: a comparative Pakistan
study of Islamic and conventional banks”, Business and Economics Journal, Vol. 6 No. 4, pp. 178.
Shahzad Bukhari, K., Awan, H.M. and Ahmed, F. (2013), “An evaluation of corporate governance
practices of Islamic banks versus Islamic bank windows of conventional banks: a case of
Pakistan”, Management Research Review, Vol. 36 No. 4, pp. 400-416, available at: https://doi.org/ 65
10.1108/01409171311315003
Turner, A. (2015), Between Debt and the Devil: Money, Credit, and Fixing Global Finance, Princeton
University Press, Princeton, NJ.
Warde, I. (2000), Islamic Finance in the Global Economy, Edinburgh University Press, Edinburgh.

Further reading
Atif, M.A. and Sufi, (2014), House of Debt, How They (and You) Caused the Great Recession, and How
We Can Prevent It from Happening Again, University of Chicago Press, Chicago, IL.
Ghauri, S.M.K., Javaid, K. and Ramzan, M. (2012), “Determinants of growth of Islamic retail bank in
Pakistan”, International Journal of Business and Social Research, Vol. 2 No. 7, pp. 70-84.
Islamic Banking Department (2016), available at: www.sbp.org.pk/departments/ibd.htm
Islamic Banking Department (2007), Pakistan’s Islamic Banking Review 2003 - 2007, State Bank of
Pakistan.
Rustam, S., Bibi, S., Zaman, K., Rustam, A. and Haq, Z.U. (2011), “Perceptions of corporate customers
towards Islamic banking products and services in Pakistan”, The Romanian Economic Journal,
Vol. 41, pp. 107-123.
State Bank of Pakistan (2015), “Islamic banking department”, Islamic Banking Bulletin, pp. 1-22.

Corresponding author
Malik Shahzad Shabbir can be contacted at: [email protected]

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: [email protected]