Analysing service quality in the UAE Islamic banks
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Hussein A. Hassan Al-Tamimi is Associate Professor of Finance at Sharjah University, where he teaches financial management, corporate finance, investments and financial markets. His current research focuses on capital budgeting, capital structure, risk management practices, service quality and management of financial institutions.
Abdullah Al-Amiri is Deputy Department Head, Dubai Islamic Bank, Fujairah Branch, United Arab Emirates. His current research focuses on service quality and accounting information systems.
Abstract It is generally agreed that service quality in banking is a significant issue facing this industry. The objective of this study is to analyse service quality in the UAE Islamic banks and to compare service quality between the Dubai Islamic Bank and the Abu Dhabi Islamic Bank. Linear regression results indicate that there was a positive and statistically significant relationship between overall service quality and the SERVQUAL dimensions in the UAE Islamic banks. It was also found that empathy and tangibles were the most important dimensions. ANOVA results showed that there was no significant difference between the level of overall service quality in the Dubai Islamic Bank and the Abu Dhabi Islamic Bank. ANOVA results also indicate that there was no significant difference in the level of service quality in the UAE Islamic banks based on the customer’s gender and nationality. The results indicate, however, that there was a significant difference in the level of service quality in the UAE Islamic banks based on the customer’s age, education and number of years with the bank. Keywords
SERVQUAL, services quality, Islamic banking services, empirical analysis
INTRODUCTION
Hussein A. Hassan Al-Tamimi Department of Business Administration, College of Business and Management, University of Sharjah, PO Box 27272, Sharjah, United Arab Emirates Tel. +971 6 5050557 e-mail: [email protected]
Service quality is about meeting customers’ needs and requirements, and how well the service level delivered matches customer expectations. In banking, it is generally agreed that service quality is a significant issue facing this industry. Raddon reported in this regard that 40 per cent of customers switching financial institutions in the USA did so because of service problems.1 Allred and Addams also indicated that 50 per cent of total respondents they surveyed reported that they had stopped using a financial service provider because of poor service performance.2
# Henry Stewart Publications 1479–1846 (2003)
Vol. 8, 2 119–132
The UAE Islamic banks consist of two banks: the Dubai Islamic Bank and the Abu Dhabi Islamic Bank. The number of branches of the Dubai Islamic Bank is larger than that of the Adu Dhabi Islamic Bank. For example in 2001, the first had 13 branches, compared with eight branches in the second. This is mainly because the Abu Dhabi Islamic Bank is a new bank, established in 1997, whereas the Dubai Islamic Bank was established in 1975. In 2001, the number of branches of the UAE Islamic banks was 21, compared
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