Students’ Preferences in Banking Selection – Islamic Perspective

1. Students’ Preferences in Banking Selection – Islamic Perspective Luna S. AlYafi AlZuhrilalyafi@ksu.edu.sa King Saud University College of Business Administration Marketing Department

2. Introduction • The idea of Islamic banking system • Definition of Islamic Banking • Saudi Arabia Culture • Banks of Kingdom of Saudi Arabia (KSA)

3. Problem Statement • The aim of this research is to identify factors that student customers may consider when selecting a bank, and the relative importance they place on these factors.

4. Importance of the Study • Size of the global Islamic banking industry • Islamic banking in the Middle East • The Islamic banking growth story continues to be positive, growing 50% faster than the overall banking sector • “More than 75 countries and 430 Islamic institutes provide Islamic products” • Selection criteria of Islamic banking among college students.

5. Literature Review • Why Islamic banking. • “Islamic banking is a form of modern banking based on Islamic legal concepts” • Aim of Islamic Banking • Based on According to • Rational Choice Theory • Schiffman & Kanuk (2009), identified four models of how and why the individual behave in a specific way • The economic view • The passive view • The cognitive view • The emotional view

6. Literature Review (Cont.) Factors customers may consider in selecting bank and their relative importance in different parts of the world Source: Jahiruddin & Haque (2009)

7. Theoretical Framework Note: + indicates a positive and important result, ± indicates an equivocal result, - indicates negative or no significant result and n/a indicates variable was not investigated / examined in the study Source: Marimuthu, Wai Jing, Phei Gie, Pey Mun, & Yew Ping, (2010)

8. Theoretical Framework (Cont.) • Theory of Buyer Behavior • Consumer and risk reduction • Evaluation of brands • Personality Factors: • Market Maven • Other Factors Criteria of Islamic Bank Selection • Social Factors: • Family • Social groups • Reference groups • Word of mouth • Religiosity

9. Theoretical Framework (Cont.) • Social Factors • Influences of society, family and reference group. • Family, • Social groups, • Reference groups, • Word of mouth • Religiosity • Personality Factors • Market Mavens: "Consumers who collect information about the market, concerning products, places to shop, etc.., and in turn influence others” • Other personal factors influences are the consumer internal preferences whether to engage; or not; in the relationship with the banks

10. Research Questions • Is there a relationship between customers’ personality and Islamic bank selection? • Do social factors influence the relationship between personality and Islamic bank selection?

11. Research Methodology • Definition and Operationalization of Variables • Personality Factors • Social Factors • Data Collection Method • Sampling • Data Collection Instrument • Statistical Analysis Techniques

12. Research Methodology (Cont.) • Data Collection Method • Survey, for both gender • Sampling • KSU, CBA students • Data Collection Instrument • Survey is divided into two parts • Five-points Likert scales is used • Statistical Analysis Techniques • Statistical Package for the Social Sciences version 19.0 (SPSS 19) • Pilot study (n=66): • Internal consistency was tested using the Cronbach’s alpha coefficient Cronbach's alpha was measured for all items • Cronbach’s alpha = 0.93.

13. Limitations of the Study • Surveying KSU, CBA students • Students may change their answers, influenced by other students “Life is not what it's supposed to be. It's what it is”