Customer satisfaction and loyalty in Malaysian Islamic banks:a PAKSERV investigation

Abstract

Purpose – The purpose of this paper is to examine the impact of PAKSERV measures on customer satisfaction and loyalty in the Malaysian Islamic banking context. Design/methodology/approach – The dimensionality of the PAKSERV scale is examined with confirmatory factor analysis. A survey approach is adopted to collect data from 300 Islamic banking customers in Kuching, Malaysia. Findings – Results reveal an excellent model fit for the PAKSERV scale in collectivist cultural context of Malaysia. All dimensions of PAKSERV are validated except reliability. The issue of non-validity of the reliability dimension in an Islamic banking context is explained by extant literature. Practical implications – Islamic banks are recommended to focus on all the PAKSERV scale dimensions to impart service quality. Given a collectivist cultural setting, a “network marketing” approach is recommended to maintain a desirable level of customer satisfaction and loyalty. Originality/value – The PAKSERV scale has been employed for the first time to investigate the service quality-loyalty path in a collectivist cultural context. The validity of the PAKSERV scale has been operationalized for the first time in a collectivist cultural context.