Islamic Finance 

Islamic Bank Service Quality and It’s Impact on Indonesian Customers’ Satisfaction and Loyalty

Muniaty Aisyah | 08 October, 2018 | Industry Report
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DescriptionThis study investigates the impact of Islamic banks' service quality on Indonesian customers’ satisfaction and loyalty. It used Bank Syariah Mandiri (BSM) as a sample, given that it is the largest Islamic bank in Indonesia, which from 2011 to 2014 had achieved the best service quality award. This paper further dedicates sections to elaborate on the method of research that has been used and to point out the results of this study. It also sheds the light on some strategies in order to improve service quality in the Islamic banking industry in Indonesia
Executive SummaryNowadays, customer satisfaction is an important element that concerns any organizations, due to its effect on the profitability. This study elaborates on the impact of service quality offered by Islamic banks in Indonesia on customers’ satisfaction and loyalty, using Bank Syariah Mandiri (BSM) in South Jakarta as a sample. It starts by introducing the readers to the Islamic banking industry in Indonesia, highlighting some principles of Islamic finance. Then it moves on to draw the attention to an instrument called CARTER, developed by Othman and Owen in order to understand customers' needs for Islamic banking quality service. Additionally, it discusses some important points such as the importance of customer satisfaction in the Islamic banking industry as well as the categories of customers loyalty. This paper further dedicates a section to discuss in details the results of this study. At the end, it offers some recommendations and strategies for improving service quality and consumers’ confidence in the distinction of Islamic banking in Indonesia