Stimulating consumers’ switch from conventional to Islamic banking in Malaysia: where faith meets finance

Purpose This study aims to explore the factors driving customers’ intentions to switch to Islamic banking using an extended Norm Activation Model (NAM) in the context of Malaysia. It examines the mediating roles of anticipated emotions, namely, pride and guilt, and the moderating effects of religiosity and switching costs, providing valuable insights for both scholars and practitioners. Design/methodology/approach This study employed a quantitative cross-sectional survey design to collect data from 393 participants in the Kuala Lumpur and Kelantan regions in Malaysia. Data were collected using a structured questionnaire and analyzed through structural equation modeling (SEM) with AMOS 24. Findings The study’s findings indicated that the awareness of the ethical consequences of engaging in conventional banking over Islamic banking positively impacts the ascribed responsibility for using Islamic banking services, subsequently resulting in personal norms and switching intentions. Further, the findings revealed that anticipated pride and guilt mediate the relationship between ascribed responsibility and personal norms for using Islamic banking. Additionally, the findings suggested the role of switching costs and religiosity in moderating the relationship between personal norms and switching intention to Islamic banking. Practical implications The study highlights practical implications for Islamic banking institutions, regulators and policymakers, emphasizing the importance of sensitizing customers to ethical and religious concerns. By focusing on the negative consequences of conventional banking and using emotions in awareness campaigns, institutions can stimulate switching intentions and promote Islamic banking adoption effectively. Originality/value This empirical study is among the initial attempts at exploring Muslims’ adoption of Islamic banking through their sensitization to the negative consequences of using conventional banking over Islamic banking. The study focuses on their ethical and religious motivations rather than simply financial incentives. By extending the NAM, it incorporates personal norms, emotions, switching costs and religiosity, providing a comprehensive framework for understanding customer behavior in Islamic banking.