Assessing the business ethics of Saudi Arabian Islamic banking sector: an analysis of banks’ employees and customers perspectives

Islamic banking involves the conduct of banking and finance activities based on the values derived from the body of Islamic law known as Shari’ah. The infusion of ethical and social objectives into banking activities is a fundamental requirement and distinguishing hallmark of Islamic banking. Islamic banking is deeply entrenched in the socio-economic fabric of Saudi Arabia. Saudi Arabia holds a very important place in the history of Islam. It is in the area that is now Saudi Arabia that Prophet Mohamed (peace be upon him) received the revelation of the Holy Quran and largely gave the Sunnah teachings that form the body of the holy knowledge of Islam. The first disciples of Prophet Mohammed (peace be upon him) started preaching, turning converts, and making disciples in the area that is modern-day Saudi Arabia. Due to these happenings, Saudi Arabia is viewed as the cradle of Islam. As such, faith-based institutions that operate in Saudi Arabia are on the microscope of the public eye. Islamic banks operating in the Kingdom of Saudi Arabia are no exception. By virtue of being faith-based institutions, stakeholders have high expectations on matters to do with ethics when it comes to Saudi Arabian Islamic banks. This research aims to present an evaluation of the ethical performance of Islamic banks from the perspectives of customers and employees. Given that there is limited research conducted on the business ethics of Islamic banks at the global level in general, and in Saudi Arabia in particular, this research will extensively use appropriate research tools and methods to study the Saudi Islamic banking situation with regards to the ethical performance of Islamic banks and generate crucial conclusions pertaining to the gaps, if any, between the ideal expectations of the ethical performance and what is practiced by the Islamic banks from the perceptions of employees and customers. Correspondingly, this research aims to make contributions that fill up information gaps in the extant body of literature with regards to the business ethics of Saudi based Islamic banks. This research applies the mixed-method approach, where qualitative and quantitative tools are used. The research study collects data from both primary and secondary sources through literature review as well as from the questionnaires administered to the employees and customers of four Islamic banks in Saudi Arabia. The data are analysed statistically through descriptive statistics and inferential statistics by using the statistical software known as SPSS. The findings reveal that there is a chasm between the perceptions of customers and employees. Customers are majorly ambivalent about the ethical performance of Saudibased Islamic banks. On the other hand, the employees of Islamic banks generally approve of the ethical performance of these banks. The findings also suggest that there is room for improvement for Islamic banks when it comes to ethical performance