ISSN: 2226-6348
Open access
Islamic banking has become a cornerstone of Malaysia’s financial landscape, offering an alternative financial system that aligns with Shariah principles. Despite its significant growth and global recognition, the adoption of Islamic banking products in Malaysia remains inconsistent, with noticeable gaps in consumer awareness, trust, and usage. This study aims to explore the key factors influencing the selection of Islamic banking products among Malaysian consumers, addressing critical issues such as religious beliefs, perceived financial benefits, service quality, social influences, and trust. The research employs a qualitative methodology, utilizing content analysis of journal articles sourced from Web of Science and Scopus database and supported by articles in Malaysian citation-indexed journals. Findings indicate that while religious adherence remains a primary motivator, factors such as financial benefits, transparency, and technological convenience significantly impact consumer decisions. The study also highlights the underexplored role of non-Muslim consumers and the need for inclusive marketing strategies. From a practical perspective, the findings suggest that Islamic banks must enhance transparency, leverage digital technologies, and target diverse demographic groups to foster greater adoption. The originality of this study lies in its comprehensive synthesis of existing research and its emphasis on emerging trends such as fintech and the inclusion of non-Muslim consumers. These insights provide actionable recommendations for policymakers and practitioners, ensuring the sustained growth and competitiveness of Malaysia's Islamic banking sector.
Abasimel, N. A. (2023). Islamic banking and economics: concepts and instruments, features, advantages, differences from conventional banks, and contributions to economic growth. Journal of the Knowledge Economy, 14(2), 1923-1950.
Abdul Nasir, N. (2015). The factor that influences consumer on patronization of Islamic Bank.
Abid, A., & Jie, S. (2023). Understanding farmers’ decision-making to use Islamic finance through the lens of theory of planned behavior. Journal of Islamic Marketing, 14(4), 1084-1106.
Adnan, A. A., Mohd Nasir, N. A., & Mohd Yusof, D. (2013). Bank choice behaviour among Malaysian Muslims: A qualitative approach. International Research Journal of Social Sciences, 3(2), 48-61.
Ali, Q., Parveen, S., Aspiranti, T., Nurhayati, N., & Rusgianto, S. (2024). Barriers to the adoption of Islamic banking: a bibliometric analysis. International Journal of Ethics and Systems, 40(3), 628-650.
Allah Pitchay, A.B., Mohd Thas Thaker, M.A.B., Azhar, Z., Mydin, A.A. and Mohd Thas Thaker, H.B. (2020), "Factors persuade individuals’ behavioral intention to opt for Islamic bank services: Malaysian depositors’ perspective", Journal of Islamic Marketing, Vol. 11 No. 1, pp. 234-250. https://doi.org/10.1108/JIMA-02-2018-0029
Amin, H., Abdul Rahman, A. R., Abdul Razak, D., & Rizal, H. (2017). Consumer attitude and preference in the Islamic mortgage sector: A study of Malaysian consumers. Management Research Review, 40(1), 95-115. https://doi.org/10.1108/MRR-07-2015-0159
Amin, H., Abdul Rahman, A.R., Abdul Razak, D., and Rizal, H. (2017), "Consumer attitude and preference in the Islamic mortgage sector: a study of Malaysian consumers", Management Research Review, Vol. 40 No. 1, pp. 95-115. https://doi.org/10.1108/MRR-07-2015-0159
Amin, H., Abdul-Rahman, A.-R. and Abdul-Razak, D. (2016), "Malaysian consumers’ willingness to choose Islamic mortgage products: An extension of the theory of interpersonal behaviour", International Journal of Bank Marketing, Vol. 34 No. 6, pp. 868-884. https://doi.org/10.1108/IJBM-06-2015-0099
Andespa, R., Yeni, Y. H., Fernando, Y., & Sari, D. K. (2024). A systematic review of customer Sharia compliance behaviour in Islamic banks: determinants and behavioural intention. Journal of Islamic Marketing, 15(4), 1013-1034.
Asyari, Hoque, M. E., Hassan, M. K., Susanto, P., Jannat, T., & Mamun, A. A. (2022). Millennial generation’s Islamic banking behavioral intention: the moderating role of Profit-Loss sharing, perceived financial risk, knowledge of Riba, and marketing relationship. Journal of Risk and Financial Management, 15(12), 590.
Auwal, S. (2022). The Recruitment Criteria Of Sharia Committee Members Of Islamic Banks In Malaysia: An Analysis Based On Adab Al-Fatwa Wa Al-Mufti Wa Al-Mustafti By Al-Nawawi (Doctoral dissertation).
Ayedh, A. M., Mahyudin, W. A. T., Abdul Samat, M. S., & Muhamad Isa, H. H. (2021). The integration of Shariah compliance in information system of Islamic financial institutions: Qualitative evidence of Malaysia. Qualitative Research in Financial Markets, 13(1), 37-49.
Babar, S. U., & Javed, A. Impact of Islamic Motives, Serviceability & Customers Awareness on Customer Satisfaction from Islamic Banks. Journal of Philosophy, Culture and Religion 26, 5-12.
Dawami, Q. (2020). Factors influencing the preference of customers towards Islamic banking: Evidence from Malaysia. Journal of Islamic Economic Laws, 3(1), 48-67.
ElMassah, S., & Abou-El-Sood, H. (2022). Selection of Islamic banking in a multicultural context: the role of gender and religion. Journal of Islamic Marketing, 13(11), 2347-2377.
Ganesan, Y., Allah Pitchay, A. B., & Mohd Nasser, M. A. (2020). The role of ethical practices and transparency in enhancing trust in Islamic banking: Evidence from Malaysian consumers. Journal of Islamic Marketing, 11(4), 876-893. https://doi.org/10.1108/JIMA-02-2019-0038
Hasan, A. F. S., Karbhari, Y., & Ahmed, H. (2021). Religious Governance, Regulation and Standardisation: Evidence from Malaysian Islamic Banks. International Journal of Business Governance and Ethics, 15(1).
Ibrahim, M. A., Fisol, W. N. M., & Haji-Othman, Y. (2017). Customer intention on Islamic home financing products: an application of theory of planned behavior (TPB). Mediterranean Journal of Social Sciences, 8(2), 77-86.
Jeffrey, R., Pires, G., & Rosenberger Iii, P. J. (2024). Home loans and Muslims–an Australian perspective. Journal of Islamic Marketing.
Junaidi, J. (2021). The awareness and attitude of Muslim consumer preference: the role of religiosity. Journal of Islamic Accounting and Business Research, 12(6), 919-938.
Junaidi, J., Anwar, S. M., Alam, R., Lantara, N. F., & Wicaksono, R. (2023). Determinants to adopt conventional and Islamic banking: evidence from Indonesia. Journal of Islamic Marketing, 14(3), 892-909.
Junaidi, J., Wicaksono, R., & Hamka, H. (2022). The consumers’ commitment and materialism on Islamic banking: the role of religiosity. Journal of Islamic Marketing, 13(8), 1786-1806.
Khursheed, A., Fatima, M., & Mustafa, F. (2021). Customers’ Perceptions toward Islamic Banking in the Gulf Region. Turkish Journal of Islamic Economics, 8(1).
Kismawadi, E. R. (2024). Contribution of Islamic banks and macroeconomic variables to economic growth in developing countries: vector error correction model approach (VECM). Journal of Islamic Accounting and Business Research, 15(2), 306-326.
Lebdaoui, H., Chetioui, Y., & Harkat, T. (2024). Propensity towards Islamic banking among non-users: a mixed-methods analysis. Journal of Financial Services Marketing, 29(1), 45-66.
Mahdzan, N.S., Zainudin, R. and Au, S.F. (2017), "The adoption of Islamic banking services in Malaysia", Journal of Islamic Marketing, Vol. 8 No. 3, pp. 496-512. https://doi.org/10.1108/JIMA-08-2015-0064
Mariadas, P. A., & Murthy, U. (2017). Factors influencing the adoption of Islamic banking in Malaysia. International Journal of Business and Management, 12(11), 187. DOI:10.5539/IJBM.V12N11P187
Mohd Thas Thaker, H., Sakaran, K.C., Nanairan, N.M., Mohd Thas Thaker, M.A. and Iqbal Hussain, H. (2020), "Drivers of loyalty among non-Muslims towards Islamic banking in Malaysia: Evidence from SmartPLS", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 13 No. 2, pp. 281-302. https://doi.org/10.1108/IMEFM-07-2018-0211
Mustapha, N., Mohammad, J., Quoquab, F., & Salam, Z. A. (2023). “Should I adopt Islamic banking services?” Factors affecting non-Muslim customers’ behavioral intention in the Malaysian context. Journal of Islamic Marketing, 14(10), 2450-2465.
Naseh, H., & Ghalia, B. (2024). The Impact of Legislative Environment on the Development of Islamic Banking: A Comparative Study between Malaysia and Afghanistan. AL-HIKMAH: International Journal of Islamic Studies and Human Sciences, 7(4), 31-54.
Nugraheni, P., & Widyani, F. N. (2021). A study of intention to save in Islamic banks: the perspective of Muslim students. Journal of Islamic Marketing, 12(8), 1446-1460.
Omar, W. A. W., & Rahim, H. A. (2016). Perception of Non-Muslims towards Islamic banking revisited: SEM approach. Mediterranean Journal of Social Sciences, 7(1).
Rahmayati, R. (2021). Competition Strategy In The Islamic Banking Industry: An Empirical Review. International Journal Of Business, Economics, And Social Development, 2(2), 65-71.
Relano, F. (2023). Ethical and Islamic banking compared from a time-based perspective. Journal of Business Ethics, 188(4), 795-805.
Reni, A., & Ahmad, N. H. (2016). Application of theory reasoned action in intention to use Islamic banking in Indonesia. Al-Iqtishad: Journal of Islamic Economics, 8(1), 137-148.
Sheth, J. (2021). New areas of research in marketing strategy, consumer behavior, and marketing analytics: the future is bright. Journal of Marketing Theory and Practice, 29(1), 3-12.
Tanrikulu, C. (2021). Theory of consumption values in consumer behaviour research: A review and future research agenda. International Journal of Consumer Studies, 45(6), 1176-1197.
Zakaria, M. H., Zainudin, Z., & Hadi, A. R. (2021). Assessing customer selection criteria of Islamic banking in Malaysia. J Environ Treat Techn, 9(1), 44-49.
Zulkepli, M. I. S., Hamid, N. B. A., Karim, H. H., & Rus, M. F. C. (2025). A Review on Factors of Choosing Islamic Banking Products among Malaysian. International Journal of Academic Research in Progressive Education and Development, 14(2), 2085–2100.
Copyright: © 2025 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode