Customer switching behavior among Indonesian Muslims: Evidence from the merger of Indonesia’s State-owned Islamic banks

Mochlasin,M.Ag., Dr. (2024) Customer switching behavior among Indonesian Muslims: Evidence from the merger of Indonesia’s State-owned Islamic banks.

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Abstract

This research examined the factors that affect customer satisfaction andswitching behavior in the post-merger of the state-owned Islamic banks inIndonesia. Data were collected by distributing an online questionnaire to a total of210 Muslim customers. Furthermore, the collected data were analyzed using SEM-PLS. The findings indicate that product quality can enhance customer satisfaction,and service quality can mitigate customer switching behavior. Interestingly, theShariah compliance also has a significant effect on customer satisfaction andswitching behavior by Indonesian Muslim. This suggested that, in Indonesia, wherethe majority of the population is Muslim, businesses that prioritize Shariah compli-ance are more likely to retain customers. Implication of this research providesempirical evidence to Islamic banks regarding the significance of reputation. Basedon the findings, bank management tends to consider to integrate the productquality, service quality, and Shariah compliance into the banking business model. Itis essential to consistently apply Sharia compliance to enhance customer satisfac-tion and reduce switching behavior. The Originality of this research is the first inIndonesia to examine customers’ switching behavior in the context of the merger ofthe State-Owned Islamic Banks. The findings can serve as an evaluation tool for thegovernment and Islamic bank management to strengthen the country’s economy

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