Business Research Report: Islamic Banking Acceptance at UM-W

This business research report investigates the determinants of acceptance of Islamic banking products and services among students at the International University of Malaya-Wales. The study explores how awareness, comprehension, and perception of Islamic banking, along with the availability of various products and religious obligations, influence student attitudes. The theoretical framework highlights the importance of understanding consumer perceptions to develop effective marketing strategies for Islamic financial institutions. The report also includes a validity test using Cronbach's alpha to assess the internal consistency of the survey responses. The overall Cronbach's Alpha value of 0.959 indicates high internal consistency. The item-total statistics revealed that the variable "Islamic banks in Malaysia are well advertised in the media" has a low reliability and should be excluded to maintain the consistency of the results. The findings suggest that understanding the characteristics of Islamic banking, such as interest-free banking, and considering religious obligations are crucial factors. The research also considers the image and perception of Islamic banking in Malaysia based on Islamic Shariah regulations.

Running Head: BUSINESS RESEARCH REPORT
Determinants of Acceptance of Islamic Banking Products and Services among students at the
International University of Malay -Wales.
Name of the student
Name of the university
Author’s note

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Table of Contents
Theoretical Framework....................................................................................................................2
Validity Test....................................................................................................................................4
References........................................................................................................................................7

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Theoretical Framework
The current segment elucidates in detail the framework or the structure that can help in
supporting the theory of this research study under consideration. Therefore, this theoretical
framework formally introduces and explicitly illustrates the theory that explains the reason why
the specific research problem under consideration exists (Seyed-Javadin et al., 2014).
The present study shows that the concern is essentially determination of the primary factors that
lead to the acceptance of Islamic banking products as well as services among the students in at
the International University of Malaya, Wales. Awareness, comprehension and perception of
individuals towards the Islamic banking products in Malaysia can help in building the attitude
and image of the individuals towards Islamic banking. In addition to this, availability of different
products as well as services together with religious obligation can be considered to be important
factors that can be considered to be factors/determinants of acceptance of the said product.
Founded on the review of the academic literature, it can be said that majority of individuals in
Malaysia are not conscious of Islamic banking. Even they are conscious of Islamic banking they
exactly do not in fact understand the overall operations of Islamic banks (Lujja et al., 2016).
However, comprehensible understanding of consumer awareness, understanding and perceptions
can assist the Islamic financial institutions to generate apt marketing stratagems to assume a
greater share of the financial market. In essence, this is because awareness, understanding as well
as perceptions are necessarily the foundation of utilization of Islamic banking products as well as
services. Again, if people are not conscious and do not understand properly about different
Islamic banking products and they would not adopt initiative to adopt specific Islamic banking
products. Therefore, in a bid to attract more number of people to accept different products of
Islamic banking, it is feasible to go back to mainly the roots of the trouble that can help in
determination of factors that direct people to utilize Islamic banking products as well as services.
Lujja et al., (2016) asserts that Islamic banks have to be make certain that their clients can
understand their principles of operation otherwise the clients might have post-purchase
difference of opinion.
In this study, it is imperative to understand the characteristics of Islamic banking that is
generally referred to as the interest free banking else wise risk sharing banking. Islamic banking
has developed and grown to different parts of the world and therefore is not limited to only the
nations with majority of Muslim populations. Therefore, religious obligation is a very important
factor that needs to be examined as an influencing factor behind acceptance of Islamic banking
products. Researchers have explored significant variances in opinion among different races
towards Islamic banking. Again, prior studies reveal that Islamic banking products have certain
differences from the conventional ones as per the Shariah principle (Jinjiri Ringim, 2014).
Therefore, consciousness as regards the varied products made available by these banks might
also be considered as important factor behind acceptance of students in Malaysia. In addition to
this, prior studies also reflect different factors that help in developing the image as well as
perception of individuals towards Islamic banking. It can hereby said that image as well as

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perception of Islamic banking in Malaysia can be referred to as the condensed view that these
banks mirror founded on the Islamic Shariah regulations.

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Validity Test
The internal validity of the survey is tested with the help of Cronbach’s alpha. Cronbach’ alpha is
one of the most commonly test used to test the internal consistency of the variables (Field, 2013).
The value of Cronbach’s Alpha value should be equal to or more than 0.7 to maintain the internal
consistency (reliability) of the variables.
In order to analyze the survey response all the 175 responses of 16 questions were tested with
Cronbach’s alpha. The overall Cronbach’s Alpha has a value of 0.959, signifying a high amount of
internal consistency of the variables (table 1).
Table 1: Reliability Statistics
Cronbach's Alpha N of Items
.959 16
Table 2: Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected Item-
Total
Correlation
Cronbach's
Alpha if Item
Deleted
I have sound k2wledge on
what constitutes riba’. 56.5543 130.088 .636 .959
I have firm belief that the
Islamic banking products
and services available in
the market are free from
elements prohibited by
Shariah.
56.4686 129.722 .747 .957
A 1 should avoid
conventional financial
system and products which
are Shariah 2n-compliant.
56.4800 129.010 .711 .958
A 1 should support the
Shariah-based financial
system and products.
56.3029 131.661 .705 .957

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Islamic banks staff in
Malaysia are always ready
and willing to provide
prompt and effective
services to customers.
56.4057 129.231 .827 .955
Islamic banks in Malaysia
provide good range of
savings, investment,
financing, card and wealth
management products to
customers.
56.3257 130.198 .823 .956
Islamic banks in Malaysia
ensure convenience to
customers by providing
sufficient physical
facilities such as branches,
parking lots etc.
56.4114 129.646 .805 .956
Islamic banks in Malaysia
ensure convenience to
customers by providing
sufficient internet banking-
related facilities.
56.3600 130.956 .778 .956
Islamic banks in Malaysia
generally provide
customers with true and
accurate information.
56.4114 130.140 .798 .956
Islamic banks in Malaysia
have had strong financial
performance in recent
years.
56.4171 131.796 .747 .957
Islamic banks in Malaysia
are well advertised in the
media.
56.5086 132.148 .605 .960
I believe that the Islamic
banks in Malaysia have
secure systems in place to
protect customers’
confidentiality and
privacy.
56.4057 129.116 .839 .955

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I am keen towards the
Islamic bank’s savings and
investment products such
as current, savings and
Mudharabah Investment
accounts.
56.3371 130.662 .759 .957
I am keen towards the
Islamic bank’s financing
products such as home,
vehicle and personal
financings.
56.3829 128.962 .807 .956
I am keen towards the
Islamic bank’s card
products such as debit,
credit and charge cards.
56.3829 129.491 .787 .956
I am keen towards the
Islamic bank’s wealth
management products such
as bancatakaful, estate
planning and ar-Rahnu.
56.4171 129.130 .780 .956
Table 2 presents the item total statistics for the 16 variables. The last column of the table
shows the value of Cronbach’s alpha when the item (variable) has been deleted. From the values
it is seen that the value for the variable “Islamic banks in Malaysia are well advertised in the
media” is 0.960. This means that the response to the variable is not reliable. Hence the variable
should be deleted to maintain the internal consistency of the responses. The response to all the
variables for item total statistics to be less than or equal to 0.959. Thus, there is a high amount of
internal consistency amongst the other 15 variables.

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References
Field, A. (2013). Discovering statistics using IBM SPSS statistics (1st ed.). SAGE.
Jinjiri Ringim, K. (2014). Perception of Nigerian Muslim account holders in conventional banks
toward Islamic banking products. International Journal of Islamic and Middle Eastern Finance
and Management, 7(3), 288-305.
Lujja, S., Lujja, S., Omar Mohammad, M., Omar Mohammad, M., Hassan, R., & Hassan, R.
(2016). Modelling public behavioral intention to adopt Islamic banking in Uganda: the theory of
reasoned action. International Journal of Islamic and Middle Eastern Finance and
Management, 9(4), 583-600.
Seyed-Javadin, S. R., Raei, R., Iravani, M. J., & Safari, M. (2014). Presenting a conceptual
model to explain the role of strategic management and planning in Islamic banking
competitiveness. International Letters of Social and Humanistic Sciences, 26, 46-56.