1.0) Introduction and background Information:
The modern banking system shows an incredible increase in flourishing environment of the business all around the globe. The conventional banks operations are based on the manmade principles, the investing body has to pay fixed rate of interests. The banks' lending money to the customers however, getting compound interest at the repayment. They are also bound to add penalties while dealing with default payment but, clients are treated more or less as creditors and debtors. On the other hand Islamic banking focusing the modern banking system based on the principles of "Islamic Shariah".Bank appreciate lending loans to the creditworthy borrowers, they also offers the liquidity to customers. The main prominence lays dealing with the interests of public aiming towards growth mechanism doing justice to the people. The banking ethics focus on different researchers among numerous studies due to the interactions between the religions and thus, corporate banking possess major challenges in the banking environment.
According to Hughs.B, 2006, analyzes the modern banking system in accordance with the competitive state of environment dealing with the number of portfolios pertaining effects of rate of interest towards the profit maximization. Whereas, the management of risk implied by successful banks. Customers are entitled to get appropriate services and therefore, modern banks would provide them with most appropriate products and services. Haque.A.2010 also reiterate that some action plans formulated by the government and the bank authorities with dispersion of Islamic banking cultures and beliefs introducing professional courses of actions and seminars to attract customers, this will lead to future growth and enlargement of techniques and practices in a effective and efficient manner. Naughton.T, 2000 determines that modern banks are mainly influenced by the theory of capitalization as banking tends to be unique under Islamic laws necessitates specialized policy initiatives.
Haque.A, 2010 explains that diversified attributes regarding the Islamic banking might fails to influence of customers behavior, he suggests a future research to judge the behavior of the customer while switching from conventional banking to Islamic banking. Extensive research should be there to analyze up to what extent people adopting Islamic banking. The study will focus at the "Switching behavior conventional banks to Islamic Banks", what strategies banks using now days to influence the behavior of the customers. The research aims to analyze in-depth regarding how to obtain the objectives given below. A brief literature review using journals, Internet database and reports etc., however, followed by research methodology with the help of primary and secondary data therefore, necessary for analyzing the data collected. .
2.0) Aims and objectives of research:
To identify factors that has attributed the switching behavior of conventional banks to Islamic banks.
To determine the financial gains associated with Islamic banking.
To investigate the extent of adoption of Islamic banking.
The research will focus developing an In-depth research regarding the change in behavioral attributes on the other hand, the financial gains and the adoption of the Islamic banking. The competition now days exists among all financial bodies thus, the institutions falling under the financial framework focusing different strategies to enter the market keeping a pace to accelerate the profit maximization schemes. Result in financial growth among the Middle East and other south-Asian regimes.
3.0) Review of the Literature:
The term "Islamic Banking" determined as a code of conduct working significantly on principles and regulations of the shariah The sharing of the profits and losses are there excluding interest (riba) Haque.A. 2010. A niche market caters considering the needs and wants of the Muslim people, but, Islamic banking creates an environment attracting all the customers. The banking system confines with the depositor and the borrower and act as a link between both the aspects and Its regarded as more than a relationship while dealing with people Bunchuan.D. 2006. The Islamic banking marks their presence in terms of the diverse significance in many countries all around the globe. Many financial bodies provide instruments applying Islamic Shariah in few countries. The services included diversified range of commercial and investments banking, mutual insurance called as takaful and lastly the investment companies. They holdfast the place among the core financial industry among various countries also, some offshore financial centers matter of proper stability. The profit and loss paradigm tends to be different from the conventional banking. There are many features can differentiate Islamic banking from conventional banking under the paradigm of profit and loss. Due to the competitive state among both the banks the paradigm of profit and loss is controlled by Islamic banking. It's nothing religious everyone is entitled to make their own choices as conventional or Islamic bank Liu.M.H., 2009 .
Islamic banking as a new financial system proves to be more advantageous among the other conventional banking system already present in the market scenario globally. As far as a competitive state is concerned despite of new entrant it acts as a competitive advantage for the other financial institutions. The Boston Consulting group (BCG) matrix, the Islamic banking mark themselves holding back a competitive position depending upon which market they are established and also whom they are competing with. There are many financial institutions under the Islamic banking sector who act as cash cows in the BCG matrix as the country major distributor of oil to the global economies so, impose some influence acting as a competitive advantage for the financial sector. The extended network of the financial products and services leads to promotional activities among the south-east Asia regime Bunchuan.D. 2006.
The product differentiation and customer satisfaction deemed as to serve depositors, investors and lastly the individuals building values towards the competitive strategies of bank.
Noland.M, 2005, argues the relationship of the economic performances and the religion of people among the cross countries although, some commentators claims that Islam leads to the increase in the growth mechanism. Ariss.R.T. 2010 explains that, financial services under the Islamic regime shows a great success across the world however, the development of the finance industry possess high performances yielding in law, accounts, rules and regulations and at last, among the public sectors. They hold back a strong position in the market showing consistent growth and development within the framework of banking sector. The interest free financial service providers works on the concepts of the viable and sustainable aspects of the Islamic finance industry. As far as dual banking is concern the Islamic banking possess to be well above the conventional banking due to high efficiency and effective work environment. A number of reports state that the Islamic banking tends to raise more profit maximization as compared to the conventional banking among the peers having similar balance sheet frameworks Ariss.R.T, 2009. Now day's modern bank is paying more attention towards the Islamic banking segment as they are more interested in the new style of the banking. The gulf Corporation countries also mark increased growth over the last few years as the strong economy attracts the investors from all over the world to support and enters into the new financial system called Islamic banking system Matousek.R, 2011. The western banks engaged in Islamic finances capturing powerful market with stabilized degree of overall performance. They are playing their roles in a significant and effective manner gaining more access to the other economies and proving to be beneficial for the economy.
Ismail.A.Z.H, 2009, explains that the satisfaction of the customer is the main aspect of any organization, while understanding the need for motivation and needs and wants give rise to the formulation of the appropriate strategies therefore, in order to gain the customer satisfaction organization will work out immensely to provide them with appropriate products and services. The quality standards are taken into consideration and however, when the organization timely measures the performances while obtaining proper feedbacks of the services proves to be beneficial. The customer's perception plays a vital role while coinciding with the organizational strategies, the expectation and the performance management therefore helps boosting the morale and ignites the degree of motivations for both the customer and the operational level of the organization. The better service or quality service helps the retention of the customer and therefore, act as a link between the fundamental and improved service offerings. The satisfaction of the customer on the perceived quality possesses key aspect for the performance as whole. The paper argues that there are three coefficients indicting the positive approach of the perception and quality, social and religious aspect and service availability. The perception on the Islamic banking tends to be high as far as the values of the coefficients are concerned. Higher the value of the customer in perceived environment leads to high standards of quality service of Islamic banking.
"The strategy of switching behavior of conventional banks to Islamic banks ", as the Islamic banking sector getting more influence from the strong economy position of the gulf countries. The Islamic finance sector attracts more individuals, investors and organizations to enjoy the high quality service standards of the banks. They are spreading all around the world doing mergers and acquisitions. The Islamic banking concept possesses dual impacts over the niche markets and other markets also keeping a proper coordination of the expectation and performance of the customers. The competitive advantage over the conventional banks helping them to get self-motivations and therefore, we can see tremendous performance management at all the levels. The rules regulated by the Islamic finance sector based on the principle of shariah so, they are getting 100 percent Muslim support and also support from other religions because of the service quality and proper assistance. The research will focus the primary resources and thus, the survey questionnaire helps in coinciding with the switching behavior of the people, determining the financial gain associated with banking and to what extent people adopt Islamic banking. A logical analysis on the basis of these facts helps to correlate both the aspects.
4.0) Methodological Approach
An exploratory study focusing on the basis of empirical evidences regarding the strategies formulated by the Islamic banking regarding factors credited on selections techniques. The gathered data with the help of the primary and secondary approaches therefore, helps in analyzing the main objectives of the research. A non-probability sampling technique of convenience sampling is there having a population sample of 500 respondents. Pilot testing techniques are taken into consideration to overcome the requirement of research. In-depth analysis of the research topic however, using the cross-tabular implications and rank tests. Likerts' scale is used as an instrument which helps the respondent provided, with more and more choices or options to make selections. Both the qualitative and quantitative data helps to analyze the results, qualitative data been collected defines the true concern of the problem while undertaking the identification of attributes and financial gains associated with banking system through the survey on sample population. The quantitative data collected with the help of various financial reports portraying the need of banking. Number of business journals from business databases, in-depth case studies and data sets from the enormous resources while acquiring proper subscriptions. The study will focus on both the research approaches. The important facts of research methodology helps setting primary objective or on the other hand key aspects of research are determined.
The main source of the data is extracted from the internal and the external factors dealing with the former with already proposed data for further processing and thereafter, the latter external factors inclusive of already published material, journals from the library services and other online databases. However, in order to filter the data supporting the strategies for switching behavior through different company reports accessed online.
The execution of the data while using high standards through various facts, figures, tabular presentation, pie-charts and histograms to demonstrate change in behavior aspects i.e from conventional banking to Islamic banking.
Research process
[Source: Secondary data: Kress 2008]
The research process flows significantly through books, journals, and published research presented by means of secondary data (brief literature review) for the better research findings. Primary data is executed to analyze the behavioral approaches and providing insights into different customers adapting the Islamic banking. The research design will formulate a proper draft of the research.
Secondary research
Internal
External
Requires Further Processing
Published Material
Ready to use
[Source: Secondary data: Kress 2008]
Target population
The focus on the population regarding all age group people, some facets are there while dealing with the age factor which in return proves to be beneficial while converting them forming a quantitative data for analysis.
Sampling method
The Non-probability sampling is different from those of probability sampling as its cheapest method of obtaining efficient and effective data. One can use the method even if the frame sets not available, the population structure dealt with immense courage. Convenience sampling is when population of people while promptly asking them to fill the questionnaire round shops, restaurants, and other public places this, is one of the most feasible.
Also, there is access towards data the barriers regarding the rules and regulation are considered, the ethical consideration while keeping copyright material away from research. As data execution will be drawn on the basis of the secondary and primary data of research.
Data Analysis
The data analyzes coincide with the relationship between significant quantitative findings and thereafter, matching them with qualitative information extracted from various sources books, journals, e-books, Company reports, Business database, Library service and newspaper articles etc. for the research and will try to work on the same if there is any mismatch between the information gathered through the primary and secondary resources. If there is any mismatch between the two then further amendments are there so, that no such mismatches resist. On the other hand, some unreliable facts or data posing adverse effect regarding the data collected as these will further effect the analyzes of the research. So, in order to get rid of such false and unreliable data in-depth researches of the resources are there making sure all of them is reliable and appropriate. Data analysis helps to strengthen acting as a proper linkage coinciding between two researches i.e. qualitative and the quantitative.
5.0 Programme of work
The schedule for dissertation will follow with utmost adherence while writing the research in accordance with proper formatting/structure pre-defined during the certain period of research. The work is planned in an effective and efficient way starting with formulating a questionnaire and start distributing it to the people. As the research will follow convenience sampling under non probability approach so, respondents are selected. Collection and compilation of the data tends to be most important part of the thesis.
Serial No.
Task
Deadline
1.
Collection of Data
May
2.
Qualitative Analysis
(Literature Review)
June
3.
Quantitative analysis
July
4.
Finalizing the results into Thesis
August
