Perception of Islamic Banking

The practice of a dual-banking system in Malaysia has impacted Islamic and conventional financial institutions to have an intense competition according to Ahmad and Haron (2002). Based on the study by Loo (2010), the dogma by the non-Muslim in Malaysia that when Islam is generally associated with Malays and Malays are associated with government service, whereby inefficiency and lack of motivation is well known. Therefore, the inefficiency and low productivity of the Islamic banks in Malaysia are among the reasons that change their preference to conventional banks. Apart from that, the study also highlighted that Islamic banking staff are lacking in professional business orientation. The author also elaborates that the staff treat customers as ‘'buddies" who will accept inefficiencies instead of understanding that customers demand fast and attentive services. Moreover, non-Muslim consumer ranked second first which means good quality service is an important factor in choosing Islamic banking. Thus, Islamic banks should take an in-depth considerations and action since most study found that service quality is the main reason that attract consumers to a certain bank since the religious motivation factor is no longer applicable even to Muslim consumers.

3.4 Insufficiency of knowledge of Islamic banking personnel.

The issue of incompetence and lack of courtesy in Islamic banks is one of the very common aspect that were discussed in many studies such as of Abbas et al. (2003) who conducted a study on customer's choice in selecting Islamic financing products. Dusuki and Abdullah (2007) also indicated that sufficient knowledge in various Islamic banking instruments as well as implementing good ethics, professionalism, duties and responsibilities towards customers and organization will eventually result in customer's preference towards Islamic banking. Apart from that, a study by Loo (2010) stated