Factors affecting the loyalty of customers in Islamic banking: a case of Batu Pahat, Johor / Nur Atiqah Mahmod

Malaysia is known as the country with most develop Islamic banking system where it has become benchmark for other countries. However, despite the development of Islamic banking industry, people especially Muslims are still blurry or unaware with the wide range of existence in Islamic banking products and services. Instead, Islamic banks operating in Islamic countries are also faced with strong competition not only from Islamic banks but also from non-Islamic rivals (Naser and Moutinho, 1997). Hence, through this curiosity, as a researcher have conducted a research on customer loyalty towards Islamic banking. This research were conducted by distributing questionnaires to 100 respondents who are the customer of full fledge Islamic banks which consist of Islamic bank's account holder from the ages of 18 years old and above. The respondents comprised of people who lived around Batu Pahat city, Johor. Data analysis were conducted by using SPSS to determine the relationship between independent variables and dependent variables. This study provides a guide for Islamic bank management in Malaysia for enhancing customer loyalty by strengthening bank strategies to attract or maintain existing and new customers. Based on the findings of this research, the results shows that the service quality and trust are the key determinant that influences the customer loyalty towards Islamic banking. It is supported by Amin and Isa (2008) which the service quality has the positive significant relationship that affecting towards customer loyalty. Trust also shows a positive significant relationship that affects the loyalty of the customer towards Islamic banking (EM Kishada & Ab Wahab Senior Lecturer, 2013).