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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
Impact of customer demographics on bank selection criteria
JUNE 2011
VOL 3, NO 2
A study of banking sector of Okara, Punjab (Pakistan)
Hafiza Hafsa Nayyab, Abila Sehr, Muhammad Adnan, Zufishan Ali
Abstract
Pakistan is an Islamic country. There are six full pledge Islamic banks providing Islamic
services to their customers. The purpose of conducting research in Islamic banks of Okara
(Pakistan) is basically to examine the impact of demographical variables on bank selection
criteria in Islamic banking sector. We are aimed to observe that changes in demography
actually affect the bank selection criteria. We have used the regression analysis after
controlling the four demographic factors i.e. age, gender, occupation and income. We are
given the higher weights to those criteria which are mostly chosen. Our findings show that,
Islam is not the only reason to choose the Islamic banks, but some other factors which are
mostly selected by the customer. Those factors show their satisfaction level regarding the
criterion. Customers give high weight to those criterions, from which they are more
satisfied. The results of our study shows that customer mostly choose Islamic banks due to
convenience, because most of the customer choose this criteria as their first preference.
And the second preferred criterions are cost and benefit and corporal efficiency. Each
demographic factor has different criteria for Islamic bank’s selection.
Key words: Islamic banking, customer demography, and customer satisfaction.
Introduction:
In last decade of twentieth century Islamic banking sector was introduced, and now it is
flourished rapidly not only in Islamic country but in all over the world. Growth rate of
Islamic banking is 10-15% from 1995-2005. (M. Kabir Hassan June 2009).The assets of
global Islamic banking stood at US $700 at the end of 2005 it would grow to US $2.8
trillion at the end of 2015. (M. Kabir Hassan June 2009)
Islamic banking system is based on the Islamic laws and the principles regarding banking
and trade. Major point of differentiation in Islamic and conventional banking is that Islamic
banks operate on the principle of profit & loss sharing. Due to this principle a large number
of non Muslim customers are also adopting Islamic banking.
Another problem that Muslims were facing while dealing with conventional banking, was
provision of interest in transactions and loans. Islamic banking system removes this curse
from banking system and provides interest free dealings. As Quran says,
‘’O ye, who believe! Devour not usury doubling and quadrupling (The sum
lent). Observe your duty to Allah, that ye may be successful. (3:130)’’
COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 773