(1)THE ACCEPTANCE OF ISLAMIC BANKING PRODUCTS AND SERVICES AMONG ISLAMIC BANKING STUDENTS IN UNIVERSITY MALAYSIA KELANTAN

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(1)THE ACCEPTANCE OF ISLAMIC BANKING PRODUCTS AND SERVICES AMONG ISLAMIC BANKING STUDENTS IN UNIVERSITY MALAYSIA KELANTAN. FATIN NASUHA BINTI MOHD FAIZON, FATIN NORMAWADDAH BINTI SOVRI, FATINAH NAJIHAH BINTI MOHD ROZADI AND MOHAMAD ZULHAIREN IZAHAM BIN MARASAN. DEGREE OF BUSINESS ADMINISTRATION (ISLAMIC BANKING AND FINANCE) 2022. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(2) The Acceptance of Islamic Banking Products and Services Among Islamic Banking Students in University Malaysia Kelantan. by. Fatin Nasuha Binti Mohd Faizon, Fatin Normawaddah Binti Sovri, Fatinah Najihah Binti Mohd Rozadi, Mohamad Zulhairen Izaham Bin Marasan. A thesis submitted in fulfillment of the requirements for the degree of Business Administration (Islamic Banking and Finance). Faculty of Entrepreneurship and Business UNIVERSITI MALAYSIA KELANTAN. 2022. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(3) THESIS DECLARATION. I hereby certify that the work embodied in this thesis is the result of the original research and has not been submitted for a higher degree to any other University or Institution.. OPEN ACCESS. I agree that my thesis is to be made immediately available as hardcopy or on-line open access (full text).. EMBARGOES. I agree that my thesis is to be made available as hardcopy or on-line (full text) for a period approved by the Post Graduate Committee. Dated from ______________ until _______________.. CONFIDENTIAL. (Contain confidential information under the Official Secret Act 1972)*. RESTRICTED. (Contains restricted information as specified by the organization where research was done)*. I acknowledge that Universiti Malaysia Kelantan reserves the right as follows: 1. The thesis is the property of Universiti Malaysia Kelantan. 2. The library of Universiti Malaysia Kelantan has the right to make copies for the purpose of research only. 3. The library has the right to make copies of the thesis for academic exchange.. _________fatin nasuha_____ SIGNATURE NAME: Fatin Nasuha Mohd Faizon _____fatin normawaddah_____ SIGNATURE NAME: Fatin Normawaddah Sovri ______fatinah najihah______ SIGNATURE NAME: Fatinah Najihah Mohd Rozadi ____mohammad zulhairen____ SIGNATURE NAME: Mohamad Zulhairen Izaham Marasan Date: 15 January 2022. ____________________________ SIGNATURE OF SUPERVISOR NAME: Date: 16 Jan. 2022. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(4) Student’s Name: FATIN NASUHA BINTI MOHD FAIZON Matric No. A18A0145 Student’s Name: FATIN NORMAWADDAH BINTI SOVRI Matric No. A18A0146 Student’s Name: FATINAH NAJIHAH BINTI MOHD ROZADI Matric No. A18A0150 Student’s Name: MOHAMAD ZULHAIREN IZAHAM BIN MARASAN Matric No. A18A0283 Name of Supervisor: DR. MOHD ZULKIFLI BIN MUHAMMAD Name of Programme: SAB Research Topic: THE ACCEPTANCE OF ISLAMIC BANKING PRODUCTS AND SERVICES AMONG ISLAMIC BANKING STUDENT IN UMK. NO.. CRITERIA. 1.. Content (10 MARKS) (Research objective and Research Methodology in accordance to comprehensive literature review) Content of report is systematic and scientific (Systematic includes Background of study, Problem Statement, Research Objective, Research Question) (Scientific refers to researchable topic). POOR (1 MARK). PERFORMANCE LEVEL FAIR GOOD (2 MARKS) (3 MARKS). EXCELLENT (4 MARKS). Poorly clarified and not focused on Research objective and Research Methodology in accordance to comprehensive literature review.. Fairly defined and fairly focused on Research objective and Research Methodology in accordance to comprehensive literature review.. Good and clear of Research objective and Research Methodology in accordance to comprehensive literature review with good facts.. Strong and very clear of Research objective and Research Methodology in accordance to comprehensive literature review with very good facts.. Content of report is written unsystematic that not include Background of study, Problem Statement, Research Objective, Research Question and unscientific with unsearchable topic.. Content of report is written less systematic with include fairly Background of study, Problem Statement, Research Objective, Research Question and less scientific with fairly researchable topic.. Content of report is written systematic with include good Background of study, Problem Statement, Research Objective, Research Question and scientific with good researchable topic.. Content of report is written very systematic with excellent Background of study, Problem Statement, Research Objective, Research Question and scientific with very good researchable topic.. WEIGHT. ____ x 1.25 (Max: 5). ____ x 1.25 (Max: 5). TOTAL. FYP FKP. ASSESSMENT FORM FOR FINAL YEAR RESEARCH PROJECT: RESEARCH REPORT (Weight 50%) (COMPLETED BY SUPERVISOR AND EXAMINER).

(5) 2.. Overall report format (5 MARKS). Submit according to acquired format. The report is not produced according to the specified time and/ or according to the format. The report is produced according to the specified time but fails to adhere to the format.. The report is produced on time, adheres to the format but with few weaknesses.. The report is produced on time, adheres to the format without any weaknesses.. Writing styles (clarity, expression of ideas and coherence). The report is poorly written and difficult to read. Many points are not explained well. Flow of ideas is incoherent.. The report is adequately written; Some points lack clarity. Flow of ideas is less coherent.. The report is well written and easy to read; Majority of the points is well explained, and flow of ideas is coherent.. The report is written in an excellent manner and easy to read. All of the points made are crystal clear with coherent argument.. Technicality (Grammar, theory, logic and reasoning). The report is grammatically, theoretically, technically and logically incorrect.. There are many errors in the report, grammatically, theoretically, technically and logically.. The report is grammatically, theoretically, technically and logically correct in most of the chapters with few weaknesses.. The report is grammatically, theoretically, technically, and logically perfect in all chapters without any weaknesses.. Reference list (APA Format). No or incomplete reference list.. Incomplete reference list and/ or is not according to the format.. Complete reference list with few mistakes in format adherence.. Complete reference list according to format.. Writing is confused and loosely organized. Transitions are weak and closure is ineffective.. Uses correct writing format. Incorporates a coherent closure.. Writing include a strong beginning, middle, and end with clear transitions and a focused closure.. Format organizing (cover page, spacing, alignment, format structure, etc.). Writing is disorganized and underdeveloped with no transitions or closure.. ____ x 0.25 (Max: 1). ____ x 0.25 (Max: 1). ____ x 0.25 (Max: 1). ____ x 0.25 (Max: 1). ____ x 0.25 (Max: 1). FYP FKP. ASSESSMENT FORM FOR FINAL YEAR RESEARCH PROJECT: RESEARCH REPORT (Weight 50%) (COMPLETED BY SUPERVISOR AND EXAMINER).

(6) 3.. Research Findings and Discussion (20 MARKS). Data is not adequate and irrelevant.. Data is fairly adequate and irrelevant.. Data is adequate and relevant.. Data is adequate and very relevant.. Measurement is wrong and irrelevant. Measurement is suitable and relevant but need major adjustment. Data analysis is fairly done but needs major modification.. Measurement is suitable and relevant but need minor adjustment. Data analysis is satisfactory but needs minor modification. Data analysis is adequately supported with relevant output/figures/table and etc.. Measurement is excellent and very relevant.. Data analysis is inaccurate. 4.. Conclusion and Recommendations (15 MARKS). Data analysis is correct and accurate. Data analysis is strongly supported with relevant output/figures/table and etc.. ____ x 1 (Max: 4) ____ x 1 (Max: 4) ____ x 1 (Max: 4). Data analysis is not supported with relevant output/figures/tables and etc.. Data analysis is fairly supported with relevant output/figures/tables and etc.. Interpretation on analyzed data is wrong.. Interpretation on analyzed data is weak.. Interpretation on analyzed data is satisfactory.. Interpretation on analyzed data is excellent. Implication of study is not stated.. Implication of study is weak.. Implication of study is good.. Implication of study is excellent. ____ x 1.25. Conclusion is not stated. Conclusion is weakly explained.. Conclusion is well explained.. ____ x 1.25. Recommendation is not adequate and irrelevant.. Recommendation is fairly adequate and irrelevant.. Conclusion is satisfactorily explained. Recommendation is adequate and relevant.. Recommendation is adequate and very relevant.. ____ x 1.25. ____ x 1 (Max: 4). ____ x 1 (Max: 4). (Max: 5). (Max:5). (Max:5). TOTAL (50 MARKS). FYP FKP. ASSESSMENT FORM FOR FINAL YEAR RESEARCH PROJECT: RESEARCH REPORT (Weight 50%) (COMPLETED BY SUPERVISOR AND EXAMINER).

(7) ACKNOWLEDGMENT We would like to take this opportunity to acknowledge and give appreciation to those people who have contributed in the process of completing this research study by giving us supports, guidance and assistance which allows us to improving our research study from time to time. First of all, we would like to express our gratitude to our great supervisor Dr. Mohamad Zulkifli Muhammad for his continuous support and guidance in pointing out our mistakes during the finishing process of this research study. We would like to thank him for his patience and motivation in lending his time to answering any doubtful questions gave by us. Besides expressing our gratitude to our supervisor, we would like to give appreciation to our examiner Encik Mohd Rushdan Yasoa’ for his time in participating in our presentation and his patient and enthusiasm in going through every single part of our research study to give the best mark for us. Our sincere thanks also go to our fellow groupmates consisted of in contributing to finishing this research project which is Fatin Nasuha binti Mohd Faizon, Fatin Normawaddah binti Sovri, Fatinah Najihah binti Mohd Rozadi and also Mohamad Zulhairen Izaham bin Marasan for a great teamwork in discussing every problem occurred and issues that discussed in this research and also sacrifice in lack of rest to work in finishing this research study. Last but not least, we would like to give our appreciation to all the respondents that volunteering in give their cooperation in giving response to our short interviews. We also want to take this opportunity to give our gratitude to our friends and family who always mentally and physically supports us in giving their belief that we able to finish this research project to the fullest. Without them, we would not be able to finish this research in a manner way.. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(8) TABLE OF CONTENT CHAPTER 1 INTRODUCTION ................................................................................ 1 1.1. BACKGROUND OF THE STUDY ........................................................................ 1. 1.2. PROBLEM STATEMENT ..................................................................................... 3. 1.3. RESEARCH OBJECTIVES .................................................................................... 5. 1.4. RESEARCH QUESTIONS ..................................................................................... 5. 1.5. DEFINITION OF TERMS ...................................................................................... 6. 1.5.1. Islamic Banking ............................................................................................... 6. 1.5.2. Islamic Banking Products and Services ............................................................ 6. 1.5.3. Consumer Acceptance on Islamic Banking....................................................... 7. 1.6. SCOPE OF THE STUDY ....................................................................................... 7. 1.7. SIGNIFICANCE OF STUDY ................................................................................. 8. 1.7.1. To Researcher .................................................................................................. 9. 1.7.2. To Academic Institution ................................................................................... 9. 1.7.3. To company’s Manager.................................................................................... 9. 1.8. ORGANISATION OF THE STUDY .................................................................... 10. 1.9. CONCLUSION..................................................................................................... 11. CHAPTER 2 LITERATURE REVIEW .................................................................. 12 2.1. INTRODUCTION ................................................................................................ 12. 2.2. UNDERPINNING THEORY ................................................................................ 12. 2.2.1. Self-determination theory ............................................................................... 12. 2.2.2. Expectation–confirmation theory ................................................................... 13. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(9) 2.3. REVIEW OF LITERATURE ................................................................................ 13 Consumer’s Acceptance .................................................................................... 13. 2.3.1 2.4. RESEARCH GAP ................................................................................................. 18. 2.6. SUMMARY / CONCLUSION .............................................................................. 22. CHAPTER 3 RESEARCH METHODS ................................................................... 23 3.2. RESEARCH DESIGN .......................................................................................... 23. 3.2.1 3.3. Descriptive Research...................................................................................... 24. DATA COLLECTION METHODS ...................................................................... 24. 3.3.1. Primary Data .................................................................................................. 24. 3.3.2. Secondary Data .............................................................................................. 26. 3.3.3. Process of Interview ....................................................................................... 27. 3.4. STUDY POPULATION ....................................................................................... 28. 3.5. SAMPLE SIZE ..................................................................................................... 28. 3.6. SAMPLING TECHNIQUES................................................................................. 29. 3.7. RESEARCH INSTRUMENT DEVELOPMENT .................................................. 30. 3.8. PROCEDURE FOR DATA ANALYSIS .............................................................. 31. 3.8.1. Data Analysis Method .................................................................................... 31. 3.8.2. Interview Analysis ......................................................................................... 31. 3.8.3. Content Analysis ............................................................................................ 32. 3.8.4. ATLAS.ti ....................................................................................................... 34. 3.8.5. Protocol of Interview ..................................................................................... 34. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(10) 3.9. SUMMARY/CONCLUSION ................................................................................ 36. CHAPTER 4 RESEARCH FINDINGS .................................................................... 37 4.1. INTRODUCTION ................................................................................................ 37. 4.2. FINDINGS FOR KNOWLEDGE AND AWARENESS ........................................ 38. 4.3. FINDINGS FOR BELIEF AND BEHAVIOUR .................................................... 49. 4.4. FINDINGS FOR ACCEPTANCE ......................................................................... 57. 4.5. CONCLUSIONS .................................................................................................. 64. CHAPTER 5 CONCLUSION ................................................................................... 65 5.1. INTRODUCTION ................................................................................................ 65. 5.2. MAIN FINDINGS ................................................................................................ 66. 5.3. IMPLICATIONS OF THE RESEARCH ............................................................... 68. 5.4. CONTRIBUTION OF THE RESEARCH ............................................................. 70. 5.5. RECOMMENDATIONS ...................................................................................... 72. 5.5.1. Knowledge and Awareness of Islamic Banking Products and Services ........... 72. 5.5.2. Government ................................................................................................... 72. 5.6. LIMITATIONS AND FUTURE OF THE RESEARCH ........................................ 74. 5.6.1. Limitations..................................................................................................... 74. 5.6.2. Future of The Research .................................................................................. 75. 5.7. CONCLUSION..................................................................................................... 76. REFERENCES .......................................................................................................... 78. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(11) CHAPTER 1 INTRODUCTION In the first chapter gives a thorough overview to the research of The Acceptance of Islamic Banking’s Product and service among Islamic Banking Students in University of Malaysia Kelantan. It will conclude introduction with nine main sections namely background of study, problem statement research questions research objective and operational definition. Other than that, it also be continue by scope of study, significance of study and organization of the proposal of the terms used to construct the conceptual model.. 1.1 BACKGROUND OF THE STUDY In this study, main focus scope is about the usage of Islamic Banking in community of Malaysian. Islamic Banking is a strong alternative financial system in the depressed world financial scenario, particularly the world crisis. Bank Islam Malaysia began operations in 1983, Bank Islam was founded mainly to help the Muslim population's financial needs and expanded its services to the wider population. Shariah compliant card and mobile banking are currently being provided by the Bank. As the revolution neared its end, some newly constituted and independent Muslim governments reviewed their economic policies in light of Shariah norms. This marked the start of the current Islamic financial revival. Activities and operations while still carrying out interest-free activities in accordance with Shariah principles. It may also be stated that Islamic Banking is based primarily on the prohibition of interest payments (riba), as only goods and services are permitted to hold a charge (Rahman, 2007). Otherwise, the factor of selection bank plentiful, instead of religion is not the only influential factor in selecting a bank, but there are also other factors such as bank. 1. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(12) reputation and cost benefit that would influence one’s decision on bank selection (Mahiswaran, 2018). Islamic banking has the same function as traditional banking, with the exception that its activities are driven by Shariah laws known as Fiqh al-Muamalat (Islamic rules in transactions). Financial institutions must keep Islamic banking funds and transaction operations separate from transactions. conventional banking to ensure that no assets are mixed. Meanwhile there were have the perception among the consumers, towards Islamic banks, especially non-Muslims’ consumers, they did not know how the Islamic banks is operated and how it’s generated profits since it is prohibited from riba, maisir and gharar (Mohd Shahril Ahmad Razimi, 2017) Furthermore, Growth rate can be witnessed according to Adissadikin Ali, president Aibim, loans that comply with the religion's ban on interest is set to increase by 10 per cent to 15 per cent annually over the next five years, outpacing the five to seven per cent growth seen for non-Islamic loans, NewStreet (2020). According to (Alex Fahrur Riza, 2019), Islamic banks have to continue to innovate their products and services because the development of technology is so fast. At the same time, Islamic banking products are frequently more expensive to establish since profit limitations on Shari'ah-compliant products are equal to interest rates on non-Islamic assets. Customers in the existing market would switch to Islamic if the value and reward supplied were equivalent to traditional financial products. It is undeniable that Islamic money has entered the mainstream, (Ranjbar and Sharif, 2008). In addition, Islamically speaking, products compared to current bank products have been further developed by replacing payments of interest, discounts and fees and contingent payment structures. According to (Dusuki and Abdullah, 2007), bankers see Islamic economics 2. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(13) as a promising sector, and it's not for everyone. This would be due to the fact that some of the investments have no interest-free equivalent, which may slow the sector's development. The study's findings provide further information on the acceptance of Islamic banking goods and services among students at the University Malaysia Kelantan. The study included Kelantan students as respondents who were also consumers. The consumer may also be a person who uses or purchases products or services, known as the end consumer.. 1.2 PROBLEM STATEMENT Despite the Islamic banking industry's expansion and development, there is a need to increase awareness and knowledge of Islamic banking and finance in order to ensure that its goals are met in line with Shari'ah (Umar et al, 2021). According to (Hassanudin et.al, 2019), Islamic banking has provided up a significant range of options in terms of banking goods and services. Many increasingly great products and services are available in Islamic banking nowadays. These products would compete with those generated by conventional banks (Hassanudin et al, 2019). Therefore, the community in Malaysia as well as abroad is becoming more open and choosing Islamic banking in financial management. With the similarity of services supplied by banks, the banking business has become very competitive, making it increasingly vital for banks to evaluate the aspects that decide the basis on which clients, particularly non-Muslims, choose between financial service providers (Hassanudin et al., 2019). The relationship between the client and the service provider is symbolized by customer acceptance. Customer loyalty is increased, and both party benefit from a long-term connection (Abid, Bilal & Gail, 2019). By the latter, efficient and effective recruitment of employees is also important in an Islamic banking and financial institution because it guarantees good 3. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(14) service and in turn gets customer acceptance. (Abdulnasir and Muner, 2016) introduced that staff must be courteous to customers, competent, work to provide appropriate financial advice, and have quick access to customer account information in order to provide high-quality service. Customer acceptance not only encourages customers to stay loyal to the company, but it also serves as a marketing tool for acquiring new customers (Abid et al,.2019). Furthermore, the credibility of the institutions may contribute to client pleasure and confidence in Islamic banking (Ashraf, 2014). (Abdulnasir et.al, 2016) stated that reliability improves the efficiency of an Islamic bank and has a favourable impact on customer perception Islamic banking needs to further enhance the quality and efficiency of products and services in this modern era. In addition, by further expanding the knowledge of Islamic banking to consumers should be done. This will help the development of Malaysia in the future to the way of banking according to Shariah. How and what composes the perception of consumers especially students towards Islamic banking and finance? The results of the survey interview will be presented to various respondents, and the survey will be enlarged from the problem statement to achieve the aim by answering the research question supplied in the following statement.. 4. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(15) 1.3 RESEARCH OBJECTIVES In this part, we examine the acceptance of Islamic banking’s products and services among Islamic banking students in UMK.. 1.To identify the consumer’s knowledge and awareness of products and services in Islamic banking among UMK students. 2. To investigate whether there are respondents background differences in developing belief and behaviors towards products and services in Islamic banking in Malaysia. 3. To conclude the acceptance of Islamic banking’s student in UMK towards products and services in Islamic banking.. 1.4 RESEARCH QUESTIONS Precisely, there are a few research questions that have been developed to find out the acceptance of Islamic banking’s products and services among Islamic banking students in UMK. The research question are as follows:. 1. How much far knowledge and awareness of UMK students towards products and services in Islamic banking? 2. How differences background of respondents can develop belief and behaviors towards Islamic banking sectors in Malaysia? 3. What are the factors that make Islamic banking the top choice for UMK students?. 5. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(16) 1.5 DEFINITION OF TERMS 1.5.1 Islamic Banking According to (Rahman, 2007) in one of his articles, Islamic Banking can be derived as concept given by Allah Almighty in performing the activities and operation relating to banking and at the same time would like to performing the activities using interest free method that is following the guideline of Shariah. According to (Abidin & Haseeb, 2018) Islamic banking has a large opportunity to stand in international view by providing services and products that can be compared with conventional banking. In other explanation, Islamic Banking mainly teach on how to avoid elements prohibited by Islam that consisted of riba that also known as interest payments as in Islam, things that allowed to carry a price is only for goods and services. With those evidence of past studies, the researchers concluded that Islamic Banking understood as any system belongs to banking where all the transaction does not include elements prohibited in Syariah of Islam where it is differs to conventional banking where the system involving things prohibited in Islam for the purpose of business. 1.5.2 Islamic Banking Products and Services According (Hove et al, 2014), Islamic banking have widely spread their unique services that will be suitable to be purchased by both Muslim and non-Muslim. While according to (Muhmmad Yusoff and Muhammad Ridhwan Ab. Aziz, 2008), roles of Islamic banking is to prevent any prohibited elements from occurred in transaction of finance and banking. It is understood that Islamic banking prohibited any haram elements from happened in the transaction which consisted of riba that also known interest, maysir that also known as gambling and gharar that also known as uncertainty.. 6. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(17) With all those evidences, researchers can conclude that Islamic banking products and services used the same principle for all countries as the principle are based on Quran and Sunnah which become the guideline for all Muslims without any differences. For any products and services offered in Islamic banking, there will be contracts to be agreed together by the consumer’s party and banking institution’s party. 1.5.3 Consumer Acceptance on Islamic Banking Customer acceptance on Islamic Banking might be influenced by their confidence on Islamic Banking, the quality of product and services served by the company, perception brought by their religion and social environment, (Ahasanul, Osman and Ismail et al, 2009). While according to (Dusuki, 2007), positive perception of customers brings crucial affect to Islamic Banking as they have been competing with conventional banking in dual banking system. The products and services offered by both of the banking’s system is quite similar. Thus, researchers derived consumer acceptance on Islamic Banking as the character which comes along with consumer’s satisfaction on particular product or services. The consumer’s perception level on Islamic Banking may vary based on several factors which consisted of their awareness on the services, quality of the services served and due to environment’s influence.. 1.6 SCOPE OF THE STUDY This aims to focus on the analysis of consumer acceptances of Islamic banking in Malaysia. The scope of the study is limited to students of University Malaysia Kelantan who have experience using Islamic banking in Malaysia. As in any study, these studies have its fair share scope of study. Hence, the following are some scopes of study:. 7. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(18) a) Respondents consist of the acceptance of products and services among students of University of Malaysia Kelantan (UMK). This research proposal will also be limited to students majoring in Islamic Banking and Finance only. So, the generalization of the results will only be within the scope of University of Malaysia Kelantan’s students majoring in Islamic Banking and Finance only. b) This research will cover the differences in the background of respondents in developing a positive belief and behavior towards products and services in Islamic Banking in Malaysia. This institution will be all in Malaysia only. For example, Bank Islam Malaysia Berhad, Affin Islamic Bank Berhad, Bank Muamalat Malaysia Berhad and many more. c) The method for this research proposal is to collect qualitative data such as to explore the factors of use of Islamic banking products and services through the method of direct interaction of individual or personal interviews that is called recording interviews with students of Islamic Banking and Finance at University Malaysia Kelantan only. Once the interview is completed, we will perform data analysis using the ATLAS.ti version 9 method.. 1.7 SIGNIFICANCE OF STUDY This research is done for the purpose to identify the factors that influence consumers’ perception and awareness of products and services towards Islamic Banking among University of Malaysia Kelantan students. This study provides important and significance information in order to help Islamic bank to understanding preferences of their customers, along with their attitude and characteristics. Islamic bank should bring high quality services that can fit with all types of cultures and background among their customers. (Bernstein, 2004) argued that the 8. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(19) image perceived by the customers cannot be separated from the customer’s reality of experiences. This study brings importance to several parties which is the researcher themselves, academic institution and company. 1.7.1 To Researcher This study created by the researcher can be a valuable reference for other researchers that have the intention to study on Islamic Banking roles in Malaysia nowadays. This study increases the opportunity for researchers to study in depth on the field of Islamic Banking in Malaysia to increase their understanding on current issues regarding Islamic Banking occurred in Malaysia. The knowledge gained by the researchers from the research can spread to their surrounding that consisted of family and friends on sharing information that people rarely know about Islamic Banking. 1.7.2 To Academic Institution The results of the study also can help to brings awareness to all Muslim in Malaysia to use the right platform that follows the guideline of Shariah as during Covid-19 pandemic season, people tend to use online banking more to avoid any physical contact that goes as government’s instruction. By getting the awareness, academic’s institution can study on the framework developed to improving their method to conveying the awareness to people through academic institution. 1.7.3 To company’s Manager By using this paper research, the manager of banking’s companies could learn on how to improving their efficiency and their management to reach high return by understanding consumer’s perception towards Islamic Banking. By making the research study as references,. 9. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(20) the manager can improve their company’s strategies to keep the company reaching significance existence in Malaysia. 1.8 ORGANISATION OF THE STUDY This study focuses on focusing on the analysis of the acceptance of Islamic banking products and services among Islamic banking students in University of Malaysia Kelantan. Chapter 1 presents an overview of Islamic banking particularly concerned with consumer acceptances of Islamic banking such as Islamic Banking products and services, social and religious perceptions, confidence in Islamic banking, quality of Islamic banking and knowledge of Islamic banking in Malaysia, the problem statement of this study, the objectives of the study, the research questions, definition of terms involved, the scope of the study, the significance of the study, and organisation of the study. Chapter 2 discusses in depth of literature review regarding products and services of Islamic Banking in Malaysia. This chapter started with the introduction then continues with discussed on perception and awareness of Islamic Banking’s products and services and lastly discussed on the framework involved in the study. The framework gives a clear view on the relationship of the element discussed in the study and the last topic discussed in the chapter is conclusion. While Chapter 3 analysed title which is an analysis of the growth of Islamic banking in Malaysia in terms of methodology. This chapter started by explaining the introduction of methodology and explained research design used by researchers. Data collection method also discussed in this chapter as well as the analysis data method and tools used in this research to analysed the data collected by the researchers and ends this chapter with the conclusion of the chapter.. 10. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(21) 1.9 CONCLUSION Malaysia's Islamic banking sector originated in the global banking system and its growing market share is high users. The Islamic banking industry should also concentrate more on its market expectations independent of Muslims or non-Muslims by providing the offers that it benefits. In order to improve the acceptance product and service of Islamic Banking industry, it is necessary to understand the current market demands. This research has pointed out that the acceptance of the product and services is the most significant consideration that individual consumers consider in accepting the production of banks. In conclusion it is essential for the Islamic banking industry in Malaysia to have awareness of acceptance of service and product Islamic banking as it still not recognized by especially among student Islamic banking. As Banking institutions are youthful than conventional banks in Malaysia, more effort is forced to increase awareness of Islamic banking. Acquire consumer acceptance goods and services.. 11. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(22) CHAPTER 2 LITERATURE REVIEW. 2.1 INTRODUCTION This chapter discusses all the themes and explores the contents in the past studies. This introduction is followed by underpinning theory, review of literature, research gap, research framework and finally conclusion.. 2.2 UNDERPINNING THEORY 2.2.1 Self-determination theory Self-determination theory is a key notion that refers to an individual's ability to make decisions and manage their own life (Nikou and Economides, 2017. Individuals that are intrinsically motivated participate in activities that provide them pleasure and fulfilment. People can become self-determined, according to this theory, when their demands for competence, connection, and autonomy are met. (Samar, Majeed, Malek and Mahmoud, 2021) studied that the commitment trust theory and the expectation–confirmation model with the selfdetermination motivation framework and investigates Internet banking users' attitudes on the continuation of their online banking services. A happy customer is more likely to use services again (Ghani et.al, 2017). When customers have self-determination in their motivation and happiness with Islamic banking's products and services, their confidence and loyalty to the Islamic banking system grows. Consumers' ability to make selections about Islamic banking services and products based on their perceptions, contentment, and acceptance. According to (Montazemi and Qahri-Saremi, 2015), user confidence in using services is boosted by selfdetermination motivational elements. The Internet banking service issue is well explored in the preadoption setting in service marketing literature (Cheng, 2020; Martins et al., 2014). 12. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(23) 2.2.2 Expectation–confirmation theory Expectation–confirmation theory (ECT) a cognitive theory that attempts to explain post-purchase or post-adoption pleasure as a consequence of expectations, perceived performance, and belief disproof. According to the expectation confirmation theory (ECT), the level of satisfaction received from the use of a system impacts the consumers' desire to buy the product again (Osang, F.B. & Onwodi, Greg, 2018). As a precursor of perceived usefulness and happiness, trust impacts good performance (Anshar, Naili, Andriyansah & Mashur 2018). (Porumbescu , 2016) mentioned that satisfaction or discontent is regarded as a result of previous positive or negative experiences by consumers of items or technology in the postexperience dimension. Expectations, perceived performance, belief disconfirmation, and satisfaction are the four important constructs in expectation confirmation theory (A.A.Bello, 2020). Consumers who have a high level of faith and confidence in Islamic banking products and services will always have a positive impression. Products, systems, and, most importantly, services should all be continually improved. For example, a secure network for ATMs and other forms of internet banking. Customers' accessibility will be improved as a result of this. 2.3 REVIEW OF LITERATURE 2.3.1 Consumer’s Acceptance 2.3.2. Religious. Malaysia has been advocating the idea of developing an Islamic Banking system with the goal of expanding among Muslims and non-Muslims (Shahril & Rahim,2017). The confidence in the validity of the principles taught lies at the core of religion. Individual levels of belief in a religion's teachings vary greatly. As a result, religious belief might be considered one of the individual's qualities. Religious faith is a necessary component of religiosity (Glock and Stark, 1965; Usman et al., 2017). In assessing religiosity, proposes the idea of loyalty,. 13. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(24) which includes knowledge (ilm/ ma'rifah), belief (faith), implementation (charity), repercussions (natajah), and achieving the best (ihsan)(Shamsuddin,1992). In our research, we use religious knowledge and belief to measure the context of customer acceptance. Malaysians benefit greatly from the Islamic banking system because the majority of Malaysians are Muslims, despite the fact that Malaysians originate from numerous ethnic groups and profess numerous faiths (Aminah et al, 2021). The acceptance of Muslim and non -Muslim users of Islamic breeding products and services to become common in this modern era. Contemplating Shariah finance combines Islamic economic ideas with modern lending standards, and its products can be sold to both Muslims and non-Muslims (Shahril et al., 2017). The knowledge of Islamic banking has spread far and wide to all types of religions and races in Malaysia especially students and young generations now days and they are all increasingly accepting products and services by Islamic banking and finance that benefit the public. All financial interactions in islamic banking must be supported by unpretentious productivity in order to satisfy both Muslim and non-Muslim customers (Shahril et al., 2017).. 2.3.1. Islamic Banking Technology. Consumer attitudes regarding applying technology may be influenced by information received about the system's ease of use and utility (Hubert et al., 2017). The evolution of information and communication technology has shifted the industry's focus from manual to automation activities, as well as from offline to online transactions (Alex Fahrur Riza, 2019). This gives maximum action effect to Islamic banking in Malaysia. Based on (Nguyen, Lan, & Dang, 2017), in reality, banks responded to this trend by developing digital banking applications that modernized all traditional transactions and services. This Islamic online banking system is focused more on the current younger generation. this is because they are more numerous and accustomed to using advanced applications and 14. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(25) technologies. (Tan, Purba, & Widjaya, 2018) stated that considering youngsters are early adopters of new systems or services, they are thought to be more likely than other generations to use digital banking in the future. The advanced technology provided by Islamic banking has accelerated the younger generation especially students in their transactions to make payments, buy necessities etc. especially during this Covid-19 season. Therefore, in addition to maintaining personal safety, we are also facilitated in financial matters. Example of technology of Islamic banking that attract consumers intentions is financial technology (Fintech). (Milian, Spinola, & Carvalho, 2019) found that Fintech is growing as a major medium for facilitating everyday operations of society and the world, ushering in a new era of financial services for banks. Fintech is a relatively young business, and when integrated with Islamic financing, it will become even more innovative (Asfaq, Aamir & Abid, 2021). This new technologic in Islamic banking and finance would give a new experience towards consumers to get through. As stated by (Aisyah, 2018), the growing use of technology in financial services provides a number of benefits, including enhancing bank performance by lowering cost of opportunity and fostering greater customer loyalty by allowing clients to access financial services at anytime, anywhere across, for as long as they live. 2.3.2. Service Quality. According to (Ghazi & Marwa, 2021), given the continually changing banking environment, service quality is more likely to gain traction in the banking industry. Especially now in this Covid-19 season, consumers cannot go out of the house so the use of quality services for internet banking must be well guaranteed. The extremely competitive financial market is forcing banks, especially Islamic banks, to reconsider their service offerings on a regular basis in light of changing client expectations for service quality (Ghazi et al., 2021). Consumers will be satisfied with Islamic banking that has the best quality of service to ensure consumer loyalty to the banking institution. In the banking industry, this includes capturing. 15. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(26) technology-centric capabilities that enable new methods of contact and service delivery to boost client satisfaction (Ghazi et al., 2021). (Dootson, Beatson, & Drennan, 2016) mentioned that we will almost certainly see another revolution in bank marketing methods as a result of technical advancements in the banking sector. Improving the quality of service in Islamic banking is increasingly seen as the most important step in achieving a competitive advantage in the market (Aminah et al, 2021). The most important good Islamic banking services quality now days are CARTER and SERVQUAL. Compliance, assurance, reliability, tangible, empathy, and responsiveness are the five dimensions of the CHARTER concept (Abu & Tatik, 2018). This component of service quality, which is a part of the CARTER Model, has a major influence on customer satisfaction in Islamic banking in Kuwait and Saudi Arabia, respectively (Lone et al., 2017). Meanwhile (Amin and Isa, 2008) found that in the context of Sharia banking in Malaysia, it was found that the reliability becomes a key criterion for customer satisfaction. Customers are more concerned with the banks' Shariah compliance and service quality than with their profitability (Ongera and Ndede, 2019). Service quality has two dimensions (empathy and assurance), and they have a huge impact on the client satisfaction of Islamic banks (Dandis and Wright, 2020).. 2.3.3. Awareness. According to previous study (Islam and Rahman, 2017); (Obeid and Kaabachi, 2016), the low percentage of Muslims who would use Islamic banks is due to a lack of knowledge about the goods offered by Islamic banks. Customers' attitudes toward Islamic banking goods and services were significantly influenced by customer awareness (Muhamad et al., 2016). Awareness of Islamic banking products and services due to lack of knowledge about it that. 16. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(27) complies with shariah principles. Better consumer education, (Barathy, 2011) added, will help individuals become more aware of Islamic banking products. Many clients' understanding of ethical banking services has become a crucial aspect in deciding which bank to use (Ghosh, 2016). As consumer understanding increases in the importance of banking and Islamic products and services then the awareness to use Islamic banking products and services in meeting the consumer’s desire to manage finances or any transactions will increase. Customers' basic decision-making processes may be influenced as a result of this awareness (Souiden and Rani, 2015). We can say that awareness played important roles in perception of consumers.. 2.3.4. Loyalty. Consumer loyalty is measured by looking at customer responses to previously consumed items or services, which causes customers to freely volunteer to buy back and circulate information about the product or service (Suryari, Andyani & Rahul, 2021). The financial management of each consumer is very meaningful because the trust that their finances are well managed by the Islamic banking will result in consumer loyalty. Customer satisfaction can occur due to the ease of using technology to transact online, but the important thing is that the service of the bank's products/services used plays a role in determining customer satisfaction and dissatisfaction, with dissatisfaction propagating itself in the form of complaints about sharia bank services, causing customers to seek other services (Suryari et al., 2021). The term "customer loyalty" simply refers to a customer's fondness for a particular Islamic banking product and a repurchase made in response to that fondness (Umer et al., 2021). Customer loyalty, according to this study, can be defined as a customer's willingness to remain devoted and persistent when engaging with the bank for a variety of new and old services (Henrique & Matos, 2015).. 17. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(28) 2.4 RESEARCH GAP The first literature review discussed on religion as one of the factors that contributed to consumer’s acceptances on Islamic banking. According to (Usman et al, 2017), religious faith might be one of the elements to show the person’s religiosity. While according to (Shahril et al, 2017), Islamic banking brings products and services that can be purchased and suitable for both Muslim and non-Muslim apart their strict Shariah compliance. This means that religion is one of the factors that influence in consumer’s perception on Islamic banking. Not only that, the second factors that contributed in influence consumer’s acceptances towards Islamic banking is technology of Islamic banking. To become competitive, Islamic banking nowadays providing digital banking to replace traditional system that required consumer to having face-to-face transaction. According to (Milian, Spinola & Carvalho, 2019), they found that Fintech is growing widely among young generation as the tools for their daily activities. Means that, the factor of banking’s technology can influence people to choose the company as their preference as it becomes a convenience system to easier consumer’s daily transaction. Apart from that, service quality also one of the factors influenced people acceptances towards Islamic banking. According to (Ghazi et al, 2021) it is included for banking’s capabilities in providing new methods and services that can boost customer’s satisfaction. Providing best quality of service consisted of the most elements that allowed Islamic banking to be as competitive as conventional banking to opened up views of consumer that Islamic Banking have the capability to serve the best as conventional banking. This means customer’s satisfaction that come from getting best quality of service can lead to generating best perception towards the bank that served those services.. 18. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(29) Fourth elements that could contribute to consumer’s acceptances towards Islamic banking is awareness. According to (Obeid and Kaabachi, 2016), there are several amounts of Muslim who would not prefer to use Islamic Banking are due to lack of knowledge on how Islamic banking actually works and what kind of services and goods offered by Islamic banking. Lack of knowledge leads them to have the preference to conventional banking as it is widely used by most of people rather than Islamic banking that have their own condition in every service and good that complied with Shariah. We can conclude that knowledge on particular things will then lead to customer’s awareness and then automatically increases their interest to purchase the goods and services offered. As a conclusion, the usage of Islamic Banking among Malaysian affected by several particular factors and if the factors are not understood by Islamic banking Institution, the factors will then widely spread among the consumers that will lead decrease in demand occurred. To avoid this from happening, Islamic banking institution can make an effort to upgrading their services to prove that they can be compliance of conventional banking as well as the best banking in providing high quality services. According to the last literature review on consumer’s acceptances towards Islamic Banking, researchers can conclude that awareness is the key point to attract consumers in using their products although the customers might be the first timer in using the services. All themes included in the literature review has no relation on the understanding towards Islamic banking products and services among students of University of Malaysia Kelantan. Apart from that, this title of research is not yet study by any parties. Because of that, we believe that this research prepared by the researchers could bring much contribution to Islamic banking students in University of Malaysia Kelantan. This research will focus on Islamic banking students for increasing their knowledge on Islamic banking itself on what prepared of the institutions that they will involve in the future and what kinds of factors that can influenced customers to highly 19. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(30) choose Islamic banking as their banking institution for their daily transaction. Thus, this research will fill the gap of study in Malaysia. From that, researchers decided to make a study that based on consumer’s perception on Islamic Banking products and services among Islamic banking students of University of Malaysia Kelantan.. 20. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(31) 2.5 RESEARCH FRAMEWORK PRODUCT AND SERVICE ISLAMIC BANKING Factors RELIGIOUS (Shahril & Rahim, 2017), (Glock and Stark, 1965); (Usman et al, 2017), (Aminah et al, 2021), (Shahril et al, 2017), (Shamsuddin, 1992) ISLAMIC BANKING TECHNOLOGY (Hubert et al., 2017), (Alex Fahrur Riza, 2019), (Nguyen, Lan, & Dang, 2017), (Tan, Purba, & Widjaya, 2018), (Milian, Spinola, & Carvalho, 2019), (Asfaq, Aamir & Abid, 2021), (Aisyah, 2018), SERVICE QUALITY (Ghazi & Marwa, 2021), (Ghazi et al., 2021), (Dootson, Beatson, & Drennan, 2016), (Aminah et al, 2021), (Abu & Tatik, 2018), (Lone et al., 2017), (Ongera and Ndede, 2019), (Dandis and Wright, 2020) AWARENESS (Islam and Rahman, 2017), (Obeid and Kaabachi, 2016), (Muhamad et al, 2016), (Barathy, 2011), (Ghosh, 2016), (Souiden and Rani, 2015) LOYALTY (Suryari, Andyani & Rahul, 2021), (Suryari et al., 2021), (Umer et al., 2021), (Henrique & Matos, 2015) BELIEF AND BEHAVIOUR (Mohamed and Mahfuzur,2019), (Shahab, Zahra and Uzma,2018), (Md Husin and Rehman, 2016), (Ali and Jama,2016), (Shahab & Zahra, 2018), (Ruhaini, 20199), Amin et al. (2017) Figure 1: Research Framework. 21. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS. The acceptance of Islamic Banking product and services among Students Islamic Banking in University of Malaysia Kelantan.

(32) The research framework of the study was established and illustrated above in Figure 1 based on the literature review. The main objective of this study is to examine the acceptance by UMK student-Islamic banks of Islamic banking products and services. Depending on a literature research, religious, Islamic banking technology, quality of service, awareness and loyalty with acceptance or perception of Islamic banking products and services may be inferred. Furthermore, customers are becoming more and more demanding for these products and services. The plurality of consumers who prefer or accept the Islamic banking system are influenced by a number of factors.. 2.6 SUMMARY / CONCLUSION The chapter 2 concerns the review section of literature. Literary is a critical examination of research on the topic of research. This chapter also covered the definition, idea and issue of our research. The secondary data are also available to each of us. A lot of journals and utilized as references. We obtain and integrate a lot of feedback to our research too. Besides, the research framework will illustrate the factor acceptance of Islamic banking products and services among Islamic Banking student in University of Malaysia Kelantan (UMK).. 22. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(33) CHAPTER 3 RESEARCH METHODS. 3.1 INTRODUCTION This chapter describes methodology how the research is carried out with the objective of designing, measuring variables, data analyzing process and a chapter' s summary. There will be mention every component involved in conducting this research from population, study population and sampling techniques used form the interview. Thus, this is the main component of the research project. Generally, research methodology including research design, data collection methods, research instrument development, measurement of the variables and procedure for the data analysis. Besides, it also provides a clear view to the readers on how the research is carried out. 3.2 RESEARCH DESIGN Qualitative field studies were used in this study to obtain accurate and accurate information. Based on (Johan Hogan, 2009), qualitative research is a multifaceted approach that investigates culture, society and behavior through an analysis and synthesis of people's words and actions. The interview was conducted through small groups to assist the respondents in their understanding towards the interview questions. It ensures effective research problems. It is used to examine acceptance the perception on student University of Malaysia Kelantan. On this study, respondents also one of the commonly used qualitative research method, used in data collection. It usually includes limited numbers of respondents. Qualitative research methods often collect data on-site, where people are having challenges or issues. These are real-time data, and participants are rarely taken out of their geographical areas to collect information.. 23. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(34) 3.2.1 Descriptive Research Descriptive research is described as a study to describe the characteristics of a population or phenomena clearly. It also contains a large sample of attitudes, beliefs or behaviours in a certain environment. Moreover, descriptive research necessitates literature review about the nature of the research topic. This research is descriptive in nature since it investigates acceptance of Islamic banking products and services among Islamic banking student in University of Malaysia Kelantan.. 3.3 DATA COLLECTION METHODS Data collection method can be derived as the process of gathering important information that can give contribution to the research. The data collection method will then go through a systematic way that will give the ability to solve the questions occurred from the researchers such as research questions and evaluate the outcomes of the research. Component of data collection consisted of physical and social sciences, humanities and business. The component of data collection is normally same for all fields. Although the methods may be differed according to what the research ought to collect, it is very important to ensure that they collect the correct and accurate data. Thus, this study used two methods of data collection which consisted of primary data which is interview of respondents and also secondary data comes from various sources such as journal and article. 3.3.1 Primary Data No matter whether the field of study is focusing on qualitative or quantitative of research, an accurate data collection is very important in order to ensure the precision of the research. The correct selection in choosing the most suitable and appropriate data collection. 24. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(35) method whether consisted of modified past data, or develop new data and use their right function will highly able to correct or reduce the errors that possibly occurred during the process of gathering the data. The problems that might occurred from improper data collection method is inability to answer all the research question with an accurate manner, which will lead to a wrong manner of answer and will lead to not getting the ability to validate the research. Before the researcher start the data collection, firstly they identify the aim of the research and exactly what we want to achieve in this research which is starting from the problem statements. After identifying the types of data that needed in building this research, researchers started creating the questions of the interview where is the data needed is qualitative. After identifying the aim of the research, researchers choose our data collection method to continue the data collection process. As for data collection method, researchers make interviews through recording call. The interviews involved the targeted respondents which is Islamic Banking’s students in University of Malaysia Kelantan. In the process of conducting the interview, researchers deciding on what kind of questions should take part in the survey. By doing that, researchers also making all kind of questions to be separated by stages. The last procedure is this study generate the collected data from the interview. Then researchers implement the chosen methods to measure or observes the elements that are interested in. Open ended questions were used in the data collection method of this research during the intensive any break. The total duration given by the researchers for each interview was approximately 60 minutes without any break. All the interviews were audio recorded with the permission of the respondents and the data collected will follow all stages. All result gained by the interviews will later re-write by the researchers after the interviews to make the comparison of the answers from each of the respondents.. 25. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(36) 3.3.2 Secondary Data According to (Xaquin S. Perez, 2017), secondary data can be defined as any sources that come to opposite of primary data. Secondary data comes from sources where the originality of the source come from someone else and it is referred by various people. It is collected from different purpose of the research but it is useful for the new research in developing the idea of the study. Secondary data is easily available as it is widely contained in various sources compared to primary data where the data is specially differs according to the research purpose of the study. Using secondary data as the sources for the continuous process in making success research compared to solely depends on primary data. Information gained from secondary data is important due to several strong reasons. Secondary data is time saving compared to primary data. As technologies are widely used in the world nowadays, it easier the process to gained important information from secondary data as it is easily access from online and not required the researcher to go to particular location to able gaining the information. Because of that, researchers can easily access all kind of sources that can help in doing the research from using the search engines. By using secondary data can also reduce the cost totally spend in making a paper of research study. As primary data required the researchers to finds respondent and choose a method that able them to gain the information, it required the researchers to spend some of the money in order all the process come out successfully as they want. But is differs by using secondary data, as it is easily access using search engines, the researchers only required to spend on smoothness of the internet to able them access all the sources.. 26. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(37) 3.3.3 Process of Interview In the process of data recording, there are protocol of interview provided by us in order to ensure that every information gained by the informant is keep private suitable with the confidential of the information itself. Interview protocol can be derived as procedures in conducting the interviews. Interview protocol is very important to be prepared before conducting the interview as the researchers might expose information that they should not explore and by having the protocol of interview, they can focus on what information that they should explore to be exact. According to (Creswell, 2009), it is impossible to take note in every answer given by the respondents using the method of hand-written. Therefore, it is suggested for the researchers to use device to recording the information which is by using voice recording method. In the process of conducting the interview, there will be two or more researchers involved which the task of interview will be divided where one of the respondents will give the questions to the respondents while the other researchers will record the conversation and observing on what they should not expose. It is important for the researcher to requesting on taking consent of the respondent in order to ensure they are fully understood on what they involved to and what they will be giving on the time of interview process. If all the respondents agreed on terms and conditions provided by the researchers, the questions will be given to the research participants and the respondents required to give the answers suitable for what they actually thought as there will be no right or wrong answer and all kind of answers is accepted. The process of interview consisted of demographic information of the respondents as well as the questions designed for the respondents on customer’s perception on Islamic Banking. The interview was semi-structured and was conducted with. 8 respondents.. Technique used in this interview is purposive sampling in the method of selecting the. 27. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(38) respondent in order to ensure that they can gained desired information by getting know the opinion and attitude of the respondents.. 3.4 STUDY POPULATION According to (Sekaran and Bougie, 2016), population derived as a whole people or group of people while according to (Zikmund, 2003) in one of his articles, he stated that population is indicated to the specific and complete group that related to the research study The target population determined by well-defined the elements, geographical boundaries and time. The research objective is to examine between the growth of Islamic banking with consumer perceptions of Islamic banking in Malaysia. Therefore, respondents of this research are targeted on Islamic banking students of University Malaysia Kelantan to identify their own perception on Islamic banking whether it is necessary. The population of this research consisted of various ethnic and religion as there might be different perception of different religion towards Islamic banking.. 3.5 SAMPLE SIZE Sample size is indicated to the number of respondents in research of study. Cost and time constraint needed for the researchers to take into considerations when determine the sample size because of a large sample size might bring difficulties to the researchers as they will have lack of time to collection the data from large number of respondents. A small size of sample will definitely easier the process of collection data as they would not have to waiting for various people from the categories needed to joining the interviews session. The number of research population is not important in research, rather it is more important for researchers to. 28. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(39) determine the accurate sample that will be used in the analysis of the research (Taherdoost, 2016). As this study constrained in time and cost in the process of gathering the exact statical data of total community of Malaysia, researchers decided to run our research to 20 Islamic Banking students in University of Malaysia Kelantan. According to (Sekaran and Bougie, 2013), they stated that small sample is much better than a large size of sample in order to ensure that the researchers will not face any problems while doing the studies. The sample size determined using the method of data saturation. Data saturation can be derived as method used in research in the process of data collection where the method occurred from collecting the result from the respondent and it stopped when there is no additional new information compared to previous result that will affect the findings of the research. According to (Bernard, 2012), the determination on quantity of respondent in qualitative research is not something that can be quantify despite it is determined fully from what the researchers can takes into his research as it can be differ from one research and another research.. 3.6 SAMPLING TECHNIQUES Sampling techniques can be derived as statistical process where the researchers determine the type of sample. There are two type of sampling method that researchers can use as their method to determine the sampling which is probability sampling and non-probability sampling. Sampling technique used in this research is non-probability sampling which is the samples are collected by not giving the units of population the same chances of being selected as the respondent that involved in the interview. As for the sampling technique used under nonprobability sampling, researchers decided to use convenience sampling. Convenience sampling. 29. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(40) involving in collect the respondents that is easiest to give their corporation. As for this research, researchers chose the easy respondent that could lend their time in having interview by us.. 3.7 RESEARCH INSTRUMENT DEVELOPMENT Interview, observations, focus groups, document analysis, and audio visual are the five types of qualitative research instruments. The interview was chosen as one of the qualitative method's research instruments since it is one of the most significant data gathering methods. The study uses two forms of sampling in its purposive sampling: judgment sampling and quota sampling. In this study, based on quota sampling, the researchers will select only certain Islamic banking users among Islamic banking participants in Islamic banking companies in Malaysia and not all because the number of Islamic banking users is high to get information from them. Researchers will also use evaluation sampling to obtain information from specific target people who can provide the required information. In this study, researchers will interview students of University Malaysia Kelantan about their perceptions of Islamic banking. The interviews covered questions on the factors consumers choose to use Islamic banking. Interviews were conducted for open discussion and for specific trends related to consumer perceptions of Islamic banking such as attractive Islamic banking product and service factors, social and religious perceptions, confidence in Islamic banking, service quality and knowledge of Islamic banking. In the interviews, the researchers asked Islamic banking users about their experiences in using Islamic banking.. 30. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(41) 3.8 PROCEDURE FOR DATA ANALYSIS There are several standards of procedure that should be provided and followed by research in order to ensure the research come out the most proper look. This study had explained in the methodology part that research method chosen by us is qualitative as the method to conduct the research which aims to study on consumers’ perception on Islamic Banking in Malaysia. The advantages of qualitative research method to the researchers are they will be able to have interactions with actual experiences of the samples (Creswell, 2009). In this study, the researchers aimed to identify the misperception on Islamic Banking among consumers in Malaysia. 3.8.1 Data Analysis Method Data analysis is the most important process in the research apart from any other process. According to Drew et al (2008), qualitative research data analysis has the higher probability to gain negative connotations than any part of process in the research. This occurred due to the risk that qualitative studies’ data are collected from the form of word and not collected from exact numbers of data. The rise arose due to the data collected might change after it is transmitted to the final result. The data collected will be supported by using software program called ATLAS.ti in order to ensuring the validity of the information gathered come out in an effective way. Method used in this research called description of interview analysis. 3.8.2 Interview Analysis After analysing the data collected from respondents, the result of the interview will then gather all together. All the results come from the interview will then presented and the views of the respondents were examined based on the following themes which is Themes of the Respondents’ Opinions on the Acceptance of Islamic Banking Products and Services. In order to get a proper understanding on opinions of respondents, several themes created based on their 31. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(42) experience and interviews. Brainstorming between researchers occurred to pinpoint the themes contained of knowledge, awareness, belief and behaviour and acceptance. The themes were divided into four categories. Some of the respondents give out their opinion that Islamic Banking is much better than Conventional Insurance as they allowed the users to avoid any prohibited element complied with Shariah which is riba (interest), gharar (uncertain) and maysir (gambling). Next by using Islamic Banking, the profit-sharing principle is implemented where all the risk occurred in the transaction is shared by the bank itself and the customer. While some of the respondents give opinions that Islamic banking brings advantages to them, there are several respondents give opinions that Conventional Banking brings more benefit to them. This is because to is if the customer of conventional banking who used Islamic based mortgage to finance their property, they are not required to make a new buy-and-sale agreement just like required for Islamic banking. In this case, it is convenience to use conventional banking rather than Islamic banking. 3.8.3 Content Analysis Report content analysis as the suitable method to fulfil the research objectives. Content analysis can be defined as “a research technique for making replicable and valid inferences from texts (or other meaningful matter) to the context of their used” (Krippendorff, 2004). The results obtained will help in supporting a new theory and it can also verify an existing theory by the process of preparing data with careful, coding process and meaningful interpretation. The term "qualitative content analysis" refers to a powerful analytical method for the systematic and context-dependent subjective interpretation of the contents of qualitative data. (Mayring, 2014; Schrier, 2014). The current chapter establishes qualitative content analysis as a distinct analytical tool from its quantitative counterpart as well as other qualitative research 32. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.

(43) approaches. It discusses the role of computer-based tools and applications in conducting qualitative content analysis, as well as the origins of qualitative content analysis and their connections to epistemological orientations and commitments. It also identifies the fundamental principles and steps followed by researchers who use this analytic strategy. Qualitative content analysis entails sophisticated methods and is certainly transparent to analyze data in order to support the study result so that it is valid and credible. Qualitative content analysis is one of the qualitative methodologies for evaluating and interpreting data that are now available (Schreier, 2012). It is a systematic and objective approach of describing and characterizing phenomena as a research method (DowneWamboldt, 1992; Schreier, 2012). The ability to reduce data to concepts that describe the research phenomenon (Cavanagh, 1997; Elo & Kyngäs, 2008; Hsieh & Shannon, 2005) by creating categories, concepts, a model, conceptual system, or conceptual map (Elo & Kyngäs, 2008; Morgan, 1993; Weber, 1990) is a prerequisite for successful content analysis. The research question specifies what to analyze and what to create (Elo & Kyngäs, 2008; Schreier, 2012). Its roots in several scientific paradigms contribute to ontology, epistemology, and technique issues in qualitative content analysis research. The positivistic paradigm in which qualitative content analysis began has an impact on questions concerning its ontological and epistemological underpinnings. Content analysis' ontological assumptions are susceptible to interpretation and vary depending on the researcher's perspective. Researchers with a positivistic perspective maintain distance and separation from the study's objects in order to capture some objective "truth"; those with a hermeneutic perspective strive to be close and connected to the study participants in order to reveal meanings in the data through various degrees of interpretation. Qualitative content analysis' epistemological assumptions include that some ‘truth' in a text may be disclosed with as little interpretation as possible, such as by 33. FYP FKP. FACULTY ENTREPRENEURSHIP AND BUSINESS.