Do you want my loyalty? Then understand what drives my trust – a conventional and Islamic banking perspective

Purpose: The purpose of this research is to develop an enhanced understanding of the drivers of trust and loyalty in a conventional and Islamic banking setting. Design/methodology/approach: The study’s sample included South African retail bank customers who had Islamic or conventional products and who were 18 years or older. A field services company collected data from respondents through the distribution of self-administered questionnaires and a total of 949 questionnaires were deemed suitable for data analysis. SmartPLS 3.2.7 and Hayes Process Macro for SPSS tested the study’s hypotheses. Findings: Comparing conventional banking customers with Islamic banking customers, the path from trust to customer loyalty was statistically significantly different across customer type, while the paths between trust and customer orientation, information sharing, and service fairness were not statistically significantly different across customer type. A closer examination of the path coefficients reveals that the relationship between trust and loyalty is stronger for conventional banking customers than for Islamic banking customers. Practical implications: The findings of the study guide both conventional and Islamic banks in South Africa on how banks should redesign their purpose as the providers of financial resources to their customer segments. It highlights the need for these banks to secure a more focused approach on how to deliver financial resources and consulting services to customers in a trusting, engaging and reliable manner. Originality/value: The study provides insight into Islamic and retail bank customers’ perceptions of the drivers of trust and loyalty and how these constructs’ interrelationships differ between Islamic and conventional banking customers.