Customers’ Perceptions toward Islamic Banking in the Gulf Region


In the past decade, Islamic banking (IB) has seen incredible growth. The purpose of this study is to determine the factors affecting perceptions of customers to adopt Islamic banking and finance. The primary data is collected through a questionnaire survey, conducted amongst university students and bank employees from three Gulf Cooperation Council (GCC) countries (UAE, Kuwait, and Saudi Arabia). This study applies a regression model by analyzing understanding (U), awareness (A), religious inspiration (RI), customer innovativeness (CI), and perceived risk (PR) as independent variables and customer perception (CP) as a dependent variable. The results indicate inclusively that perceptions of customers are optimistic regarding Islamic banking and finance. The findings reveal that all independent constructs significantly influence the perceptions of customers about Islamic financing. Resultantly, the research outputs have significant implications for Islamic regulatory bodies. The foremost implication of this research is to promote academic linkages with the banking sector, i.e. to conduct research studies related to customers’ perceptions about Islamic banking in other GCC countries. This research contributes to enhancing the theoretical perspective of customers’ perception to consider Islamic banking services and gives practical suggestions to help marketers of Islamic banks to maximize outreach. Moreover, the results can serve as a directive factor for future studies.