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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
{Insert Table 1}
Table 1 shows correlation between customer satisfaction and performance of Islamic
banks in Pakistan. It reflects a weak negative relationship between customer satisfaction
and performance of Islamic banks, as results are contradictory to hypothesis and it rejects
the null hypothesis. However, the magnitude of the relationship is assessed by regression
model. The results of regression are presented in table 2.
{Insert Table 2}
Table 2 reflects the results of IBCS-IBPRF model. The coefficient of determination is
0.001, p-value (0.775) and F-statistics (0.102). It is reported that customer satisfaction
has no significant (p=0.775) impact on the performance of Islamic banks in Pakistan. It
reflects variation (influence) of customer satisfaction on the performance of Islamic
banks in Pakistan. It was hypothesized that customer satisfaction is positively related to
bank performance. Interestingly, it is found that there is weak negative relationship
between customer satisfaction and performance of the Islamic banks. It identified the gap
prevailing in the Pakistani banking sector due to lack of customer orientation and
awareness among bank customers. The findings are in line with the literature as it is
reported that customers of Islamic banks have awareness but showed dissatisfaction
regarding some of the products of Islamic banks (Naseer, Jamal & Al-Khatib, 1999).
However, the results are contradictory to the exiting literature as it is found that customer
satisfaction helps to increase the bank performance due to greater profitability, increased
market share and more return on investments. Similarly, customer satisfaction generates
positive outcomes for long-term profitability (Baker & Sinkula, 1999). A positive link
between customer satisfaction and bank performance is reported by a number of
researchers (Swan & Combs, 1976; Hallwell, 1996; Gritti & Foss, 2007).
5. Conclusion
Islamic banks entered in Pakistani banking industry at the inception of 21 st century and
proved a successful experience due to remarkable progress. This study investigates the
relationship between customer satisfaction and performance of Islamic banks in Pakistan.
The researcher collected data from 864 respondents of 72 branches of selected Islamic
banks. The data were collected by a structured questionnaire developed in the light of
existing literature. The responses were analyzed through SPSS 15.0 Version to assess the
influence of customer satisfaction on bank performance. The results indicate that there is
a weak negative relationship between customer satisfaction and performance of Islamic
banks. Islamic banks should focus on customer orientation to have satisfied customers to
reduce the gap between customer satisfaction and bank performance. It is suggested that
Islamic banks should create awareness among bank customers by attractive advertising
tactics to attract greater number of customers. There is lack of customer orientation as
well as lack of awareness about customer rights. Bankers are required to implement an
effective mechanism to measure the customer satisfaction for corrective action. Bankers
should introduce new, diversified and marketable products to meet the requirements of
the different segments of the economy on the basis of gender, age, qualification etc. This
study attempts to enhance the understanding regarding customer satisfaction and
performance of Islamic banks in Pakistan.
COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 185
JANUARY 2011
VOL 2, NO 9