Wednesday, January 1, 2020

Knowledge And Understanding Towards Islamic Banking Finance Essay - Free Essay Example

Sample details Pages: 4 Words: 1120 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? As in our general knowledge, Islamic banking has become one of the most popular banking systems nowadays. It was claimed that today the global Islamic banking industry is worth more than USD 1 trillion in asset terms and experiencing a growth rate of 10 to 15% per annum (Fenton, 2009; Sole, 2007). It has emerged as one of the fastest growing industries. Don’t waste time! Our writers will create an original "Knowledge And Understanding Towards Islamic Banking Finance Essay" essay for you Create order Islamic banking also has spread all over the world with wide acceptance received by both Muslims and non-Muslims (Dusuki Abdullah, 2007). Until September 2012, Malaysia has sixteen Islamic banks which comprise nine local Islamic banks and seven foreign Islamic banks, six international Islamic banks and fifteen participating banks in Islamic banking scheme includes Development Financial Institutions (DFIs), Investment banks and commercial banks that offering Islamic banking services (Bank Negara Malaysia, 2012). Since that, the emergence of Islamic banks must have something special to relate with perception and perspective among Malaysian and the speciality of Islamic banks itself. Problem statement Changes in the Malaysian financial landscape and the introduction of Islamic banking has generated new dimension and phenomenal in banking sector. Such scenario had also led to the changes in the customers taste and demand for better and high quality banking services. This research was conducted to find out what is the perception of consumers toward Islamic banks. Research question 1) What is the perception of consumers toward Islamic banks? 2) What do you understand about Islamic banking products? 3) Do you accept Islamic banking? And if you do, what influence your acceptance? Research objective To investigate the perception of consumers toward Islamic bank. To find out the knowledge and understanding of Malaysians towards Islamic banking. To recognize the factors influencing the decision to choose Islamic banking. Theoretical framework Knowledge and understanding Perception of consumers towards Islamic banking Factors influencing the decision to choose Islamic banking Scope of study This study focuses on the perception of consumers towards Islamic banking. We will be conducting our studies on both muslim and non-muslim in Malaysia with different ethnic background. Unfortunately it will be impossible for us to do the study on the entire Malaysia so we have limited our study only in Shah Alam. Significant of study This study will be a significant endeavor in promoting Islamic banking and give information about the level of awareness that Malaysian have in relation to the culture of Islamic banking, the attitude of Malaysian towards Islamic banking and factors for bank selection criteria by Malaysian. This study is important because these findings will be beneficial to a variety of parties including Islamic banking provider, regulators, employees of the Islamic banks, and customer and encourage them to look into the current problems and challenges. To staff of Islamic banking; there is a need of an experienced and Shariah knowledgeable staff at an early stage, especially in the development stage. Moreover, Islamic banking staff lack training and there is a need for Islamic banks and BNM to explore the setup of an Islamic Training Centre for bank related staff. Customer awareness: To help the Islamic banking providers to understand customer behavior and the criteria in the bank selection process. The customers choose Islamic banking not only because of religious based decisions but more because of service quality and convenience. Islamic bankers need to increase their service quality and image. Limitation of study There are several limitations in doing this study. Firstly, the research is to investigate the perception of Malaysians towards Islamic banking. So the result that we get may not be the most accurate result because it is impossible to do the study sample of all Malaysian. It is because the perspective of these respondents does not mean that it is the same with the remaining population. Secondly, the different backgrounds of Malaysian in different research will show a different result. This will make it hard to be analyzed. The other limitation along the research is time constraints. Each student in our group has different time and life schedule and these constraints make it hard for us to hold discussions in order to complete this proposal. Literature Review Knowledge and understanding towards Islamic banking Perception is the act of discerning, realizing, and becoming aware of through the senses (Albrecht, 2003). Mokhlis, Hazimah., Salleh (2008) has also found that pricing and convenience were the main reasons for selecting a new bank or switching banks. Maryland. Gerrad and Cunningham (1997) also found that profit or interest rate served as a reason for people maintaining their relationship with Islamic banks. Rashid et al. (2008) said higher demand of Islamic banking products and services requires existence of superior quality in service, efficiency in system, strict compliance to Islamic Shari`ah and satisfactory community service through job creation and ensuring consistency in service provisions. Other than that majority of consumer perceived religion and economics as the patronage factors in Islamic Bank selection by customers. Ahmad, 2000; Iqbal and Molyneux,2005) said Islamic banking is constructed upon the principle of br otherhood and cooperation, which stands for a system of equity sharing, risk sharing and stake taking. It promotes such sharing and cooperation between the provider of funds (investor) and the user of funds (entrepreneur). Research by Ahmad and Haron (2002) for instance, shows that the majority emphasize religious as well as other factors like cost/benefit, service delivery, reputation and location in patronizing Islamic banks. influencing decision towards accepting Islamic banks The customer perception is often identified by their level of satisfaction towards particular products or services. Erol and El-Bdour (1989) said the most important criteria by customers while selecting Islamic Banks were the provision of fast and efficient services, banks reputation and image, and confidentiality. Haron et al. (1994) have found out three important criteria perceived by Muslims in selecting Islamic banks which is provision of fast and efficient service, the speed of transaction, and t he friendly bank personnel. There are also other factors influencing consumers perception towards choosing banks. Gerrerd and Cunningham (1997) considered parking space and interior facilities as important issues related to customer satisfaction. Naser et al. (1999) said among the most important service features used to measure customer satisfaction are convenience, competitiveness and location of service provider. Investigating services used and factors considered important in bank selection on 140 Canadian households, Laroche et al. (1986) found that friendliness of staff was the primary choice determinant followed by hours of operations, size of waiting lines, convenience of location, efficiency of personnel, speed of processing items, parking facilities and accessibility, availability of credit, bilingualism of staff, and interest on savings. In addition, it was found that convenience of location to college and parental advice and influence were the predominant factors having a bearing on students choice of bank said by Lewis (1982). Research methodology Data collection Sampling frame Variables and measurement Research instrument Data analysis (descriptive study) (hypothesis study)

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