Service quality of English Islamic banks.

Abstract

Britain has the most active and developed Islamic banking sector in the European Union. This sector is set to grow with both Islamic and non-Islamic banks now offering a range of Sharia compliant products. However, are these banks meeting the service quality needs of their customers? Previous studies on service quality within Islamic banks have been restricted to Muslim-based countries and whilst English Muslims will have the same religious beliefs, their values may have been altered by the western society in which they live and work. Hence existing service quality tools are likely to be unsuitable for this market. Using mixed methods, this research developed a modified SERVQUAL model for measuring service quality in English Islamic banks. The resulting instrument is intended to help the managers of Islamic banks based in England to measure their service quality and focus their attention on the service quality dimensions that matter most to Muslim customers Items for the new service quality instrument were taken from the original SERVQUAL model, previous studies that modified SERVQUAL and eight focus groups conducted with members ofthe English Muslim community. The resulting instrument was tested via a questionnaire with more than 300 Muslims in England resulting in the EIBSQ, an English Islamic Banking Service Quality tool. This measures service quality as perceived by English Muslims. Using factor analysis, the instrument includes thirty-four items, which are grouped into five dimensions. The five dimensions are: responsiveness, credibility, Islamic tangibles, accessibility, and bank image. One of the key contributions ofthis thesis is the proposed EIBSQ. Previous studies using SERVQUAL reveal that the use of this original scale in an international context raises a legitimate concern about validity across borders and the scale construct as items can be affected by different contexts. To the researcher's knowledge, very few service quality models have been developed for the Islamic banking industry and none exists to measure the quality of service and customer satisfaction for the English Islamic banking industry.