The factors affecting the bank preferences of participation banking individual customers and participation banking knowledge levels: Example of Istanbul and Bursa provinces

Participation banking called Islamic banking in the world literature differs from traditional banking because it does not accept interest. Participation Banking is the fulfillment of banking activities with the principle of interest-free banking. This study aims to investigate the reasons why individual bank customers prefer participation banks. In order to determine the factors affecting the bank preferences of individual participation bank customers. In order to determine the factors affecting the bank preferences of participation bank individual customers, the questionnaire prepared was sent to 390 participants within the scope of the sample selected from the existing bank customers in participation banks in Istanbul and Bursa provinces via google survey application and data were collected. The data obtained from the surveys was analyzed using the Statistical Package for the Social Sciences (SPSS) program. Logistic regression analysis, explanatory factor analysis, t-test and anova test were used in the analysis process. As a result of the analysis, it was observed that the majority of the participants was married and the ages of thre participants was between 36-35, the majority had a bachelor's degree, and they were private sector employees. It was observed that more than half of the participants had accounts in both participation banks and traditional banks. In order to understand the bank preferences of the participants, 24 questions were asked, consisting of personnel, products and services, the bank's image and trust, and environmental factors. The factors were classified with explanatory factor analysis and the priority factors in bank preference were found. According to the results, the most priority factor in bank preference was the bank image and trust in the bank. Then, it was concluded that the important factors were, respectively, personnel quality, products, and services. As a result of the t-test and variance analysis, it was determined that there was no significant difference in the bank preferences of the participants in terms of gender, profession, and monthly income, while there was a significant difference for age and education level. When marital status and income level are analyzed, it is understood that there is a significant difference only in terms of products and services factor. The same result was obtained for the duration of employment and the number of banks worked for. Only the products and services factor differs significantly with the length of time worked with the bank and the number of banks worked with. It is concluded that the rate of bank customers' knowledge about participation banks is low. However, when the frequency analysis of the knowledge level was performed for each of the 20 terms, the highest frequency values were found to be those of bank customers who had an account in a participation bank for 2 to 5 years, except for the banking term of "muzara'ah". It is understood that customers who have an account for more than 2 years but less than 5 years have more information about the banking terms. On the other hand, bank customers who have account in a participation bank for more than 10 years are less proficient in these terms than other groups. While it is noticeable that the duration of working with the participation banks helps to increase the knowledge level of bank customers in the early years, it can be thought that customers who have account for more than 10 years have less knowledge because their interest has decreased.