Determinants of Expected Service Quality in Conventional and Islamic Banking in Pakistan

Abstract

The objective of this study is to explore the determinants of expected service quality in both conventional and Islamic banking within Pakistan. A convenient sample of 800 customers was drawn from 80 branches of five conventional and five Islamic banks in Pakistan. Data collection was conducted using a self-designed questionnaire. Out of the total distributed questionnaires, 513 were completed and returned, resulting in a response rate of 64%. Of these, 38% were filled out by female customers and 62% by male customers. This data provides a foundation for analyzing customer expectations regarding service quality in both banking systems, offering insights into gender-based perceptions and overall service satisfaction. The results of the study indicate a significant relationship between expected service quality and three key determinants in conventional banks: tangibles, responsiveness, and assurance. However, a weaker relationship was observed between service quality and the determinants of reliability and empathy in commercial banks. In contrast, for Islamic banks, all five determinants—tangibles, reliability, responsiveness, assurance, and empathy—showed a significant relationship with expected service quality. These findings are valuable for both academics and policymakers, as they provide insights into the differing customer expectations and perceptions of service quality in conventional versus Islamic banking. The results can guide improvements in service delivery and help shape policies that address specific determinants of service quality, enhancing customer satisfaction in both banking systems.