Islamic Banking Service Quality and Deposit Withdrawal Risk: Evidence from Brunei Darussalam

This paper aims to evaluate the service quality of Islamic banking and to explore the withdrawal behavior of Islamic banking depositors based on their evaluation towards its service quality in the context of Brunei Darussalam. A total of 180 Islamic banking customers in Brunei Darussalam were involved through a direct survey. Factor analysis is used to uncover the key dimensions of Brunei Islamic banking service quality. Afterwards, the importance and performance analysis (IPA) was employed to evaluate the importance and performance level of Brunei Islamic banking service quality. The five key dimensions of Brunei Islamic banking service quality uncovered here including assurance, reliability, tangibles, empathy, and rates and charges. Interestingly, only three dimensions survive and two are rated high in importance and low in performance. These are empathy and rates and charges. Therefore, bank management is required to give more attention and priority on how to improve the situation.