Complexity Constrains Islamic Banking Adoption Despite Perceived Relative Advantages
DOI:
https://doi.org/10.21070/perisai.v10i2.1997Keywords:
Complexity, Relative Advantage, Islamic Bank Adoption, Thematic AnalysisAbstract
General Background: Islamic banking continues to develop as part of the global financial system, yet customer acceptance remains essential for sustainable market expansion. Specific Background: Despite increasing institutional assets and regulatory support, Islamic banks experience challenges in attracting customers compared with conventional financial institutions. Knowledge Gap: Previous studies have predominantly employed quantitative approaches based on Diffusion of Innovation theory, leaving stakeholder experiences concerning adoption barriers and perceived benefits insufficiently explored. Aims: This study investigates factors encouraging and discouraging customers from adopting Islamic banking products and services. A qualitative phenomenological approach was employed through semi structured, in depth interviews with Islamic banking stakeholders, followed by thematic analysis. Results: Operational, technological, and service related complexity emerged as significant barriers to customer acceptance. Conversely, relative advantage was reflected in product quality, frontline employee competence, digital banking applications, and tangible service characteristics. These findings identify contrasting dimensions shaping customer perceptions of Islamic banking services. Novelty: The study provides a qualitative examination of complexity and relative advantage within the Diffusion of Innovation framework, offering empirical insights for refining their conceptual indicators. Implications: Islamic banks should address operational difficulties while strengthening product offerings, employee competence, and digital service delivery to support customer retention and market development.
Highlights:
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Operational, technological, and service difficulties emerged as major customer barriers.
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Product quality, employee competence, and digital applications represented important strengths.
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Stakeholder experiences provided empirical insights for refining theoretical indicators.
Keywords: Complexity, Relative Advantage, Islamic Bank Adoption, Thematic Analysis
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