Empirical Analysis of Branding Perception on Islamic Banks in Indonesia

This study attempts to research in terms of branding on Islamic banks and emphasize the important roles by understand the perception of its customer in order to see which factors are the most dominant or the weakest for further advance strategic plan in this industry. This exploratory research measures not only tangible dimension but also intangible dimension such the value of mashlahat (Islamic values) as an alternative apart from the pragmatic concept on business activities with profit and loss to be gained. A total 400 samples surveyed with 52 questions fewer than six different dimensions to measure the customer's perception on Islamic bank branding. Partial least square-structural equation modelling employs to measure the strength of each variable and its correlation between variables tested. In the analyzes, it contains two phases of analyses namely measurement analysis and structural analyzes. Out of the six variables tested in this study, the variable of Islamic values shows the highest value followed by regulation variable. These illustrate that Islamic values and regulation have the strongest power to influence bank sharia performance according to the customers. The others four variables tested such as financial, services, infrastructure and human resources have slightly the same power to influence the dependent variable. These results imply that the increasing of these three factors will significantly improve the performance of bank sharia in Indonesia in general, and the performance of sharia banks is not necessarily measured by the strength of its money deposits, its risk mitigation ability and how much funds have been used (in the profit loss sharing scheme). This study proposes a measurement in the value of benefit as a counterweight to the concept of pragmatic thinking that focuses on business activities. The concept of wellbeing is measured by indicators of perception, participation and acceptability with an approach based on Islamic perspectives, namely the Tawhidic String Relations (TSR) methodology, by looking at every activity and assessment of the dimensions of the world and the hereafter. In general, this research can be a reference instrument for researchers in the banking sector that the measurement of spirituality and moral aspects are also important to be a variable of performance measurement, especially in the Islamic banking sector.