Factor Influencing Customer’s Perception Towards Islamic Banking and Finance (IBF) Among Islamic Banking and Finance Program (SAB) Students in Universiti Malaysia Kelantan (UMK)

Abstract

The Islamic Banking and Financial System is one activity that complies with Shariah or the laws allowed in Islam. However, positive or negative perceptions, especially from customers, play an essential role in determining the establishment of Islamic banking and finance. Therefore, this study was conducted to examine the factors that influence customer’s perceptions towards Islamic Banking and Finance (IBF) among Islamic Banking and Finance program (SAB) students in University Malaysia Kelantan (UMK). The study found that the factors influencing customer’s perception of IBF are social, religiosity, perceived risk, and perceived image. The approach used for this study is based on a quantitative method consisting of a questionnaire given online through Google forms to the respondents. This study’s results show a positive relationship between social influence (0.796, p=0.000), religiosity (0.694, p=0.000), perceived risk (0.716, p=0.000), and perceived image (0.716, p=0.000) with customer’s perception towards IBF among SAB students in UMK. This study adds to the body of knowledge in Islamic banking while imparting organizational knowledge through its suggestions. With an increased understanding of the factors influencing customer perceptions of products provided by IBF institutions, banks can introduce and sell their products more effectively to customers and increase their market share. It implies that Islamic banking executives should take all necessary measures to adopt marketing strategies and other initiatives to ensure that all clients of Islamic banks have the greatest possible awareness, comprehension, and favorable perception of the products and services provided by Islamic banking.