CHAPTER 1

INTRODUCTION
This chapter consists of the background of research, problem statement,
research objectives, research questions, the significance of research, the limitations of
research and

definition of terms.

1.1 The Research Background

Recent interest in Islamic banking and finance in the Malaysia is consistent
with the growing popularity of this type of banking in other Islam countries. At
Malaysia Bank Negara Malaysia fully support the Islamic banking system that
makes most all the conventional banks have their own Islamic subsidiaries
banking system. Nowadays, most of the Muslim who aware about this, take an
action to follow the shariah to manage their financial. Furthermore Allah condemn
Muslim who taking riba in their daily transaction. As Allah stated in the Quran
Surah Al-Baqarah (2:275) Allah permitted trade and prohibit riba. So as a Muslim
they should avoid to take riba in their financial transaction. As Islamic banking
are still booming at Malaysia, some of people have on opinion the Islamic
banking is expensive than conventional banking. This is why the turn to take the
cheaper one besides it give more profit to them. Service quality of service plays
an important role in attracting and retaining customers. This has been recognised
as a strategic requirement in highly competitive business environments
(Parasuraman et al., 1985; Zeithmal et al., 1990). According to Parasuraman et al.
(1985), service quality can be defined as the difference between customers
expectations for the performance of a service before the service is rendered and
their perceptions on the service received.
In Malaysia, Islamic banking services are a key contributing factor to
increasing the national gross domestic product. Today, Islamic banking and
finance has emerged as an important component of the overall Malaysian
financial system that contributes to the growth and development of the Malaysian
economy. Since 2000, the domestic Islamic banking industry has been growing at
a staggering average rate of 18 per cent per annum in terms of assets. It was the
aspiration of the Malaysian Government to have a strong Islamic banking industry
capturing 20 per cent of market shares of financing and deposits in the Malaysian
financial industry by 2010. The latest figure of market shares for Islamic deposits
andfinancingstoodat11.7and12.1percentoftheindustrystotal,respectively.

In this regard, the ability of the Islamic banking industry to capture a significant
market share in a rapidly evolving and challenging financial environment,
particularly in a dual-banking system like Malaysia, is dependent on the strategic
positioning of its players to maintain their competitive edge and offer services and
products that satisfy the needs of their customers, Rafikul (2015).
Researchers have identified service quality and customer satisfaction, as a
means to achieve profitability and survival. Well known studies and the first
systematic attempts to measure service quality were made by Parasuraman et al.
(1985, 1988, 1990, 1991, 1993, and 1994). Through qualitative researches, they
designed a two-scale instrument called SERVQUAL, constructed of a set of five
dimensions, which were consistently ranked by customers to be most important
for service quality. SERVQUAL was mainly, used in North America, Australia,
Hong Kong and Singapore and has been applied to a wide range of service
industries, including financial services. But for Islamic, the CARTER model was
the first to be developed (Othman, 2003) for the Islamic banking industry.
CARTER has six dimensions constructed of SERVQUAL and a new dimension
called compliance with Islamic law. Othman (2003) called for researchers to
examinethemodelsvalidityandtomeasureoverallservicequalitylevelsinthe
Islamic banking industry in different locations.
Shafie et al. (2004) and Ciptono and Soviyanti (2007) adopted the CARTER
model in their studies on Islamic banks in other Muslim countries with different
customer backgrounds and behaviour. Those studies identified Sharia compliance
to be the most important dimension for Muslim people. Therefore, this study
want to know about the customers satisfaction on the service quality that offered
by Islamic bank in Malaysia.

1.2 Problem Statement

Islamic banking is now a big industry worldwide. However, the service quality
that offered by Islamic bank are still lacking in Malaysia because different
customers place different value on the attributes of service they received. Ros
(2013)statedthatthecustomersawarenessandknowledgeaboutIslamicbanking
products and services are still low. According Abdulrahim (2010), responsiveness

is the most important dimension and followed by credibility for the Islamic
banking services. He argued that for a service quality model of Islamic bank such
as tangible would not be such a concern for the customers, as they would be taken
for granted.
Therefore, in order to increase the service quality of Islamic bank, the
management of the bank should take a concern about customer satisfaction
regarding of the services quality that bank provided. In addition, from the propose
solution, the management of the bank can take reasonable action to improve their
services in order to increase the level of customer satisfaction. In order to retain
the customers, the Islamic banks do need to meet customer needs and expectation.
In a nutshell, the aim of the study is to investigate the relationship of service
quality and customers satisfaction of Islamic bank in Malaysia.

1.3 Research Objective

RO1: To identify the highest mean among the service quality dimensions.
RO2: To examine the relationship between service quality and customer
satisfaction.

1.4 Research Question

RQ1: Which dimension is the highest mean among the service quality?
RQ2: What is the relationship between responsiveness and customer satisfaction?
RQ3: What is the relationship between empathy and customer satisfaction?
RQ4: What is the relationship between Islamic tangible and customer satisfaction?
RQ5: What is the relationship between accessibility and customer satisfaction?
RQ6: What is the relationship between reputation and customer satisfaction?

1.5The Significant of Research

This study is important because from this study we can know about the
weaknesses of the service quality offered by Islamic bank in Malaysia. Customer
plays the important role to Islamic bank in order to know what are lacking in their
services. In the questionnaire the customers have to choose the items according to
their dimensions and rate the services according to their experience. Because of
the lack of research in the Islamic banking industry in general and its service
quality in particular, it is important to develop service quality scales. Therefore the

important is, first for Islamic bank managers, because managers should be aware
of the most important items and dimensions to improve the ways of providing
good service to their customers, and achievingcustomerssatisfaction.Thisiswill
enable Islamic banks to work more effectively in response to their customers
needs. Secondly, this study is important to academics and researchers in service
quality, as it provides further empirical evidence on the determinants of service
quality.

1.6 The Limitation of Research

The study involve Islamic banking and finance students from Semester 3 until
Semester 5 at UiTM Puncak Alam.

1.7Definition of Terms
1.7.1

Service Quality
Service quality has been defined as a degree and direction between
customer service expectations and perceptions (Newman, 2001).

1.7.2

Customer Satisfaction
Literature establishes that customer satisfaction is a key to long term
business success (Zeithami et al.,1996).To protect/gain market shares,
organizations need to outperform competitors by offering high quality product
or service to ensure satisfaction of customers (Tsoukatos and Rand,2006).

1.7.3

Responsiveness
Identified in the Oxford dictionary as the quality of being responsive;
reacting quickly; as a quality of people, it involves responding with emotion to
people and events. Authors identified responsiveness in terms of staff being
willing to help the customers and provide prompt service; it is communicated
to customers by the length of time they have to wait for assistance, answers to
questions, or attention to problems. In addition, Othmans study (2003)
identifiedresponsivenessasknowledgeofcustomersbusinessorwillingness
to help, the way staff members treat their customers, and fast counter service.

1.7.4

Empathy
Parasuraman et al. (1985) defined empathy as the caring and individual
attention the firm provides its customers. It involves giving customers
individual attention and employees who understand the needs of their
customers and convenience business hours. Ananthet al. (2011) referred to
empathy in their study on private sector banks as giving individual attention;
convenient operating hours; giving personal attention; best interest in heart and
understandcustomersspecificneeds.

1.7.5

Islamic Tangible
Researchers such as Parasurman et al., 1988, 1991, Zeithaml and Bitner
2000, 2003 and Jabnoun and Al Tamimi. 2003 defined tangible as the
appearance of physical facilities, equipment, personnel, and communication
materials. Othman (2003) included among the tangibles the external
appearance, such as the opening hours of operations.

1.7.6

Accessibility
To the ease of access to services and their timely delivery (Parasurman
et al., 1994). Also, approachability and easy of contact are relevant.

1.7.7

Reputation
Identified in terms of the image and reputation that enable a bank to
proactively define itself for its customers (physical /external reputation).

CHAPTER 2
LITERATURE REVIEW AND CONCEPTUAL
FRAMEWORK

This chapter will give an overview of literature and model to the research
problem presented in previous chapter. In this chapter we will introduce the
conceptual framework of customer satisfaction and service quality with the dimension
of responsiveness, empathy, Islamic tangible, accessibility and reputation. Moreover,
this chapter will present some information relate to the research such as the conceptual
real time customer service in order to give the clear idea on this research about.

2.1 LITERATURE REVIEW

2.1.1 Dependent Variables
In the banking industry, a key element of customer satisfaction is the nature of
the relationship between the customer and the provider of the products and services.
Thus, both product and service quality are commonly noted as a critical prerequisite
for satisfying and retaining valued customers (Muslim and Isa, 2005). It is indeed true
that delivery of high-service quality to customers offers firms an opportunity to
differentiate themselves in competitive markets (Karatepe et al., 2005). Furthermore,
according to Husniyati (2009), Reliability (mean 5.05) is perceived as the most
important attributes in choosing the Islamic Financial Institutions (IFIs), followed by
Assurances

and

Tangibles.

The

least

important

attributes

are

Empathy,

Responsiveness and Compliance, respectively. In addition, the result from test

statistics revealed that Reliability was ranked second, Tangibles was ranked third,
Responsiveness was ranked fourth, Assurance was ranked fifth and finally, Empathy
was ranked the least important attribute (Anizah, 2009).

2.1.2 Independent variable

2.1.2.1 Service Quality
Nowadays, service quality has become one of the important determinants in
measuring the success of industries. Marketers agree that service quality has truly
presented a significant influence on customers to distinguish competing organizations
and contribute effectively to customer satisfaction (Parasuraman, Zeithaml, and Berry,
1985; Mersha, 1992; Avkiran, 1994; Marshal and Murdoch, 2001). Service quality has
a vast definition; however an all-embracing definition of this concept and the most
recognized definition of this concept proposed by researchers revolves around the idea
that it is the result of the comparison that customers make between their expectations

about a service and their perception of the service performance (Lehtinen, 1982;
Zeithmal, 1988; Gronroos, 1988; Parasuraman, Zeithaml, and Berry 1985, 1988;
Mersha, 1992). Service quality has been defined as the degree and direction between
customer service expectations and perceptions (Newman, 2001). According to Saghier
(2013), SERVQUAL appears to be a reliable scale to measure banking service quality,
and provide a useful diagnostic role to play in assessing and monitoring service
quality in banks. He also stated that Customer Satisfaction in the Egyptian banking
services is significantly affected by Reliability, Empathy, Assurance and
Responsiveness, while the effect of the dimension of Tangibility does not have any
significant impact on customer satisfaction. The banking organisation should design
service standards that promote reliability to customers and consistency in service
delivery and not promise more than what they are able to deliver (Phiri and Mcwabe,
2013).

2.1.2.2 Responsiveness
Responsiveness defined as the willingness or readiness of employees to
provide service. It involves timeliness of services (Parasuraman et al., 1985). It is also
involves understanding needs and wants of the customers, convenient operating hours,
individualattentiongivenbythestaff,attentiontoproblemsandcustomerssafetyin
their transaction (Kumar et al., 2009).
According to Ali (2013), the study has revealed that service quality factors will
significantly leave an effect on customer satisfaction. A good move would be to place
more focus on products such as Ijarah financing, evident in 80.3% of the Tangibility,
Responsiveness, Assurance and Empathy of respondents.
2.1.2.3 Empathy
Empathy defined as the caring, individualized attention the organization
provides its customer (Parasurman et al 1994). According to Jun et al (2001) described
empathy as understanding individual customer needs and problems. The essence of
empathy is conveying, through personalized or customized service, that customers are
unique and special. This dimension refers to the level of caring and individualized
attention the bank provides for its customers.
According to Othman (2003), empathy also contained the bank location,
well-known bank, bank size in assets and capital, parking available confidentiality of
thebank,confidenceinbanksmanagement,productsandserviceprofitability,lower
service charge and provision of financial advices. Lam (2002) included convenient

opening hours in empathy items, which was supported by Surshchandae et al (2003)

whoreportedconvenientopeninghours,andunderstandingofindividualcustomers
needs and problems as components of empathy.
Havingcustomersbestinterestsatheartandprovidingindividual
attention were included in empathy in Newmansstudy(2001).Thestudyfoundthat
empathy was the third dimension in which customer expectations were not being met.
2.1.2.4 Islamic Tangible
Tangibles include the physical evidence of the service such as facilities and
appearance of personnel (Berry et al., 1985:46). Tangibles stand for the physical
facilities, equipment and appearance of (Parasuraman et al. (1988).
2.1.2.5 Accessibility
Access entails approachability and ease of contact. It means that the service is
easily accessible by telephone and the waiting time to receive service is not extensive.
This can be taken to refer to the ease of access to services and their timely delivery
(Parasurman et al., 1994). Also, approachability and easy of contact are relevant.
Parasurman et al. includes access in empathy. The following four items contributed to
accessibility: number of cash machine available; convenient opening hours; wide
range of Islamic services; low services charge; convenient bank location.
2.1.2.6 Reputation
Reputation is often difficult to define since the perception of what is and is not
reputableis in the eye ofthebeholder.Avarietyofdefinitionsofreputation have
been offered from a number of different academic and professional backgrounds.
According to the American Heritage Dictionary (1970: 600) reputation is the
generalestimationinwhichoneisheldbythepublic.
Kennington et al. (1996) and Almossawi (2001) concluded that the banks
reputationwasthemostsignificantfactorintheuseofconventionalbanksservices,
while Owusu-Frimpong (1999), Ta and Har (2000) and Kaynak and Harcar (2005)
found that profitability factors, such as low service charges and high interest rates,
were the major reasons why customers chose a particular bank. Kaynak and Harcar
(2005) also concluded that a fast and efficient service was also an attractive feature
valued by current and potential customers, while Gerard and Cunningham (2001)
considered that for most customers the most important criterion for bank selection was
feeling secure. In related work, Devlin (2002) showed that professional advice was the

most significant motivation for the choice of a home loan institution by customers in
the United Kingdom.

2.2 DEVELOPMENT OF RESEARCH FRAMEWORK

2.2.1 DEPENDENT VARIABLE
Customer Satisfaction
Customer satisfaction was measured by comparing the importance of each item that
showed a gap between expectations and perceptions.
2.2.2

INDEPENDENT VARIABLE

1. Responsiveness
Friendly employee
Polite employee
Helpful employee
Knowledgeable employee
2. Empathy
Confident in bank
Shariah advisor
Bank rules according shariah advisor.
3. Islamic tangible
Female staff wearing hijab
Bank has prayer room
4. Accessibility
Number of cash machine available
Convenient opening hour.
Wide range of Islamic Service.
5. Reputation
Bank size
Well known bank
Bank is building has Islamic architecture.

6. Responsiveness
Friendly employee

Polite employee
Helpful employee
Knowledgeable employee
7. Empathy
Confident in bank
Shariah advisor
Bank rules according syariah advisor.
8. Islamic tangible
Female staff wearing hijab
Bank has prayer room
9. Accessibility
Number of cash machine available
Convenient opening hour.
Wide range o Islamic Service.
10. Reputation
Bank size
Well known bank
Bank is building has Islamic architecture.

2.3 Hypothesis Development

Non-directional:
H1: There is a relationship between responsiveness and customer satisfaction among
Islamic banking students at Uitm Puncak Alam.
H2: There is a relationship between empathy and customer satisfaction among Islamic
banking students at Uitm Puncak Alam.
H3: There is a relationship between Islamic tangible and customer satisfaction among
Islamic banking students at Uitm Puncak Alam.
H4: There is a relationship between accessibility and customer satisfaction among
Islamic banking students at Uitm Puncak Alam.
H5: There is a relationship between reputation and customer satisfaction among
Islamic banking students at Uitm Puncak Alam.

2.4 CONCEPTUAL FRAMEWORK

Service

Customer

Quality

Satisfaction

Responsiveness

Empathy

Islamic tangible

Accessibility

Reputation

(FIGURE 2.4.1: Conceptual Framework)

CHAPTER 3
RESEARCH METHODOLOGY
3.1 Research Design
This study adapted a descriptive-correlational research design. Descriptive
research describes the characteristics of a population or phenomenon (Veera,
Chandran, Atikah, Krishnasamy, Rohani, Nazura, Akmal, 2016). The nature of this
study is quantitative study. The researchers are interested to use the result of this study

to describe the relationship of responsiveness, empathy, Islamic tangibles,

accessibility and reputation towards customer satisfaction.

3.2 Sampling Frame

A sample frame is defined as a set of information used to identify a sample
population for statistical treatment (Creswell, 2009). The sample frame for this study
is focusing among Islamic banking students part 3 until part 5 from the Faculty of
Business Management located in Universiti Teknologi Mara Puncak Alam as a
sampling frame. The sampling frame is getting the name list from the class
representatives from each class among Islamic banking students part 3 until part 5.

3.3 Population
Population refers to the entire group of people, events, or things of interest
that the researcher wishes to investigate (Veera et al, 2016). The study is focusing
among Islamic banking students part 3 until part 5 from the Faculty of Business
Management located in Universiti Teknologi Mara Puncak Alam. The total population
of this study is about 300 students Islamic banking from part 3 until part 5 as
respondents for this research.

3.4 Sampling Techniques

This study used non-probability sampling technique which is convenience
sampling. It refers to the members of population who are conveniently available to
provide the information that is needed and also believe that convenience sampling is
the most suitable technique for to get the data (Veera et al, 2016).Therefore, the
respondents are among Islamic banking students at Universiti Teknologi Mara Puncak
Alam

3.5 Sample Size

Sampling size is a subset of the population (Sekaran & Bougie, 2014).
Roughly, the total number of students Islamic banking from part 3 until part 5 is
approximately 300 students. Questionnaires were distributed equally among students
of Islamic banking at Universiti Teknologi Mara Puncak Alam. According to Roscoe
(1975) suggests that number of variable multiple with 20 to know numbers of students
that need to answer questionnaires. There are six variables consists of responsiveness,
empathy, Islamic tangibles, accessibility, reputation and customer satisfaction.
6 variables x 20 = 120 respondents

There are 120 respondents of Islamic banking students at Universiti Teknologi Mara
Puncak Alam that need to answer the questionnaires.

3.6 Unit of Analysis

A unit of analysis refers to the level of aggregation of the data collected
during the subsequent data analysis stage (Veera et al, 2016). The unit of analysis of
this research is individual unit. It involved among Islamic banking students from part
3 until part 5 at Universiti Teknologi Mara Puncak Alam in analysing the relationship
between responsiveness, empathy, Islamic tangibles, accessibility and reputation
towards customer satisfaction.

3.7 Data Collection Procedure

The questionnaire was adopted and adapted from few gathered
dissertations. The questionnaire was validated by a research expert on face validity.
The questionnaire was distributed to the Islamic banking students at Universiti
Teknologi Mara Puncak Alam. This research was conducted cross sectional where a
study can be carried out in which data are gathered just one, perhaps over a period of
days, weeks or months, in order to meet a research objective (Veera et al, 2016). The
respondents will be given a time which is one week to complete the questionnaire.The
data were collected and recorded into Statistical Packages for the Social Sciences
(SPSS) system version 21.

3.8 Instrument
The questionnaire was adopted and adapted from two dissertations.
However, the questionnaire was selected carefully to ensure that the questions were
related to the research, where this study wanted to identify the relationship of
responsiveness, empathy, Islamic tangibles, accessibility and reputation towards
customer satisfaction.
By using the suitable questions, a questionnaire was constructed and
segregated into 3 sections. In Section A, consists of 34 items that categorized under
responsiveness, empathy, Islamic tangibles, accessibility and reputation. The set of
questions from this part was adapted from Najat Abdullrahim (2010). Next is Section

B, where this section has questions related to the customer satisfaction and the set of
question were adapted from Sharaf Mutahar Alkibsi (2010). Sections C questions
were based on the demographic information such as gender, age, semester, account in
Islamic bank and which Islamic bank often to go to identify the respondents personal
details.

3.9 Validity of Instrument

Service quality (SQ) has been viewed as an important issue in the banking
industry according to Stafford (1994) because its apparent relationship to costs,
profitability customer satisfaction, customer retention and positive word of mouth.
This study is using the EIBSQ (English Islamic Banking Service Quality)
model, based on proposed items of service quality, which are 34 items and the factors
are labelled as responsiveness, empathy, Islamic tangibles, accessibility and
reputation. According to Oliver, customers would perceive service quality to be low if
service quality did not meet their expectations, and customers would perceive service
quality to be high if service quality did meet their expectations. Based on an extensive
review of research on service quality, Parasuraman (1985) developed the SERVQUAL
model, which indicates that service quality can relate to service quality dimensions.

4.0 Data Analysis

Data analysis involves several stages: the completed questionnaires were
edited for completeness and consistency, checked for errors and omissions and then
coded to Statistical Package for Social Science (SPSS), version 20.0. Details about
data analysis are illustrated in Table 3.1
Research

Concept /

Objectives

Construct

Measurement

To identify the

The issue is

RQ1

highest mean

concern about the

Which dimension is the

among the

highest mean

highest mean among the

service quality

among the service service quality?

dimension.

quality dimension
among Islamic
Banking students

Scale

Statistics

Interval

Reliability
Test

in Universiti
Teknologi Mara
Puncak Alam.

To examine the

The issue is

RQ2

relationship

concern on the

What is the relationship

between service

relationship

between responsiveness

quality and

between service

and customer satisfaction?

customer

quality and

satisfaction

customer

RQ3

among Islamic

satisfaction

What is the relationship

Banking

among Islamic

between empathy and

students in

Banking students

customer satisfaction?

Universiti

in Universiti

Teknologi Mara

Teknologi Mara

RQ4

Puncak Alam.

Puncak Alam.

What is the relationship

Pearson
Interval

Correlation
Coefficient

between Islamic tangible

and customer satisfaction?

Research

Concept /

Objectives

Construct

Measurement
RQ5
What is the relationship
between accessibility and
customer satisfaction?
RQ6

Scale

Statistics

What is the relationship

between reputation and
customer satisfaction?

TABLE 3.1

CHAPTER 4
FINDINGS OF STUDY
4.1 Survey Return Rate
A total 130 questionnaire were distributed to the respondents at UiTM Puncak
Alam. In order to obtain the information the researcher had given appropriate time for
the students to answer the questionnaire. The reason is because in order to give the
students more time to think about the answer. However only 123 sets of questionnaire
were return back and 7 sets of the questionnaire were not return back. Refer table
4.1.1 below.
Table 4.1.1
Number of respondents involved (n=123)
Number

of Number

questionnaire

questionnaire

distributed

return

130

123

of Percentage
return (%)

Number
valid

of Percentage
valid (%)

questionnaire
95

123

100

*7 sets of questionnaire were not return

4.2 Demographic Profile of Respondents

The profile of the respondents is describe in this section. Frequency
distribution and percentage were obtained for all demographic background. The
information of the respondents in Section C includes gender, age, program, semester,
ethnic, account in Islamic bank and which Islamic bank they often go. The results are
as follows:
Table 4.2.1
Gender of Respondents
GENDER
FREQUENCY
MALE
37
FEMALE
86
TOTAL
123
Table 4.2.1 above shows that most of the respondents are
69.9% and male 30.1%.

PERCENT
30.1
69.9
100
female students that result

Table 4.2.2
Age of respondents
AGE
18-20
21-23
24-26
27 AND ABOVE
TOTAL
Table 4.2.2 above shows that

FREQUENCY
PERCENTAGE
2
1.6
116
94.3
4
3.3
1
0.8
123
100
most of the respondents are 21-23 years old (94.3%),

followed by 24-26 years old (3.3%), 18-20 years old (1.6%) and 0.8% from 27 and
above years old.
Table 4.2.3
Program of respondents
PROGRAM
FREQUENCY
ISLAMIC BANKING
120
FINANCE
1
MASS COMMUNICATION
1
ARCHITECTURE
1
TOTAL
123
Table 4.2.3 above shows that majority of the respondents from

PERCENT
96.7
0.8
0.8
0.8
100
Islamic banking

background, 96.7%. In addition 0.8% respondents are from Finance, Mass

Communication and Architecture respectively.

Table 4.2.4
Semester of respondents
SEMESTER
3
4
5
10
TOTAL
Table 4.2.4 above shows

FREQUENCY
PERCENT
20
16.3
60
48.8
42
34.1
1
0.8
123
100
most of the respondents are from semester 4 students

(48.8%). It is followed by respondents from semester 5 (34.1%), semester 3 (16.3%)

and the least is from semester 10 (0.8%).

Table 4.2.5

Ethnic of respondents
ETHNIC
FREQUENCY
PERCENT
MALAY
118
95.9
BIDAYUH
1
0.8
MELANAU
1
0.8
SULUK
1
0.8
BUGIS
1
0.8
RUNGUS
1
0.8
TOTAL
123
100
Table 4.2.5 above shows that majority of the students are Malay (95.9%) and followed
by Bidayuh, Melanau, Suluk, Bugis and Rungus (0.8%).
Table 4.2.6
Saving Account of respondents
SAVING ACCOUNT
YES
NO
TOTAL
Table 4.2.6 below indicates that all

FREQUENCY
PERCENT
123
100
0
0
123
100
of the respondents have saving account with

Islamic bank in Malaysia. This shows that many people are using Islamic banking
services.
Table 4.2.7
Islamic Bank of respondents
ISLAMIC BANK
FREQUENCY
BANK ISLAM MALAYSIA BERHAD (BIMB)
110
BANK MUAMALAT
2
MAYBANK ISLAMIC
7
CIMB-I
4
TOTAL
123
Table 4.2.7 above indicates that majority of the respondents have an

PERCENT
89.4
1.6
5.7
3.3
100
account with

Bank Islam Malaysia Berhad (BIMB) that shows 89.4%, followed by Maybank
Islamic 5.7%, CIMB-I 3.3% and the least is Bank Muamalat.

4.3 Analysis of Findings

4.3.1 Reliability Test

The focus of reliability in a study is the correctness and exactness of the

research methods and design (Cooper & Schindler, 2008). Reliability research occurs
when the study results would be the same if replicated under similar conditions
(Neuman, 2006). Cronbachs alpha coefficient was used to access the intraitem
consistency of the scale. The coefficient is a value between 0 (very low) and 1 (very
high) that indicates the internal consistency the items in the scale to measure latent
variable. The overall scale in the study was thus reliable, with a Cronbachs alpha
coefficient of 0.951 indicating thatthesurveyitemsfittogether.TheCronbachsalpha
coefficients for the study variables ranged between 0.762 and 0.913. These high
Cronbachs alpha coefficients indicate that each construct has a high internal
consistency among the items. The data appeared to be reliable in answering the
research question. (Refer table 4.3.1.1 below.
Table 4.3.1.1
Reliability Test
DIMENSION

CRONBACHSALPHA

Responsiveness

0.899

Empathy

0.913

Islamic Tangible

0.762

Accessibility

0.795

Reputation

0.870

Customer Satisfaction

0.872

4.3.2 Descriptive Analysis

Descriptive analysis was used to summarize the collected data and provide an
understanding of respondents; answer to each survey item as well as the central
tendency of the variables of the study. The following sections include a description of
each five dimensions at the item level to obtain a general understanding of customer
satisfaction of Islamic Bank service quality. The items were analysis used Likert-scale
answer of 1 (very poor), 2 (poor), 3 (somewhat good), 4 (good), 5 (very good) and 6
(excellent).
The descriptive analysis in table 4.3.2.1 below indicates that the highest mean
for the service quality dimension is empathy 4.6548 followed by reputation 4.4858
and Islamic tangible is 4.4743. This results shows that most of students in UiTM
Puncak Alam is more concerned about empathy, whether the bank is concerned about

customer needs and problems. Thus the RO1 for this research is achievable where the
highest mean is empathy.
Table 4.3.2.1
Descriptive Analysis, (n=123)
DIMENSION

MEAN

STANDARD
DEVIATION

4.3.3

Responsiveness

4.28

0.70

Accessibility

4.28

0.78

Islamic Tangible

4.47

0.78

Reputation

4.49

0.85

Empathy

4.65

0.68

Normality Test
According to Hair, Anderson, Tattham and Black (2006), the most

fundamental assumption in multivariate analysis in normality, refers to the shape of

the data distribution for an individual metric variable and its correspondence to the
normal distribution.
The summary of the results tests are presented in table 4.3.3.1. The skewness
and kurtosis statistic will indicate the data distribution. In order for the data to be
normally distributed, the skewness and kurtosis values should be in the range of -1.96
to +1.96. In this research indicates that all the data independent and dependent were
normally distributed as the skewness and kurtosis were in range of -1.96 to +1.96 as
shown on the below table. Therefore, Pearson correlation will be prevailing.

Table 4.3.3.1
Normality Test, (n=123)

DIMENSION

SKEWNESS

KURTOSIS

Responsiveness

-0.139

-0.213

Empathy

-0.192

-0.561

Islamic Tangible

-0.487

-0.205

Accessibility

-0.440

-0.067

Reputation

-0.480

0.675

-0.136

-0.146

INDEPENDENT
VARIABLES

DEPENDENT
VARIABLE
Customer Satisfaction

4.3.4

Bivariate Analysis
Forthisresearchstudypurpose,theresearchusedPearsonsProductMoment

Correlation Coefficient to conduct analysis in order to examine the relationship

between service quality and customer satisfaction. Therefore, the relationship between
service quality and customer satisfaction were described based on the resulted from
the bivariate correlation analysis. Moreover, in interpreting the relationship between
service quality and customer satisfaction, the researcher used the guidelines from
Cohens (2013) to define the values between variables (refer table 4.3.4.1). The
Bivariate correlation analysis results of the relationship between service quality and
customer satisfaction is tabulated in table 4.3.4.2. In the table below indicates that
reputation is the strong correlation with customer satisfaction which results (R-0.648).
It was followed by accessibility that indicates that a moderate correlation with
customer satisfaction which results (R-0.566) and responsiveness also indicates that
moderate correlation with customer satisfaction which results (R-0.588). This is
supported by research conduct by Abdullrahim (2010) indicates that responsiveness is
one of the most important dimension in order to know the customer satisfaction with
the Islamic bank because it based on human capability. Therefore, all the hypothesis
were accepted.
Table 4.3.4.1
Guidelines for Interpreting Correlations
Degree of Correlation

R-value

Very Strong

+/- 0.8 to 1.0

Strong

+/- 0.6 to 0.8

Moderate

+/- 0.4 to 0.6

Weak

+/- 0.2 to 0.4

Very Weak

+/- 0 to 0.2
(Source:Cohens,2013)

Table 4.3.4.2
Bivariate Correlation Analysis

Responsivenes Empath
s

Islamic
Tangibl

Accessibilit Reputatio
y

Satisfactio

Pearson
Correlatio
Responsivenes n
s
Sig. (2tailed)
N
Pearson
Correlatio
n
Empathy
Sig. (2tailed)
N
Pearson
Correlatio
Islamic
n
Tangible
Sig. (2tailed)
N
Pearson
Correlatio
n
Accessibility
Sig. (2tailed)
N
Pearson
Reputation
Correlatio
n

123
.573**

Customer

.000
123
.469**

123
.528**

.000

.000

123
.553**

123
.554**

123
.553**

.000

.000

.000

123
.579**

123
.568**

123
.542**

123
.710**

Customer
Satisfaction

Sig. (2tailed)
N
Pearson
Correlatio
n
Sig. (2tailed)

.000

.000

.000

.000

123
.558**

123
.555**

123
.508**

123
.566**

123
.648**

.000

.000

.000

.000

.000

123

123

N
123
123
123
**. Correlation is significant at the 0.01 level (2-tailed).

123

Chapter 5
Conclusion and Recommendations
Introduction
The finding and conclusion of this research on are first presented in this chapter. Then
the commendation used for this study is as followed the limitation and future research
suggestion are presented.

5.1 Discussion
Rendering to the conceptual framework of research (see the figure 2.4.1), the first part
of the frame work concentrated about service quality. The findings show that customer
satisfaction of Islamic banking in Puncak Alam area is moderately high quality. All of
the dimensions of service quality Responsiveness, Empathy, Islamic tangible,
Accessibility and Reputation- were accepted by the respondents. The average sc ores
of altogether dimensions is greater than 3. The majority of the respondents are scored
in agree and excellent with the service quality questions. Among five dimensions, the
highest average score is empathy, followed with the reputation and Islamic tangible.
The another part is concentrated on the customer satisfaction with the Islamic banking
service among UITM Puncak Alam student. The outcomes bring into being that
respondents are satisfied with the Islamic banking as the highest mean for the service
quality dimension is empathy 4.6548 which means they agreed that banks as giving
individual attention; convenient operating hours; giving personal attention; best
interestinheartandunderstandcustomersspecificneeds.
The researcher divided customer satisfaction scores into six ranking, 1 is low very
poor, 2 is poor, 3 is somewhat good,4 is good,5 is very good and 6 is excellent.This
research divided the test outcome of relationships between service quality and
customer satisfaction. The results showed that among five dimensions of the service
quality, there are three dimension that significant positively related to customer
satisfaction. They are responsiveness (HO1), empathy (HO2) and Islamic tangible
(HO3),accessibility (HO4) and bank reputation (HO5) The dimensions of empathy
have significant relationship to customer satisfaction. On the general, service quality

of Islamic bank has significant positively to customer satisfaction. The respondents

are satisfied with the service quality of Islamic banking.
On the subject of to the Accessibility, the analysis find that the average agreement of
this dimension is the lowest among five dimensions (see Table 4.3.2.1), but it is a
dimension that influences to customer satisfaction. Thus, Islamic Bank should
concentrate on enhance the accessibility. Bank should increase the sufficient customer
service staff in order to manage with the Islamic banking services quality. As regards
to the level of accessibility, the bank should enhance technology use by Islamic bank
to increase the level of customer satisfaction on Islamic banking service such as online
facility.

5.2 Recommendation for Islamic Banking services Malaysia.

In the future research, more research is needed to further investigation about customer
satisfaction. The researcher can study the service quality on customer satisfaction
among employees or Malaysia citizen. Furthermore, in the future the researcher can
do a simple sampling technique because everyone has the chance to being selected as
a subject or stratified sampling technique do to this research if the respondents were
employees.
Service quality is viewed as an important issue in the banking industry (Stafford 1994)
.Islamic Banking product and service operate in line with conventional banking
,which is the Islamic banking product and service have a lot of similarities with
conventional bank in term on how it is operates by permissible activities in Islam.
However Islamic banking product and service have their own specialty especially
among Muslim, in order to fulfil the customer satisfaction among consumer of Islamic
banking to enhance the service provided by Islamic banking to compete with
conventional banking.
According to this research, the results show that five dimension, responsiveness,
empathy, Islamic tangible, accessibility and reputation, positively and significantly
relate to customer satisfaction. Therefore, the bank should focus more on these five
dimensions in order to reach the desired customer satisfaction level.

5.3 Conclusion
It is concluded that managers should increase the quality of services to preserve their
customers as satisfied customers for long-term benefits. Similarly, they should make
arrangements to enhance awareness among customers and employees of banks for
improvement of their products/services to enhance performance. Islamic banks should
develop marketable products according to Islamic instructions to compete with
conventional banks. The study has developed an understanding about the connection
between service quality and customer satisfaction regarding Islamic and conventional
bank

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