EXAMINING THE IMPACT OF TRUST AND IMAGE ON THE LOYALTY OF ISLAMIC BANKING CLIENTS IN INDONESIA: AN EMPIRICAL STUDY

Exploring the multifaceted dynamics of customer loyalty in Islamic banking, this study investigates the roles of trust and corporate image in Eastern Indonesia's Islamic banking sector. Employing structural equation modelling (SEM) as the analytical tool, the research uncovers the intricate interplay between corporate image, trust, and customer loyalty. Results indicate that a solid corporate image significantly and positively influences customer trust. This trust is crucial in boosting customer loyalty towards Islamic banking services. Highlighting the importance of corporate image, the study reveals its role as a cornerstone in building and reinforcing customer trust, which is crucial for fostering long-term customer relationships. The research provides strategic insights for Islamic banks in Eastern Indonesia, suggesting that a focus on enhancing corporate image and trust can lead to increased customer loyalty. This contribution enriches the understanding of loyalty dynamics within the Islamic banking sector, underscoring the significance of trust and corporate image in the unique market context of Eastern Indonesia.


INTRODUCTION
Islamic banking, often called interest-free banking, is a financial institution that operates and develops its products based on the principles of the Quran and the Hadiths of Prophet Muhammad (peace be upon him).In Indonesia, Islamic banking has become a crucial part of the economy, buoyed by the substantial Muslim population, the religious nature of consumers, and the 2003 fatwa by the Indonesian Ulema Council (MUI) declaring conventional bank interest as forbidden (haram).The enactment of Law No. 21 of 2008 on Islamic Banking has provided a solid legal foundation for developing Islamic banking.However, despite these potentials, Islamic banking's market share in Indonesia is substantially smaller compared to conventional banking.
Islamic banks, grounded in Sharia principles in their products and operations, face public scepticism regarding their adherence to Sharia.This doubt is understandable, given that Islamic banking is still relatively new and evolving compared to its conventional counterpart, necessitating ongoing improvements and innovations (Alam et al, 2019).Nevertheless, this does not detract from the Sharia compliance of Islamic banks; on the contrary, it motivates them to enhance their performance (Alshater, 2021).

LITERATURE REVIEW 2.1 Corporate Brand Image
As conceptualized by Gray and Balmer (1998), corporate brand image is the mental representation that stakeholders have of a company, triggered by the corporate name or logo.In banking, Rahman (2016) refines this to mean the collective assessment held by an individual about a bank.In this study, the corporate brand image of Islamic banks is viewed as the comprehensive perception customers hold, shaped by their understanding and interactions with various bank attributes.
Scholars have explored corporate brand image through diverse lenses, but a universally accepted measurement method still needs to be discovered.Theoretical approaches to images encompass attitudes, personality traits, associations, and perceptions.Among these, theories such as the tri-component attitude model, Aaker's (1997) brand personality concept, Anderson and Bower's (2014) associative network theory, and gestalt psychology theory have been prominent.This study aligns with Gestalt psychology theory, treating the image as a singular construct influenced by multiple factors.It is measured using an overall corporate image scale, accounting for functional attributes (Tubillejas et al., 2011), emotional attributes, or both (Ibrahim et al., 2016).Specifically, research in the Islamic banking context has highlighted the unique presence of a spiritual brand attribute closely tied to individual belief systems (Ab Hamid et al., 2019).In this study, the corporate brand image of Islamic banks is perceived as the overall impression formed by customers, influenced by three key brand attributes: functional, emotional, and spiritual.

Trust
Trust, a complex and multifaceted concept, plays a pivotal role in the Islamic banking context.As Dimitriadis et al. (2011) outlined, trust encompasses a range of dimensions and implications.Within Islamic banking, trust is not just a business consideration but a moral imperative deeply rooted in Islamic teachings.Iqbal & Mirakhor (2007) emphasize that Islam places significant importance on trust, considering it a fundamental personality trait that individuals should embody in their societal roles.
The philosophical foundation of trust in Islamic banking is symbolized by trustworthiness, honesty, equity, and moral values.These values are ethical imperatives and crucial elements that enhance the relationship between banks and their customers.This perspective aligns with the broader Islamic principle of fairness and equality among individuals.In Islamic banking, trust extends beyond mere transactional interactions; it is intertwined with ethical conduct and adherence to Shariah principles, as noted by Kayed & Hassan (2011).Compliance with Islamic laws forms the backbone of trust in this sector, reinforcing the need for ethical banking practices and customer relationships.

Loyalty
Loyalty in the context of customer behaviour is a multifaceted concept, encompassing a range of emotional attitudes and mental states towards products and services.Kiseleva et al. (2016) define loyalty as an emotional attitude that a customer develops towards specific products or services.This definition is expanded upon by Fraering & Minor (2013), who identify four distinct phases of loyalty: cognitive, affective, conative, and decisive.These phases collectively represent a customer's journey from initial awareness to deep-seated loyalty towards a brand or product.Kishada & Wahab (2013) further emphasize that loyalty manifests as the intention or tendency of customers to repurchase a product or engage with another product from the same company.
In recent times, the focus of marketing strategies has shifted from attracting new customers to retaining existing ones and fostering their loyalty to the enterprise, as noted by Kiseleva et al. (2016).This shift is due to the economic benefits of long-term customer relationships, as selling to existing customers is typically more accessible and cost-effective than acquiring new ones.Zeithaml et al. (1996) articulated that the goal of a company's success hinges on establishing strong, long-lasting relationships with its customers, leading to robust loyalty.According to their research, indicators of solid customer loyalty include positive word-of-mouth, recommendations, repeat purchases, and advice.Hoq et al. (2010) further elaborates on these indicators: 1. Saying positive things: This involves customers expressing positive opinions about a product or service, often through reviews, storytelling, or sharing experiences.2. Recommending to friends: This occurs when a customer refers friends to the same product or service, driven by their positive experiences.3. Continued purchasing: demonstrated when a customer repeatedly buys a product or service, showing a pattern of loyalty over time.4. They are providing advice.When loyal customers offer suggestions or advice about using a service or product, usually upon request,

Conceptual Framework
The hypotheses were developed as follows: H1.There is a positive influence of corporate brand image on customer trust in Islamic Banking.H2.There is a positive influence of corporate brand image on customer loyalty in Islamic Banking.H3.There is a positive influence of trust on customer loyalty in Islamic Banking.This research employs a descriptive approach, aiming to delineate or depict a broader issue, as outlined by Malhotra (2020).The method used for data collection is the single cross-sectional design, which involves selecting a sample from a population and gathering as much information as possible from this sample at a single point in time.Prior to the primary data collection, a pre-test was conducted with 30 respondents to minimize potential issues.This questionnaire pre-test assesses its reliability and validity, ensuring the accuracy and consistency of the data to be collected.

Operationalization of variables
The study focuses on analysing how image and customer trust influence customer loyalty in the context of Islamic banking.The variables and their respective indicators are structured as follows: 1  (1996).These indicators are designed to measure the extent of customers' loyalty toward the Islamic bank, capturing both their attitudes and behaviours that demonstrate loyalty, such as positive word-of-mouth, recommending the bank to others, repeated business, and willingness to offer advice about the bank's services.

Sampling Techniques
The research analyzed three central Indonesian Islamic commercial banks: Bank Syariah Indonesia, Bank Muamalat, and Bank Danamon Syariah.The focus population comprised all customers of Islamic commercial banks in Makassar, Indonesia.A purposive sampling technique was employed to select a representative sample from these banks.The criteria for respondents targeted in this study were men and women of productive age, ranging from 21 to 50 years old.
This study employed structural equation modeling (SEM) with the Maximum Likelihood Estimator (MLE) as the analysis tool.According to Wijanto (2008), the appropriate sample size for MLE is at least five respondents for each observed variable in the model.The minimum sample size calculation for this research is based on the formula: Minimum Sample = Number of Survey Items x 5. Given that there are 12 items in the questionnaire, the minimum sample size required is 12 x 5, which amounts to 60 respondents.This sample size is deemed adequate to effectively conduct SEM analysis for the study, ensuring that the model is appropriately powered to test the relationships between the variables under investigation. https://ecbis.net/index.php/go/index

Data Processing
In this research, data collection was carried out through two primary methods: distributing questionnaires and conducting a literature study.The questionnaires, designed to be selfadministered, were provided to the respondents to fill out independently.This approach allows participants to complete the questionnaire at their convenience, ensuring more thoughtful and accurate responses.The combination of questionnaire data with insights gained from the literature study provides a comprehensive understanding of the research topic, encompassing both empirical data from respondents and theoretical perspectives from existing literature.In this study, a sevenpoint Likert scale was employed to assess customer perceptions regarding image, trust, and loyalty.This scale ranged from "strongly disagree" (represented by a score of 1) to "strongly agree" (represented by a score of 7).
For the analysis of this data, Structural Equation Modelling (SEM) was utilized, operated through the LISREL software, version 8.51.SEM is a statistical analysis model that examines the relationships among variables, as noted by Hair et al. (2006).This method is particularly suitable for research involving multiple variables and complex relationships, as it can effectively model and test the interactions between observed and latent variables.In the context of this study, SEM enables a thorough investigation of how image, trust, and loyalty are interrelated in the realm of Islamic banking.

Respondent Profile
The questionnaire was distributed to 150 participants, resulting in 100 completed questionnaires, indicating a response rate of 66.7%.Notably, the gender distribution of respondents was reasonably balanced, with males constituting 56% and females 44% of the respondents.The age range of the respondents was diverse, with the largest group (34%) being between 36 and 40 years old.An overwhelming majority of 99% identified as Muslims, while a negligible 0.1% adhered to other religions.This predominant presence of Muslim respondents aligns with the findings of Amin et al. (2013), who identified a similar trend among Islamic banking customers.Regarding educational background, more than half of the respondents (51%) held bachelor's degrees.In terms of employment, a significant 70% were employed in the private sector.Income-wise, 55% of the respondents reported monthly earnings ranging between Rp 2,500,000 and Rp 5,000,000.Geographically, 60% of the population resides in the central region of Makassar.Focusing on banking preferences, 59% of the respondents were customers of Bank Syariah Indonesia, 31% utilized services from Bank Muamalat, and the remaining 10% were patrons of Danamon Syariah Bank.

Measurement Model
A goodness of fit test was conducted to obtain favorable values of chi-square and RMSEA (Root Mean Square Error of Approximation).In the analysis, the chi-square value was recorded at 189.90, accompanied by a p-value of 0.000.Concurrently, the RMSEA indicated a good fit for the overall measurement model, as evidenced by its value being within the acceptable threshold, precisely at 0.071, which is equal to or less than the standard benchmark of 0.08.This suggests that the model demonstrates a satisfactory level of fit to the data.
The validity test was implemented with the criterion that the Standardized Loading Factors (SLF) must be greater than or equal to 0.6.For the reliability test, values of SLF and errors (ej) were extracted from the output of the Lisrel 8.51 path diagram.These values were then used to calculate Construct Reliability (CR) and Variance Extracted (VE).The criteria for acceptable levels of CR and VE were established as values equal to or greater than 0.7 and 0.5, respectively.This approach ensures that both the validity and reliability of the model are rigorously assessed and meet established thresholds.

Structural Model
Following the analysis of the measurement model, the subsequent step involves the examination of the structural model.In the preceding stage, the fit of the measurement model was estimated through a process of two specifications to achieve a model that is adequately fit.In this structural model, the goodness of fit (GOF) will also be re-evaluated to ascertain the model's adequacy.Moreover, this phase will delve into understanding the causal relationships or the influence of one latent variable on another.Specifically, it aims to explore the interconnections among the latent variables: Image, Trust, and Customer Loyalty.This examination is crucial to comprehend how these constructs interact and impact each other within the structural framework of the study, thereby providing insights into the dynamics of these key factors in relation to customer loyalty.
The outcomes of the goodness of fit test for the structural model revealed a chi-square value of 150.37, accompanied by a p-value of 0.00 and an RMSEA of 0.065.These values mirror those https://ecbis.net/index.php/go/indexobtained in the final suitability test of the measurement model, indicating that they satisfy the established criteria for a good model fit.This consistency between the measurement and structural models in meeting the fit criteria underscores the robustness and appropriateness of the structural model in the context of the study.

R 2
The coefficient of determination (R²) can be observed in the reduced form equation derived from the output of the structural model analysis.The impact of trust and image on customer loyalty is indicated by an R² value of 0.43.This suggests that variations in image and trust explain 43% of customer loyalty.This statistical measure is significant as it quantifies the extent to which these two factors, image, and trust, contribute to understanding and predicting changes in customer loyalty.A 43% explanation rate implies a substantial influence of these variables on customer loyalty, highlighting their importance in the model and potentially guiding strategic decisions related to customer relationship management and branding.

Discussion
The research under discussion substantiates the existence of differences in image, trust, and customer loyalty among customers in Indonesia.A significant and positive relationship was found between image and customer trust.This underscores the importance of a good image for banks in maintaining their market position and establishing long-term customer relationships.These results align with the findings of Awan et al. (2018), who noted the influence of a bank's image on consumer trust in non-Islamic banking contexts.Similarly, Hoq et al. (2010) emphasized the critical role of a positive image for Malaysian Islamic banks in sustaining their market position and fostering enduring customer relationships.Additionally, the research indicates a significant positive effect of customer trust on their loyalty to financial institutions.This finding is consistent with the works of Utami (2015), and Hoq et al. (2010), where trust emerged as a critical factor directly influencing customer loyalty.Mosavi and Ghaedi (2012) further concluded that trust has the most significant impact on customer loyalty.Customer loyalty can be enhanced through strategic marketing initiatives to build consumer trust, commitment to service, proactive communication, and effective conflict resolution.These collective findings highlight the pivotal role of trust in the banking sector, influencing both customer loyalty and the long-term success of banking institutions.

CONCLUSION
The research demonstrates that image and customer trust are crucial factors in enhancing customer loyalty towards Indonesian Islamic banks.Image is shown to influence building customer trust positively and significantly.This indicates that when a bank maintains a positive image, it will likely foster greater customer trust.Furthermore, customer trust is found to have a positive and significant impact on increasing customer loyalty.This relationship suggests trust is critical to customers' loyalty to their financial institutions.Additionally, the combined effect of image and customer trust on developing customer loyalty is positive and significant.This dual influence underscores the intertwined nature of these variables: a robust and positive image bolsters customer trust, which, in turn, enhances customer loyalty.The findings affirm the importance of these factors in the strategic planning and operational practices of Indonesian Islamic banks, particularly in their efforts to cultivate and maintain a loyal customer base.

Managerial Implication
The findings of this study offer valuable managerial implications for the management of Islamic banks, particularly in terms of brand positioning strategies as follows: a. Spiritual image emphasis: Islamic banks are advised to cultivate a spiritual image closely tied to Islamic beliefs and ethics to foster a favourable corporate brand image.This approach aligns the bank's image with its target customer base's core values and expectations.b.Communication strategy on Islamic compliance: To alleviate doubts and reinforce trust, Islamic banks should implement communication strategies emphasizing the compatibility of their banking products and operations with Islamic principles.This can help assure customers of the bank's commitment to Islamic values.c.Fostering customer loyalty through comprehensive branding: The significant relationship between corporate brand image and customer loyalty underscores Islamic banks' need to project a favourable overall image to retain customers.These banks must focus not only on the functional aspects of the brand but also on enhancing emotional and spiritual attributes.By implementing these strategies, Islamic banks can strengthen their brand positioning, enhance customer trust and loyalty, and ultimately succeed in a competitive market environment.Focusing on a holistic brand experience-encompassing functional, emotional, and spiritual aspects-is crucial for Islamic banks to differentiate themselves and resonate deeply with their customer base.

Figure
Figure 1.Research framework . Corporate Brand Image (X1): This variable is defined by several indicators.The indicators for image include reputation (X11), efficiency and effectiveness (X12), attractiveness (X13), and improvement and innovation (X14), as identified by Hoq et al. (2010).These indicators aim to capture the multifaceted nature of a corporate brand's image in the banking sector. 2. Brand Trust (X2): The trust variable is measured through indicators such as Sharia compliance (X21), as mentioned by Firdaus (2014), along with safety (X22), concern for customers (X23), and legal compliance (X24), with the latter three indicators being based on the work of Hoq et al. (2010).These indicators collectively reflect the degree to which customers feel the bank aligns with Islamic principles, offers secure services, shows concern for customer needs, and adheres to legal standards.3. Customer Loyalty (Y1): The indicators for customer loyalty include being a positive agent (Y11), making recommendations (Y12), continuing patronage (Y13), and providing advice (Y14), as outlined by Hoq et al. (2010) and Zeithaml et al.

Table 1
Validity and reliability of measurement model