An empirical analysis of islamic online banking in Malaysia(with Essay

An empirical analysis of islamic online banking in Malaysia(with empirical evidences) - Essay Example In addition, Malaysian Islamic banking assets are valued at U.S $ 65.5 billion and a growth rate of 18-20% per annum (Mckinsey, 2008). This suggests Malaysia has elaborate mechanisms that facilitate Muslim-specific financial needs. Consequently, as a result of its development, Islamic banking in Malaysia offers a myriad of sharia compliant online products to its customers. Islamic banking in Malaysia had its activities launched in 1983 after the establishment of the Bank Islam Malaysia Berhadad (BIMB) (Khir et al. 2008). Since its establishment, the banking system has developed to include a wide range of products, with Malaysian Islamic financial system considered as the most progressive system in offering different products in the Islamic economic world (Haron & Ahmed, 2011). Retail banking is one of the major products in Malaysian Islamic banking system. Retail banking targets a wide range of customer segment that include the awqaf employees, religious conservatives, miftis and any employee of the ministry of Muslim affairs (Garbois et al., 2012).Online products offered under this product include sms banking, credit card-i online application, all which account holders can operate online. Moreover, other services such as e-sadaqah, e-zakat. Payment of bills, reloading accounts, inter and intra bank transfers, which retail account holders can effect o nline through internet banking (Bank Islam Malaysia, 2009). Garbois et al. (2012) noted the Islamic banking sector in Malaysia has extended corporate banking products that target leading investors in the country. Through online banking services, corporate account holders in Malaysia may view the status of their accounts, loan balances, the status of any payments, view and download statements, effect intra and interbank transfers, pay bills, facilitate foreign funds transfers and make automatic payment to pay rolls through Autopay. Khir et al. (2008) further noted that a major product