Prioritization of Customers’ Preferences in Islamic banking system: An Artificial Intelligence Approach using Kano Analysis

Abstract

Purpose: There are variety of factors that influence a customer’s selection
of a bank in general. However, there is a large gap in the literature that
covers a customer decision to choose between an Islamic bank and a
conventional one. To this end, we try to fill this gap by using a case study
in Morocco to analyse factors contributing to a consumer’s bank selection.
Methodology: The analysis presented in the paper is using a case in
Morocco and applying an artificial intelligence method using KANO
analysis. We apply it in three stages. First, customers preferences
are identified and classified according to their impact on customer’s
satisfaction. Second, a Satisfaction Increasing Index (SII) is formulated.
Third a Dissatisfaction Decreasing Index (DII) is formulated.
Findings: The analysis shows that Islamic banking attributes (Provision
of profit-loss sharing financing , Operating on Islamic law and principles,
Staff knowledge of Islamic banking, Provision of interest-free loans)
are required by customers in selecting an Islamic bank as opposed to
a conventional bank. However, these requirements do not necessarily
contribute to increasing customers’ satisfaction.
Significance: To the best of our knowledge, this is perhaps the first paper
which uses a Kano analysis in the context of consumers selection of an
Islamic or Conventional bank Research Limitations/Implications: This
Paper has the main limitation of being conducted only in Morocco. It will
be interesting to see how the results would change if the country context
is changed.
Practical and Social Implications: The findings using these techniques,
should help financial institution, whether it be Islamic or conventional
banks to tailor their offerings to match consumers requirements.
KAUJIE Classification: L3,
JEL Classification: D12, N35