FinTech, Crowdfunding and Customer Retention in Islamic Banks

• Published in: Vision (New Delhi, India) India), 2020-09, Vol.24 (3), p.260-268
• Main Author: Baber, Hasnan
• Format: Article
• Language: English
• ISSN: 0972-2629; 2249-5304
• DOI: 10.1177/0972262919869765

Financial technology (FinTech) has gained a lot of attention and popularity in recent past years. Some researchers blame it for disrupting financial ecosystem and while others admire it for redefining traditional business models. According to the Statista Report 2018, transaction value in the crowdfunding segment amounts to US$ 5,250 mn in 2018. The aim of this study is to investigate the influence of FinTech applications and crowdfunding on customer retention in Islamic banks of Malaysia and the United Arab Emirates. A structured questionnaire consisting of 31 items was designed to gather data from 535 customers of selected banks from both countries through strata sampling. Various statistical tests were done to check the association between FinTech applications including crowdfunding and customer retention using SPSS 25.0. The results indicated that financing application of FinTech has no relevance to customer retention while as other variables such as payments, advisory services, compliance and crowdfunding has an impact on retaining customers in Islamic banks of these two countries. The conclusion of this study emphasis on expanding the range of applications of FinTech services by Islamic banks so that the customer will stay longer with the bank. Also, crowdfunding should be integrated into the Islamic banking system so that it can help in social entrepreneurship, micro-finance and establishing global Zakah and Sadaqa system.