The Role of Islamic Awareness as a Mediator in the Relationship between Islamic Banking Practices and Customer Purchase Intentions: A Case Study in Pakistan

Abstract

This study delves into the dynamics of Islamic banking practices and their influence on customer behavior in the specific context of Pakistan. Through a meticulous analysis, the research examines the reliability and validity of constructs such as Customer Perception, On Counter Advertising, Products, Promotion, and Service Quality, highlighting their robustness in measuring the intended dimensions. The discriminant validity among these constructs is further affirmed, underscoring the distinctiveness of each construct within the measurement model. Furthermore, the direct effects of various relationships on Awareness and Customer Perception are scrutinized, uncovering significant impact for several factors such as Service Quality and Promotion, while others demonstrate no significant influence. Moreover, the mediation analysis highlights the crucial role of Islamic awareness in shaping customer perceptions, with most relationships exhibiting significant mediation effects. These findings underscore the importance of factors such as trust, service quality, and Islamic awareness in influencing customer behavior and purchase intentions within the Islamic banking sector in Pakistan. These findings underscore the crucial role of Awareness as a mediator, suggesting that the impact of Products, Promotion, and Service Quality on Customer Perception is partially mediated by their influence on Awareness. Overall, this study contributes to a deeper understanding of the intricate dynamics between Islamic banking practices, customer perceptions, and awareness in Pakistan. The insights gleaned from this research have significant implications for policymakers and practitioners, offering valuable guidance for the formulation of strategies aimed at enhancing customer satisfaction and loyalty in Pakistan's rapidly evolving financial landscape. The past studies examine the relationship with context of conventional banking and current exploring the perception of Islamic banking customer. This will helps to understand the Islamic investor perception and banking strategies to enhance decision about Islamic banking system.