Behavioural intention of Libyan bank employees towards transformation to the Islamic banking system

Abstract

The transformation to the Islamic banking system is one of the most challenging and critical issues faced by the Libyan conventional banking sector. Nevertheless, for the process to be successful, bank employees would have to play a prominent role in achieving this goal. This study investigates the behavioural intention of Libyan bank employees towards supporting the transformation to a full-fledged Islamic banking system in Libya. In particular, this research adopts the theory of planned behavioural (TPB) to understand the behavioural intention of Libyan bank employees towards the transformation process by testing the effects of attitude, subjective norms (social influence) and perceived behavioural control on employees’ behavioural intention as well as, religiosity, government support, and knowledge of Islamic banking products in the model of study. Furthermore, the role of training was examined to understand its moderating effect on the relationship between knowledge of Islamic banking products and behavioural intention. Moreover, this study employed a survey questionnaire of 323 employees of 10 conventional Libyan banks. To analyse this relationship, the study adopts a quantitative approach using Structural Equation Modelling (SEM). The findings of this research revealed that attitude, religiosity and subjective norms have a significant positive influence on the behavioural intention of Libyan bank employees. Also, the findings revealed that the attitude towards transformation is the most important factor that determines behavioural intention among bank employees, which clearly indicates that they are likely willing to support the transformation process and adopt Islamic banking. In the same context, the study suggested that religiosity or (religious influence) and subjective norms (social influence) play the determining role of behavioural intention towards the transformation process of shifting to a full-fledged Islamic banking system in Libya. The findings also indicated that the theory of planned behavioural (TPB model) is a valid model in predicting banking employee’s behavioural intention to transform into Islamic banking in Libya. On the other hand, the findings revealed that perceived behavioural control, government support and knowledge of Islamic banking products were found to have an insignificant influence on employees’ behavioural intention. This indicates the lack of technical infrastructure regarding the adoption of Islamic banking within the Libyan banking sector. In addition, the findings revealed that training is not statistically significant as a moderator between knowledge of Islamic banking and behavioural intention. Therefore, the lack of training and technical infrastructure will be the subject of further research to assist policymakers in designing a smooth transformation process. These findings help decision-makers to develop a strategy for the transformation process by utilizing the factors that contribute to a smooth transformation effectively. This research provides insights and guidance for banks’ managers to manage employees’ readiness to support the transformation process and avoid resistance during the time of transformation.