Switching Barrier Factors in Islamic Banking and the Effects on Customer Retention

Islamic banking industries in Indonesia is growing rapidly. Consequently, the hyper competition among them can't not be avoided. Every Islamic banking tried hard to achieve competitive advantage by attracting new customer and keeping the old customer to retain. In this situation, research about switching barrier factors in Islamic banking is very important for understanding further the kinds of switching barrier factors and the contribution to customer retention. The objective of research is to explore the switching barrier factors that retain customer not to switch from Islamic banking and their contribution to customer retention. Research involved 250 Islamic banking customers in Surabaya as samples. By using exploratory factor analysis, the result indicates that there are five factors that underlying customer not switch from Islamic banking. These factors namely: the way of relationship approach to customers, compliance to Islamic principles, service recovery, switching cost and risk perceived factor. By using discrimination analysis the result indicate that there is significantly differences in switching barriers factors between customer based on the intention to retain