RELIGIOUS FACTORS, PRODUCT QUALITY, AND SERVICE QUALITY AS DETERMINANTS OF CUSTOMER SAVING PREFERENCE IN ISLAMIC BANKING: EVIDENCE FROM BANK MUAMALAT TERNATE

Abstract

Customer saving preference is a critical factor influencing the competitiveness and sustainable growth of Islamic banking institutions. Previous studies have reported inconsistent findings regarding the relative importance of religious factors, product quality, and service quality in shaping customers' saving decisions. This study aims to examine the effects of religious factors, product quality, and service quality on customer saving preference at Bank Muamalat Ternate, Indonesia. A quantitative explanatory research design was employed using primary data collected from 150 customers selected through purposive sampling. Data were analyzed using Structural Equation Modeling (SEM) with AMOS 26. The results indicate that product quality has a positive and statistically significant effect on customer saving preference. Religious factors exhibit a positive relationship but are not statistically significant at the 5% significance level, while service quality has a positive but statistically insignificant effect. These findings suggest that customers place greater emphasis on the functional value, competitiveness, transparency, and financial benefits of Islamic banking products than on religious considerations alone when making saving decisions. This study contributes to the Islamic banking literature by providing empirical evidence from an underexplored island region in Eastern Indonesia and highlights the strategic importance of continuous product innovation, while maintaining Sharia compliance and high service standards to strengthen customer preference and enhance the competitiveness of Islamic banks.