What drives consumer choice of Islamic banking services in the United Arab Emirates?

Anamitra Shome (Department of Accounting, Brock University, Saint Catherines, Canada)
Fauzia Jabeen (Abu Dhabi University, Abu Dhabi, UAE)
Rajesh Rajaguru (Department of Management and Marketing, Tasmanian School of Business and Economics, University of Tasmania, Hobart, Australia)

International Journal of Islamic and Middle Eastern Finance and Management

ISSN: 1753-8394

Publication date: 16 April 2018

Abstract

Purpose

Islamic banking (IB) has witnessed remarkable growth in the past decade. The purpose of this study is to explore some factors that are influencing the choice of Islamic banking and finance (IBF) products and services in the United Arab Emirates (UAE), a predominantly Muslim country.

Design/methodology/approach

Students enrolled at a university located in a major emirate in the UAE were asked to respond to a survey on factors underlying their decision to open an account at an Islamic bank. Responses were analyzed using descriptive statistics, analysis of variance and regression analysis.

Findings

Results indicate that the decision to open an account with an Islamic bank is influenced by consumer expectations regarding the conformity of the bank’s operations with Islamic principles, as well as consumers’ Arab language skills. Variables such as consumers’ nationality, gender, education and familiarity with IB do not have a significant influence on the decision to open an account at an Islamic bank.

Research limitations/implications

The study focuses on university students from a certain Emirate only, which somewhat limits the generalizability of the research results. Nevertheless, the findings of this study may potentially provide some practical insights for further improving and promoting IB, with special reference to the UAE youth market segment.

Originality/value

The research is original in nature, particularly as there have not been many instances where the choice of potential consumers (university students) regarding IB and finance services has been explored within the IB sector in a predominantly Muslim nation such as the UAE, an emerging Gulf economy. Consequently, the research findings have important implications for Islamic banks operating in a predominantly Islamic environment.

Keywords

Citation

Shome, A., Jabeen, F. and Rajaguru, R. (2018), "What drives consumer choice of Islamic banking services in the United Arab Emirates?", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 11 No. 1, pp. 79-95. https://doi.org/10.1108/IMEFM-03-2017-0066

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Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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