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EFFECTS OF SERVICE QUALITY, CUSTOMER TRUST AND 
CUSTOMER RELIGIOUS COMMITMENT ON CUSTOMER 

SATISFACTION AND LOYALTY OF ISLAMIC BANKS IN 
EAST JAVA

Rachmad Hidayat, Sabarudin Akhmad, Machmud1

Abstract. Effects of Service Quality, Customer Trust and Customer 
Religious Commitment on Customers Satisfaction and Loyalty of 
Islamic Banks in East Java. The purpose of the present study was to describe 
the relationships among service quality, customer trust and customer religious 
commitment on customer satisfaction and loyalty of Islamic banks in East 
Java. Respondents were Islamic banks’ customers domiciled in East Java. A 
predetermined number of samples were taken by the use of a simple random 
sampling technique. Analysis was performed using the Structural Equation 
Modeling (SEM). Results indicated that service quality and customer trust of 
Islamic banks jointly had significant effects on customer satisfaction. Service 
quality and customer trust had direct and indirect effects on customer loyalty 
mediated by satisfaction of Islamic banks’ customer in East Java. Religious 
commitment had no direct and indirect effect on customer satisfaction and 
customer loyalty.

Keywords: Service quality, trust, religious commitment, satisfaction and 
loyalty

Abstrak: Pengaruh Kualitas Layanan, Kepercayaan dan Komitmen 
Beragama Nasabah Terhadap Kepuasan dan Loyalitas Nasabah Bank-
Bank Syariah di Jawa Timur. Penelitian ini menjelaskan hubungan antara 
kualitas layanan, kepercayaan nasabah dan komitmen beragama terhadap 
kepuasan dan loyalitas nasabah Bank-bank Syariah di Jawa Timur. Responden 
adalah nasabah Bank Syariah yang berdomisili di Jawa Timur. Penarikan sampel 
penelitian dilakukan dengan cara sampling acak sederhana, dengan jumlah 
yang telah ditentukan. Analisis yang digunakan pada penelitian ini adalah 
model persamaan struktural (Structural Equation Modeling atau SEM). Hasil 
penelitian ini menunjukkan bahwa kualitas layanan dan kepercayaan nasabah 
bank syariah  secara bersama-sama  berpengaruh signifikan terhadap kepuasan 
nasabah. Kualitas layanan dan kepercayaan nasabah berpengaruh terhadap 
loyalitas nasabah, baik langsung maupun tidak langsung  dengan dimediasi oleh 
kepuasan nasabah bank  syariah di Jawa Timur. Sedangkan komitmen beragama 
tidak berpengaruh terhadap kepuasan nasabah dan loyalitas nasabah baik 
langsung maupun tidak langsung.

Kata kunci: kualitas layanan, kepercayaan, komitmen beragama, kepuasan dan 
loyalitas

First draft: January, 20th 2015, Revision: March, 07th 2015, Accepted: March, 28th  2015
1 Department of Industrial Engineering, University of Trunojoyo, Department of Islamic 

Education, STI Al-Karimiyah
Email: rachmad_h@ymail.com, drs.mahmud.mpdi@gmail.com, sabarutm@gmail.com



Al-Iqtishad: Vol. VII No. 2, Juli 2015 152

Introduction

Islamic banking in Indonesia is growing in an exceedingly rapid pace. It 
is no longer a mere fulfillment of sharia obligation but has become a necessity. 
The proportion of Islamic banking for the next 10 years is expected to reach 
15%−20% of the national banking system. In order to maintain the momentum 
of rapid-growing Islamic finance industry in Indonesia, various parties have been 
conducting several things, such as education and capacity building for Islamic 
finance industry and encouraging innovations in Islamic financial products to 
deepen the market and improve public access to Islamic financial institutions. 
Sharia financial industry, in particular Islamic banks, will continue to evolve 
with the growth of Muslim middle-class community. In addition to guaranteeing 
bank customer deposits, the Deposit Guaranty Institution (known as Lembaga 
Penjamin Simpanan or LPS) actively participates in maintaining financial stability 
embodied in the rescue of banks, the source of which is not the state budget, but 
premiums from banks. At present, there is a difference between Islamic banks 
and conventional banks with regard to deposit guaranty, in which the stipulation 
of LPS interest rate does not apply to the former. The implementation of LPS 
duties and functions is expected to reassure the customers of Islamic banks and 
consequentially facilitate the operations of Islamic banks.

Islamic banks operate in accordance with the principles of Sharia, in 
which they are not burdened with paying interest for customer deposits. Islamic 
banks only pay a share of profits in accordance with the profit-sharing ratios of 
Islamic banking. With the profit-sharing system, Islamic banks certainly survived 
the negative spread. Rather than collapsed as with the conventional banks in 
general, the past economic and financial crisis, instead, had positive impacts on 
the development of Islamic banks. Until 2007, there were 3 commercial Islamic 
banks,24 Islamic business units and 105 Islamic People’s Credit Banks (known 
as BPRS or Bank Perkreditan Rakyat Syariah). Islam, as a universal and integral 
teaching, regulates all aspects of human life, such as the social, cultural, political, 
legal, defense and security as well as economic and financial aspects. Along with 
the development of Islamic values within the society after the collapse of Soviet 
communism in the 1990s, Samuel Paul Hantington stated that the threat to 
Western world is Islamic civilization (Qardhawi, 2001). The ultimate purposes 
of Sharia are to bring about virtues and to prevent damage. Sharia sets five basic 
human needs that must be protected by law: religion, life, property, reason, and 
offspring. It is in this respect that Allah makes the teachings of the Prophet 
Muhammad rahmatan lil alamiin (or blessings to all).(Q.S. Al-Anbiya [21] : 
107).



Rachmad Hidayat: Effects Of Service Quality  153

In the Islamic economic system, the interest rate paid by banks to depositors 
is replaced by a percentage or portion of profit sharing and the interest rate 
received by the banks (from debtors) is replaced by a percentage of profit sharing. 
These two forms of the ratio of profits are used as the instrument to mobilize 
savings and to channel it to productive business activities. Moslem economists 
emphasize that there is a built-in power of the Islamic economic system to ensure 
stability. Therefore, they argue that in the profit-sharing mechanism there will be 
no factor that leads to economic instability. In his analysis of the profit-sharing 
behavior with regard to economic stability, Nejatullah Siddiqi comments that:”the 
introduction of ratios of profit sharing to replace rate of interest will not destabilize the 
economy and that the change in the entrepreneurial profit will not get communicated 
back all along the line” (Muhammad, 2001). An economic system based on profit 
sharing shall better ensure allocation of economic resources and more proper 
distribution of income. The role of profit sharing in the achievement of economic 
stability should be analyzed by the use of an equilibrium approach.

Islamic banking has been providing superior products that conform to 
the Sharia. However, there are still many customers who are in doubt of its 
professionalism and service quality. Superiority in products remains in sufficient 
for customer satisfaction and loyalty. Banking customers are increasingly critical 
that the products and services provided affect banks’ survival (Rahman, 2004). 
Superior service quality will affect customer satisfaction (Babin, et.al, 2005). 
Consequently, high customer satisfaction translates to higher profits for banks. 
Another advantage is an increased customer loyalty (Chan, et.al. 2003; Ruyter 
and Bloemer, 1999; Chan, et.al, 2004).There are a lot of criticisms associated 
with service quality of Islamic banks, especially regarding the application of the 
profit-sharing system. Some complained front-office service that seemed less 
professional. This situation should be resolved to maintain loyalty of customers 
who are motivated by sharia to use Islamic banks. Among the efforts to address 
this problem is to improve service quality of Islamic banks that involve product 
conformity with Islamic principles that differentiate Islamic banks from 
conventional banks.

Literature Review

In the context of banking service quality, service quality is a relatively 
special or superior service delivery to the customer’s expectations (Cronin & 
Taylor, 1992). There are two factors that affect service quality: expected services 
and received services. Service quality is the extent to which reality and customers’ 
expectations differ with regard to the services they perceive (Parasurama, 1996). 



Al-Iqtishad: Vol. VII No. 2, Juli 2015 154

Service quality is the outcome of consumers’ current evaluation and consumption 
experience and is expected to have a direct and positive effect on overall customer 
satisfaction (Parasuraman, 1996). Service quality is the level of satisfaction 
created by a particular transaction between the bank and the customer, which 
is a psychological condition generated when emotional factors encourage 
expectations and adapt to past consumption experience (Oliver, 1981).

Satisfying customers for a company engaged in banking services is a key point 
that should not be overlooked, where customer satisfaction is a strategic aspect 
to win the competition and maintain the company’s image within the broader 
communities; thus, quality services to customers are of ultimate importance. 
Entering the competition on a global scale, Islamic banks are challenged to 
contribute to the national development through economic empowerment of the 
people. Service quality is a form of consumers’ evaluation of the level of perceived 
services and the level of expected service. Improving service quality constitutes 
a realistic way for a bank to win the competition and retain customers. Hence, 
customer satisfaction in the service sector is an important and decisive element 
to develop the company in order for survival in the face of competition.

This implies that there is a difference when service quality is seen as an 
attitude since satisfaction is different from attitude. Customer’s attitude to a 
product or service is relative, while satisfaction is an emotional reaction to past 
consumption experience. In line with the difference, service quality can also be 
distinguished by the level of satisfaction since perception of service quality is a 
result of thorough consideration or attitude in response to the excellence of a 
service, while the level of satisfaction relates only to a particular transaction in a 
relatively short period.

Trust is the belief that the action of another person or a group is 
consistent with their beliefs. Trust is created through a gradual and subsequently 
accumulated process (Pradiansyah, 1999). Consumer trust can be explained 
through dimensions of past experiences, information and enthusiasm. Consumer 
trust depends on the consumer’s experience with consuming goods or services 
and receiving favorable information from the service provider. Thus, experience 
and favorable information will foster consumer trust in a product or service. This 
is because the experiences stored in the memory of the consumer for a product 
or service are capable of establishing a person’s trust if the those experiences are 
enjoyable and satisfy them. Consumer trust will be exhibited by their response 
to the information delivered by the service provider. Consumer enthusiasm or 
attachment is their positive response to a product or service they receive.

Commitment is the motivation and engagement as well as performance and 



Rachmad Hidayat: Effects Of Service Quality  155

adherence to an organization (Gunlach, 1995). Religion provides the best that 
human beings need to determine the purposes of their lives. Religion promises 
happiness and prosperity, morality, work ethics, management of justice and what 
human beings need in their association with their fellow human beings and all 
the elements of nature (Achsien, 2000).Thus, religious commitment is a form of 
adherence to religious teachings. To Muslims, Islam is a way of life that sets the 
whole aspects of life, in line with the order “O you, who have believed, enter into 
Islam completely……..” (Q.S. Al Baqarah [2] : 208). 

Analysis of the relationship of religion and commitment with ethics does 
not end in religious affiliation. It is continued with religious commitment to reach 
religiosity. Dimensions used to measure religious commitment are: first, visits to 
the place of worship; second, participation in religious activities; and third, the 
level of personal religious faith. The levels of religious faith are captured by four 
items: first, belief in God; second, belief after death; third, agreement with the idea that 
one has the right to question what his church teaches and fourth, agreement with the idea 
that one has the right of free speech includes the right to make speeches criticizing religion 
(Taufik & Karim, 1989). The relationship between the customer and the bank is 
more than a simple functional relationship; rather, it is exceptionally emotional 
and the tie can be very strong (Shemwel, 1998). 

Generally, banks want their customers can be retained for good. Accordingly, 
in the context of banking services, customer loyalty is customer commitment to 
a bank based on a very positive attitude and is reflected in the consistent repeat 
purchases (Fandi). Repeat purchase may be the result of market dominance by a 
bank successfully making its products the only products available. Consequently, 
customers do not any other option to look for other products. Besides, it can 
repeat purchase may be the results of continuous promotion in order to entice 
and lure customers to use a product. In case of no market dominance and 
intensive promotion efforts, only the loyal customers are committed to repeat 
purchase. Loyalty will be established by the habits and the long history of banking 
product consumption. Customer loyalty is affected by continuously accumulated 
satisfaction or dissatisfaction in addition to the perceived quality of a product 
(Boulding, et.al, 1993). 

Banks capable of satisfying their customers in the long run make their 
customers loyal and making repeat purchases. Additionally, perceived agreement 
of a bank’s performance is influenced by service quality of the bank concerned. 
If the bank is capable of providing service quality in accordance with customer 
expectations, the customer will be satisfied with the services provided by the 
bank. The more the quality of services provided by bank the more satisfied the 



Al-Iqtishad: Vol. VII No. 2, Juli 2015 156

customer will be. The better the service quality provided by the bank the more 
loyal the customer to the bank will be. This is in line with studies of Cronin 
dan Taylor (1992), Zeithaml and Bitner (1996), Bloemer, et.al (1998), Lassar et 
al.(2000), Natalisa (2000), Holm (2000), Bei dan Chian (2001), Astuti (2001), 
Kadir (2001), Fullerton dan Taylor (2002), Caruana (2002), Said (2004) that 
concluded that service quality has significant direct and indirect effects on 
customer loyalty mediated by customer satisfaction.

Islamic banks can be used for cash management, i.e. management of all 
the financial traffics of a company. Therefore, customers will partner with only 
one Islamic bank, making them more easily, efficiently and uncomplicatedly 
managing their finances. Customers partnering with many banks may have 
inconvenience in managing their finances. One condition that needs to be 
considered in choosing which Islamic banks to be used for cash management is 
that the bank is capable of serving various types of transaction that the company 
needs. Trust and credibility constitute the main prerequisites for the bank to be 
chosen by customers in partnering or transacting.

Trust is to believe in a partner to a relationship due to the partner’s 
credibility and benevolence. Credibility indicates trust gained from others due 
to having the desired expertise to perform a task. Additionally, trust is gained 
due to having good manners to other partners to a relationship. Trust arises from 
the ability to prove something, from reliability and from intentionality. Trust 
is the desire of one party to be well-treated by the other party in the hope that 
the other party will take necessary actions to meet the expectation, regardless 
of the ability to monitor or control the other party (Mayer, et.al, 1995). The 
components of trust are credibility, reliability and intimacy (Peppers and Roger, 
1996). Commitment is the desire to maintain connectivity in the long run. 

Loyalty is a behavioral response that is biased or non-random, continuously 
revealed by decision makers by paying attention to one or more alternative products 
and a number of similar products and is a function of psychological processes 
(Dharmesta, 1999). In contrast to repeat purchase, customer loyalty involves 
customer’s repeated psychological feelings towards products and services for a 
long period of time. Loyalty will occur based on the experience with consuming 
a number of similar products. This experience will affect the final decision 
making where customers decide to be loyal to only one banking products. Bank 
customers have a religious commitment reflected in the customers’ consumption 
attitudes and behaviors. This attitude is measured by way of asking the customers 
how they like the products offered, how strong their religious commitment to 
Islamic banks and their tendency to recommend the bank to others as well as 



Rachmad Hidayat: Effects Of Service Quality  157

their beliefs and feelings to banking products.
Commitment is a determinant of the success of a long-term relationship 

between the consumer and the service provider (Hazra and Kailash, 2009). 
Customer commitments play a key role in the success of a long-term relationship 
between service providers and customers, which in turn will create customer 
loyalty (Ramadania, 2002). Commitment is closely connected with customer 
loyalty, which is intention to making a purchase and intensive repeat purchases. 
Repeat-purchase behavior can be described in two possibilities, loyalty and inertia 
(Odin, et.al, 2001). Repeat-purchase behavior in a situation of strong brand 
sensitivity is categorized as loyalty. Conversely, repeat-purchase behavior in a 
situation of weak brand sensitivity is categorized as inertia. Loyalty is long-term 
and cumulative (continuous) in nature; the longer the customers to be loyal, the 
more the profit the bank can obtainfrom the customer’s banking transactions. 
Customers categorized as loyal are those customers who are so satisfied with 
a specific banking product that they are enthusiastic to introduce it to anyone 
they know (Tjiptono, 2004). Furthermore, customers will make repeat purchases 
of banking products they usually buy; even these customers will not use other 
banking products. The bank’s strengths and weaknesses will be informed to the 
bank and even the customer will inform the bank’s strengths to others.

Customer satisfaction is the level of customer feelings after comparing their 
perceived performance of a product or service to their expectations. Satisfaction 
arises when customers compare their perceived performance of a product or 
service to their expectations (Spreng, et.al, 1996). Thus, customer satisfaction is 
formed after the perception of the value of an offer. Or, in other words, the level 
of customer satisfaction is a function of the difference between the perceived 
performance and expectations. Customer satisfaction occurs when the results of 
evaluation of the banking products used are at least equal to or exceed customer 
expectations, while dissatisfaction occurs when the results of evaluation do not 
meet or are below customer expectations.

Most customers like banking products after using them. Repeat 
consumption leads to customer loyalty. Loyalty is seen as a final effect of repeat 
purchases made   by consumers (Caruana, 2002). Repeat purchase may be due 
to lack of compatibility after repeated use of banking products or customers are 
conditioned to use one only banking products. The final effect arising from these 
conditions is customers that will be loyal to an improved product by repeated 
consumption in the long term. Loyalty can be as developing in three phases: 
cognitive, affective and conative. 



Al-Iqtishad: Vol. VII No. 2, Juli 2015 158

Methods

Population in this study is all the customers of Islamic banks in East Java. 
Samples were representatives of the population studied (Arikunto, 2010). that 
were taken by the use the simple random sampling technique. A predetermined 
number of samples were randomly selected only in 3 major cities in East Java 
– Surabaya, Sidoarjo and Malang. The number of samples in this study was 
150 respondents according to the sample size guideline of 100−200 (Arikunto, 
2010). Fifty respondents were taken from each city. 

Samples were Islamic bank’s customers domiciled in East Java. East Java 
Province would be developed to be the largest Islamic economic region in 
Indonesia. Another reason was that East Java Province had the potential for the 
development of Islamic economy with the support of 6,000 Islamic boarding 
schools (known as pondok pesantren). The management of Islamic boarding 
schools also asked the government to maximize the program. All Muslim 
clerics (known as kiai) in East Java have been supporting the concept of Islamic 
economic restructuring. The institution of Islamic boarding school, known as one 
of the means of Islamic preaching, could be optimized to drive Islamic financial 
education in Indonesia. 

Figure 1. The Structural Model

X1.1 : Tangibles
X1.2 : Reliability
X1.3 : Responsiveness
X1.4 : Assurance
X1.5 : Empathy
X2.1: Past experience 
X2.2: Information and enthusiasm
X3.1: Visit to the place of worship

X3.2: Participation in religious activities
X3.2: Level of personal religious faith
Y1.1 : Overall satisfaction
Y1.2 : Confirmation of expectation
Y1.3 : Comparison of ideal 
Y2.1 : Say positive thinsg
Y2.2 : Recommed frend
Y2.3 : Continue purchasing

 X1.1 

 X3.1 

X3.2 

 X3.3 

X3.2 

 X3.1 

Customer Trust 
 (X2) 

Service Quality  
industri  (X1) 

ReligiousCom
mintment 

(X3) 

Y2.1 Y2.2 Y2.3 

Customer 
Satisfaction 

(Y1) 

Customer 
Loyality  (Y2) 

H4 

H6 

H5 
H2 

H7 

H1 

H3 

X1.2 X1.3  X1.4  X1.5 

Y1.1 Y1.1 Y1.1 



Rachmad Hidayat: Effects Of Service Quality  159

Hypotheses proposed in this study were: 
H1:  Service quality of Islamic banks had significant effects on customer 

satisfaction of Islamic banks in East Java;
H2:  Customer trust of Islamic banks had significant effects on customer 

satisfaction of Islamic banks in East Java;
H3:  Religious commitment of Islamic banks’ customers had significant effects 

on customer satisfaction of Islamic banks in East Java;
H4:  Services quality of Islamic banks had significant effects on customer loyalty 

of Islamic banks in East Java;
H5:  Customer trust of Islamic banks had significant effects on customer loyalty 

of Islamic banks in East Java;
H6:  Religious commitment of customers of Islamic banks had significant effects 

on customer loyalty of Islamic banks in East Java;
H7:  Customer satisfaction of Islamic banks had significant effects on customer 

loyalty of Islamic banks in East Java.
Structural Equation Modeling (SEM) analysis was used to test the 

hypotheses. In order to test the goodness of fit of the model developed in the 
structural equation modeling, the fit index was used. If the model was not quite 
good, it is necessary to modify the model by adding or deleting the links so 
that the value of chi-square will decrease with the value of the index (Ferdinant, 
2000).

Figure 2. The Result of Structural Model

Discussion

Hypotheses of the study were tested by partially examining each path of 
direct effects based on the results of the Structural Equation Modeling (SEM) 
analysis. Indirect effectswere the byproducts of direct effects.Hypotheses of 
direct effect were tested based on the value of CR> 1.96 and P<0.05, meaning a 



Al-Iqtishad: Vol. VII No. 2, Juli 2015 160

significant effect.Results of hypothesis testing are as follows.

Independent Variable Dependent Variable

Direct Effect Path 
Coefficient

Koef. 
Std Note

Service quality Customer satisfaction 0,68 Significant
Customer trust Customer satisfaction 0,18 Significant
Religious commitment Customer satisfaction -0,10 Non 

Significant
Service quality Customer loyalty 0,35 Significant
Customer trust Customer loyalty 0,74 Significant
Religious commitment Customer loyalty 0,64 Significant
Customer satisfaction Customer loyalty 0,35 Significant

After testing and analyzing the effects of service quality, customer trust 
and customer religious commitment on customer satisfaction and customer 
loyalty of Islamic banks in East Java, and after reviewing theoretical concepts 
and empirical supports regarding the causal relationship between the variables 
affecting customer loyalty of Islamic banks, the theoretical and empirical findings 
leading to the development of the theory generated in this study are: First, 
service quality and customer trust had effects on customer satisfaction of Islamic 
banks. Results showed that service quality was instrumental in creating customer 
satisfaction, while customer satisfaction was the dominant variable in building 
customer loyalty. Efforts to retain customers of Islamic banks will be realized by 
taking into account service quality and customer satisfaction in addition to the 
trust variable. Customer satisfaction was to be achieved by improving service 
quality provided to customers.

Superior service quality can be created by providing appropriate training 
to all employees on how to serve customers in accordance with their expectations. 
Training is provided not only to the division in charge of service encounter, but 
all parties should be involved in the training on service quality. Involvement of 
all parties will lead to excellent service quality so that the image of Islamic banks 
will be getting better in the eyes of customers. There is a need for evaluating the 
extent of customer loyalty of Islamic banks. Evaluation should be done on a regular 
basis so that the bank will always able to identify customer needs and respond 
them quickly. Customer loyalty can also be enhanced by placing an emphasis on 
the intimate relationship with customers. Programs long remembered in minds 
of customers will be able to strengthen the relationship with the customers, for 
example through Islamic banks’ involvement in religious activities.



Rachmad Hidayat: Effects Of Service Quality  161

Second, in addition to service quality, customer satisfaction and loyalty 
of Islamic banks are also influenced by customer trust. Customer trust is an 
important element affecting the quality of a relationship. Customer trust in the 
Islamic banks will increase the levels of customer satisfaction with Islamic banks. 
Customer satisfaction will increase the likelihood that the customers make 
repeated consumption. The high level of trust will have an effect of reducing 
the possibility of customer shift to non-Islamic banks. One effort that should 
be carried out by the management of Islamic banks to increase customer trust 
in order to enhance customer satisfaction as the predictor of customer loyalty of 
Islamic banks is to build the capacity of bank employees in serving customers. 
Customer trust can also be built from the attitudes of Islamic banks’ employees 
that promote honesty and do not take short-term advantage. Long standing 
relationship with customers can be well-maintained.

Third, not all study variables had significant effects on service quality. 
Religious commitment was shown to have no effect on customer satisfaction and 
customer loyalty of Islamic banks. This was due to the fact that customers of Islamic 
banks derived from a limited number of Muslims in East Java. Additionally, the 
variable religious commitment was customer personal commitment to practicing 
Islamic teachings. Customer religious commitment had no direct effect on service 
quality, but customers with their beliefs in the functions and benefits of Islamic 
banks straightly expressed their loyalty to Islamic banks. Customers chose and 
were loyal to Islamic banks based on their religious faith and obligations to 
apply Sharia in their everyday lives. Thus, any form of service provided did not 
have significant effect on customer satisfaction. Customers expressed their high 
loyalty to Islamic banks regardless their satisfaction as reflected by service quality 
of Islamic banking.

In addition to the underlying personal factors, negative relationship 
between religious commitment and customer satisfaction was also due to the 
limitations of the study. Negative effects on customer satisfaction and customer 
loyalty might be due to the fact that not all indicators of the variable religious 
commitment were able to explain comprehensively the relationships between 
customer satisfaction and customer loyalty. Another factor was that the short 
period of the study, leading to fairly limited number of observations. The study 
location also influenced the effects of this relationship. East Java was chosen as the 
study location since the province was considered as capable of implementing the 
program to accelerate the development of Islamic economics. Besides, as stated in 
the vision of Islamic economic development in Indonesia, East Java Province is to 
be developed as the largest Islamic economic region in Indonesia. East Java also 



Al-Iqtishad: Vol. VII No. 2, Juli 2015 162

has the potential for the development of Islamic economics in East Java, which 
is supported by 6,000 Islamic boarding schools. The management of Islamic 
boarding schools also asked the government to maximize the program. All kiai 
in East Java have been supporting the concept of Islamic economic restructuring. 
The institution of Islamic boarding school, known as one of the means of Islamic 
preaching, could be optimized to drive Islamic financial education in Indonesia. 
With Islamic banking restructuring, the economic concept can be realized with 
low-cost, simple, and blessed financing.

Conclusion

Results showed that service quality and customer trust of Islamic banks 
were predictors of customer satisfaction and customer loyalty of Islamic banks. 
Customer satisfaction of Islamic banks was the intervening variable linking 
service quality and customer trust of Islamic banks to customer loyalty of Islamic 
banks. Customer religious commitment of Islamic banks had no direct effect 
on service quality of Islamic banks. This was due to the fact that customers 
of Islamic banks derived from a limited number of Muslims in East Java. The 
variable religious commitment was the customer personal commitment to 
practicing Islamic teachings. Results of the present study have theoretical and 
managerial implications. Managerial Implications recommend the banks to 
enhance customer loyalty by placing an emphasis on improving service quality. 
Future research should investigate a different object of study with regard to 
the form of business and location of the object of study. There is a need for 
considering addition of other variables which are continuation and antecedents 
of customer loyalty. Empirical research models should be examined from the 
viewpoint of service providers.

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