Diffusion of Islamic Retail Banking Services among Malaysian Banking Consumers

Islamic Banking refers to the system of banking or banking operations that is in consonance with Shari'ah law and guided by Islamic economics. Islamic banking prohibits usury (riba), the collection and payment of interest as in conventional banking; instead it promotes profit-sharing in the conduct of banking business. The main aim of this study is to identify factors that influence the adoption of Islamic retail banking services among the banking consumers of Malaysia, specifically in the urban and sub urban regions of Malaysia. Islamic banking has evolved as a new reality in the international financial scene since 1970s. Since then numerous studies have been undertaken by researchers to examine issues related to Islamic banking across the globe. However past literature, revealed a lack of marketing studies on Islamic retail banking services. Roger's innovation diffusion model underpins the conceptual development in the paper. A set of survey questionnaires will be developed and distributed to 300 randomly selected participants. Multiple analytical techniques including factor analysis (SPSS), t-test, Friedman test, multiple regression analysis will be used to analyze the data and test the model. This study aims to fill the gap in the literature by providing concrete evidence on retail Islamic banking. Furthermore, comparative study on factors influencing consumer adoption behavior on Islamic banking services between Malaysia's urban and sub urban regions is important to generate more compelling insights. The findings would also provide knowledge relevant to theoretical building on Islamic banking research.