Customer Loyalty Toward Islamic and Conventional Banks; Mediator Role of Customer Satisfaction

With the liberalization of economic sector of Pakistan and introduction of Islamic banking system, the industry become more competitive as the consumer have more choices and thus their preference changed toward banking. In this increasing high competitive industry, Bankers are more focus on customer loyalty to win market share and thus gain competitive advantages. The purpose of this paper to identify those core factor that influence customer loyalty in banking sector of Pakistan. The paper examine three independent factors i.e. Bank services, Bank reputation and religious perspective along with a mediator factor which is customer satisfaction that ultimately results in gaining customer loyalty. This study was carried out by taking sample size of 260 participants and the structure questionnaire of 35 items is used to collect data and analysis was done using SPSS (edition 22) software. The Result of the study shows that there is positive relation among Bank services, Bank Image and religious Perspective on customer satisfaction which directly leading to customer loyalty. With the help of this study we found that Bank services is considered as a most prominent factor that leads to customer satisfaction and customer satisfaction leads to customer loyalty. This study is helpful for policy makers and bank managers to know customer satisfaction thus they can earn more customer loyalty. Key words: Customer Loyalty, Customer Satisfaction, Bank services, Bank Image, Islamic bank JEL Classification:  G21