Abstract
Over the past decades, the growth of Islamic banking (IB) has significantly been increased globally in retail and full-fledged banking. Islamic Economy (IE) is a driving force of Islamic finance and an alternative banking of conventional banking. The aim of IB is to bring interest (Riba) free, avoid uncertainty (Gharar) and risk-free return in banking and finance to bring social justice in the economy. However, at a time of such tremendous success, IB faces considerable criticism due to various issues such as quality products, services, management, and marketing. It may suggest that banking institutions must prove that their offerings are complying with the Shariah principles and are in line with customer’s expectations, which are also the objectives of Customer Relationship Management (CRM). To achieve the objectives, this study employed primary sources that help to raw information and first hand evidence while a mixed-method research was conducted. A valid total of 351 customers participated in the survey while 12 interviews were conducted among IB professionals in the UK and Bahrain.
Among the key findings of questionnaire survey, perception and satisfaction towards Islamic bank of both the UK and Bahrain were comparatively positive than negative and minor in differences based on the statistical significance. Chi-square tests and regression analysis shows majority Muslim customers have influence in adopting IB services in Bahrain while lack of awareness is major factors among increasing British consumers to undertake IB services. Finding also suggests that there are high co-relations on satisfaction and recommendation in attracting customers towards IB services. On contrary, this study finds no co-relations and negative impact in adopting IB services due to familiarity of IB terms, gender, age or marital status among survey participants.
However, interview among professionals revealed that the concerns are remained in innovative products, quality services, staff knowledge, role of Shariah scholars and authentic marketing. On the other hand, it is also found that lack of awareness among customers seriously hinders IB industry to grow its full potential. This confirms the greater needs of CRM implementation in IB industry. Another key finding is management and investment in IB, which is instrumental for survival of Islamic bank in the financial industry. Because bank professionals have serious doubt about the UK investor’s intension due to lack of funding which has reduced services and operations significantly. While in Bahrain, too many banks exist damaging the reputation of IB resulting merger or closing up the operations. This research suggested acquiring customer’s feedback seriously using operational components of CRM to reconnect customers with innovative products to regain customers’ trust and thus growth of Islamic banking. This research has also compared, contrasted, and synthesized the findings and made recommendation in line with CRM to Islamic financial institutions to undertake appropriate strategies and to implement them to bridge a bond between customers and IB’s products.