ANALYSIS OF FACTORS THAT INFLUENCE THE DECISION TO

USE SHARIA BANK SERVICES

Arranged by :

Saraazura Jamalalmuailu

International Program of Islamic Economics and Finance

Universitas Muhammadiyah Yogyakarta

 ANALYSIS OF FACTORS THAT INFLUENCE THE DECISION TO USE SHARIA BANK
SERVICES

Saraazura Jamalalmuailu

International Program of Islamic Economics and Finance

Universitas Muhammadiyah Yogyakarta

ABSTRACT

Islamic banking is currently a hot topic of discussion throughout the world, especially in Muslim
countries. The needs of Muslim countries for banking products that are based on sharia principles are
also increasing along with public knowledge about prohibition of interest. Especially in Indonesia
with a majority of the population is Muslim, of course the need for banks that use Islamic basis is also
high. But the high demand for Islamic banking must also be adjusted to the true value of Islam. This
study aims to find out how enthusiastic Muslim students are with Islamic banking itself, and also to
find out what factors influence a person's decision to use Islamic banking or other banking so that in
the future it can be an evaluation of Islamic banking to develop and also advance Islamic banking in
Indonesia. Banking that is conventional itself still dominates in Indonesian society. The data used in
this study are primary data obtained from questionnaires and processed using descriptive statistical
analysis through Microsoft Excel applications.

Keywords: Islamic, banking, muslim countries

 1. Introduction
1.1 Background

With a population of 264 million in 2017 making Indonesia ranked 4th among the most
populous countries, Indonesia accounts for at least 3.52% of the world's population. Based on Global
religious future data in 2010, 87% or 209.12 million people of Indonesia's population are
Muslim[ CITATION Kus19 \l 14345 ]. With the largest Muslim population in the world, Indonesia should
improve important facilities based on Islam or Sharia in terms of infrastructure and services for the
Muslim community itself such as Islamic banking. The first Islamic bank in Indonesia itself began
operating in 1992, namely Bank Muamalat Indonesia. Since then, sharia banking has begun to
experience growth, until 2020 there were 14 registered Sharia Commercial Banks registered
throughout Indonesia.

The existence of sharia-based banking itself is urgently needed by the Indonesian Muslim
community, to facilitate them in carrying out their daily transactions. In conventional banking the
savings and loan systems are run using the interest system that has been set by the relevant bank. The
system of interest or also in Islam commonly called usury is prohibited and the law is haram as
explained in the Al-Quran verses 278-280 below;

ۖ ‫يَاأَيُّهَاالَّ ِذينَآ َمنُوااتَّقُوااللَّهَ َو َذرُوا َمابَقِيَ ِمنَالرِّ بَاإِن ُكنتُم ُّم ْؤ ِمنِينَفَإِنلَّ ْمتَ ْف َعلُوافَأْ َذنُوابِ َحرْ بٍ ِّمنَاللَّ ِه َو َرسُولِ ِه‬
ْ ُ‫َظلِ ُمونَ َواَل ت‬
َ َ‫ظلَ ُمونَ َوإِن َكانَ ُذو ُع ْس َر ٍةفَنَ ِظ َرةٌإِلَ ٰى َم ْي َس َر ٍة ۚ َوأَنت‬
pَ ‫ص َّدقُواخَ ْيرٌلَّ ُك ْم ۖ إِن ُكنتُ ْمتَ ْعلَ ُم‬
‫ون‬ ْ ‫َوإِنتُ ْبتُ ْمفَلَ ُك ْم ُر ُءوسُأ َ ْم َوالِ ُك ْماَل ت‬

It means: "O believers, leave what is realized usury, if you are believers. So if you do not leave,
declare war on Allah and His Messenger. So if you repent, then for you are the principal of your
wealth. Do not commit wrongdoings any more. And if there are people who are in trouble, then delay
until it comes to convenience. And if you give charity, then it is good for you, if you know. " (QS Al-
Baqarah: 278-280).

In 2011 the average set of Islamic banks grew by 40%, this is a pretty big number compared to
other countries, which is 10-15%. In 2011 sharia banking was recorded at Rp 126 trillion. The
potential of Islamic banking in Indonesia is very promising given the very large Muslim population.
Compared to other countries Indonesia is also more because Indonesia has its own national sharia
ideology.[ CITATION Ban11 \l 14345 ].
 According to Bank Mandiri Syariah Commissioner Mulya Effendi Siregar said that the market
share of Islamic banking in Indonesia is still small at around 5.1% compared to other countries such as
Malaysia and Bhrain which have reached 24% and 29%. Indonesia accounts for 1.6% market share at
the global level while Malaysia has reached 9%, therefore Indonesia is still unable to compete with
Islamic banking in other countries. Indonesia must be able to improve the quality of human resources
in Islamic banking in order to be competent and competitive.[ CITATION Her18 \l 14345 ].

Not only lagging behind Malaysia which has a Muslim population far below Indonesia, in fact
Indonesian Islamic banking is still far behind Thailand and also Australia which is not a Muslim
majority country. Thailand itself contributes at least 25% of global halal food needs, while Australia is
known as a halal beef exporter in the world. Indonesia should improve Islamic finance in the real
sector in addition to improving the quality of Islamic banking itself[ CITATION Pit18 \l 14345 ].

The market share of Islamic banking in Indonesia, which only reaches 8.4% of the national
finance needs to be evaluated so that the target can be developed [ CITATION Pit18 \l 14345 ]. Indirectly,
many Muslim residents in Indonesia still use conventional banks. As a country with the largest
Muslim population in Indonesia, it should be able to become an example for other countries in the
future, so it is very important to conduct a study of the factors that influence the public to use Islamic
banking products. With this, it is expected to be able to help Islamic banking to improve services in
order to attract broader public interest and make Indonesia not only the country with the largest
Muslim population but can also become the country with the best Islamic banking system that can be
an example for other countries in the world.

1.2 Research Questions

1. Does the ease of bank access and bank services affect the customer's decision to use
Islamic banks?
2. Do bank facilities and performance influence the customer's decision to use Islamic
banks?
1.3 Research Objective

1. To test whether the ease of bank access and bank services has a significant influence on
the customer's decision to use Islamic banking products.
2. To test whether the bank's facilities and performance significantly influence the
customer's decision to use sharia banking product services.
2. Literature Review
2.1 Sharia Bank
In accordance with Law No. 21 of 2008 concerning Islamic BankingSharia Bank is a
bank that carries on business activities based on sharia principles, or Islamic legal principles
regulated in the fatwa of the Indonesian Ulema Council such as the principle of justice and
balance ('adl wa tawazun), benefit (maslahah), universalism (naturalyah), and not containing
gharar , maysir, usury, wrongdoing and haram objects. In addition, the Sharia Banking Law
also mandates Islamic banks to carry out social functions by performing functions such as the
Baitul Mal institution, which receives funds from zakat, donations, alms, grants, or other social
funds and channel them to waqf managers (nazhir) as desired. endowment (waqf).

2.2 Objectives and Functions of Islamic Banking

According to the Sharia Banking Financial Services Authority (OJK) in conducting its
business activities it is based on Sharia Principles, economic democracy, and prudential
principles. Islamic Banking aims to support the implementation of national development in
order to improve justice, togetherness, and equitable distribution of people's welfare.

While the functions of Islamic banking are:

a. Islamic banks and UUSs are required to carry out the functions of collecting and distributing
public funds.
b. Sharia Banks and UUS can carry out social functions in the form of Baitul Mall institutions,
which receive funds from zakat, donations, alms, grants or other social funds and channel them
to zakat management organizations.
c. Islamic banks and UUS can collect social funds derived from endowments of money and
channel them to the management of endowments (nazhir) in accordance with the wishes of
endowments (endowments).
d. The implementation of social functions as referred to in paragraph (2) and paragraph (3) is in
accordance with the provisions of the legislation.
Difference between Sharia and Conventional Banking

No Conventional Bank Syariah Bank

1. Value free Invest in a halal business

2. Interest system On the basis of profit sharing, profit margins

and fees

3. The amount of interest remains The amount of profit sharing varies depending
on business performance

4. Profit oriented (world happiness Profit and falah oriented (world and hereafter
only) happiness)

5. Debtor-creditor relationship Relationship pattern:

1. Partnership (musyarakah and

mudharabah)
2. Seller - buyer (murabaha, salam and
istishna)
3. Rent a lease (ijarah)
4. Debtor - creditor; in the sense of equity
holder (qard)

6. There is no similar institution There is Dewan Pengawas Syariah (DPS)

with the Sharia Supervisory
Board

2.3 Customer Decision Theory

 According to Sondang P. Siagian in Isman's blog decision making is a systematic approach to the
nature of the alternatives faced and taking action which according to the calculation is the fastest
action.

According to Ulinuha in his thesis The process of making decisions to use services performed by
customers has several criteria, namely;

1. Analyze needs and desires

2. Search for information
3. Assessment and selective towards alternatives
4. Decision to use services
5. Behavior after using services

3. Research Methodology

The purpose of this study was to determine the effect of the independent variables on the
dependent variable. The data used in this study is to use primary data obtained through a questionnaire
given to respondents containing data about the effects caused by bank service facilities, easy bank
access, bank services, and also bank performance with a total sample of 35 students taken from
students from various majors. This research is a quantitative study using statistical descriptive data
analysis with the help of Microsoft Excel applications.

Research Variable

In this study there are one dependent variable and two independent variables;

a. Dependent variable
The dependent variable in this study is the bank that the respondent uses. 0 for
conventional bank users and 1 for Islamic bank users.
b. Independent variable
1. Variable x 1 is the ease of bank access and bank services, with a range of values of at
least 2 and a maximum of 10.
2. Variable x 2 is a bank facility and performance with a minimum value range of 2 and
a maximum of 10.
 4. Results and disscusion

The potential of Islamic banking in Indonesia is comparable to the high number of the
Muslim population itself, but public knowledge about Islamic banking itself is still low. Of the 35
Muslim respondents who were given the questionnaire only 12 people or approximately 34% and the
rest use conventional banking. This research data processing uses descriptive statistical analysis using
Microsoft Excel applications. The independent variable taken for this study is the level of bank access
and bank services (column 1) and the second is bank facilities and performance (column 2).
Descriptive statistical analysis is used to compare between each independent variable used. The
dependent variable is divided into 2 namely students with conventional banking and Islamic banking.

1. Results of descriptive analysis of sharia banking statistics

Column1   Column2  

7,6666666
Mean 7,333333333 Mean 7

Standard Error 0,527046277 Standard Error 0,6435382

Median 8 Median 8

Mode 8 Mode 8

2,2292817
Standard Deviation 1,825741858 Standard Deviation 2

4,9696969
Sample Variance 3,333333333 Sample Variance 7
 3,2116597
Kurtosis 1,774909091 Kurtosis 3

Skewness -1,453954425 Skewness -1,5054614

Range 6 Range 8

Minimum 3 Minimum 2

Maximum 9 Maximum 10

Sum 88 Sum 92

Count 12 Count 12

Largest(1) 9 Largest(1) 10

Smallest(1) 3 Smallest(1) 2

Confidence 1,4164180
Level(95,0%) 1,160021033 Confidence Level(95,0%) 3

2. Results of descriptive analysis of conventional banking statistics

Column1   Column2  

8,30434 8,21739
Mean 8 Mean 1

Standard Error 0,31077 Standard Error 0,28780

 4 6

Median 8 Median 8

Mode 8 Mode 8

1,49041 1,38026
Standard Deviation 7 Standard Deviation 7

2,22134 1,90513
Sample Variance 4 Sample Variance 8

Kurtosis -0,33918 Kurtosis -1,27456

0,14064
Skewness -0,66567 Skewness 8

Range 5 Range 4

Minimum 5 Minimum 6

Maximum 10 Maximum 10

Sum 191 Sum 189

Count 23 Count 23

Largest(1) 10 Largest(1) 10

Smallest(1) 5 Smallest(1) 6

Confidence 0,64450 0,59687

Level(95,0%) 5 Confidence Level(95,0%) 2
 The results of the mean column 1 of the dependent variables of Islamic and conventional
banking are 7.33 and 8.30. Conventional banking has a higher value than Islamic banking this means
the level of ease of access and also conventional banking services are felt better by the respondents.
Ease of access includes the availability of bank branches in strategic locations and easily accessible by
users, such as the need for an ATM to withdraw money at any time wherever the user needs, in this
case it can be seen that Islamic banking users have lower satisfaction with ease of bank access used.
This test also applies to the services that related banks offer, friendly service is also very important for
users when doing activities that directly interact with the bank employees themselves.

In data processing similar variables also show that the minimum value of Islamic banking
is 3 and conventional banking is 5. This reinforces the assumption that Islamic banking has lower
access convenience than conventional banking. The level of satisfaction with ease of access and also
bank services can also be seen from the highest value point on this variable, the highest point of sharia
banking is at point 9 and conventional banking at point 10 shows that the highest satisfaction is felt by
respondents who use conventional based banking.

The mean results of the second dependent variable namely bank facilities and performance
show that Islamic banking has 7.66 points and conventional banking has 8.21 points. This shows that
the facilities provided by conventional banks are relatively more satisfying than the facilities provided
by Islamic banking. The intended facility can be in the form of products provided in the banking or
physical facilities provided. The minimum value of the analysis of this variable is 2 points for Islamic
banking and 6 for conventional banking shows there are still users of Islamic banking who are not
satisfied with the services provided by the bank. For the maximum value, both of them have the same
points, which is 10, it shows that both of them have users who are very satisfied with the facilities and
the bank's performance that they are using.

The data above shows that the low percentage of users of sharia banking from this study is
quite diverse ranging from the inadequate ease of access and services as well as the facilities and
performance that Islamic banking provides to users, and the level of ease of access and service
facilities as well as better performance owned by banking conventional is proportional to the number
of users they have. Not only that this also happens because many respondents believe that the banking
mechanism process between the two is not much different or can be said that Islamic banking does not
carry out the banking process with the full concept of sharia, and many respondents prefer to continue
using conventional banking for this reason.
 5. Conclusion and Suggestion
5.1 Conclusion

The needs of the Indonesian people about banking based on Islam are of considerable
potential if developed, but the level of compliance with the Koran is also the most important thing to
prioritize. Limited access to reach Islamic banks is also an obstacle in various regions, this means
there is a need to improve the quality of services ranging from facilities to the performance of Islamic
banking itself in order to attract even more people and be able to compete with conventional banking.

5.2 Suggestion

The objectivity of the assessment of each factor by the respondent certainly has a different
standardization would be better for further research to use a more detailed explanation in order to
obtain compatibility between each respondent. For further research it would be better if choosing
respondents with users of the same company's products in order to obtain results that are more in line
with those in the field. Descriptive statistical analysis is also limited to the assessment of the data
itself, it would be far better if further research used probit regression analysis or the like.

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