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New Horizons in Bank Mergers: A Quantum Spherical Fuzzy Decision-Making Framework for Analyzing Islamic and Conventional Banks Mergers and Enhancing Resilience

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11 April 2023

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12 April 2023

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Abstract
This study explores the implications of merging two fundamentally different types of banks: Islamic and conventional banks. The research aims to provide insight into such a merger's unique opportunities and challenges and offer strategic guidance for future mergers. A balanced scorecard-based strategic analysis using Quantum Spherical Fuzzy Decision-Making Approach was used to develop the merged bank's short- and long-term strategic plans. The balanced scorecard included 12 key performance indicators (KPIs) in 4 groups, and the methodology also incorporated several questions to guide the analysis. The study results offer valuable insights into the potential opportunities and challenges of merging these two types of banks and strategic recommendations for stakeholders at all levels. The study is a valuable guideline for future mergers between similar or different types of banks. Overall, the findings suggest that a well-planned merger strategy is essential for avoiding challenges and maximizing the benefits of merging Islamic and conventional banks. By integrating the strengths of both types of banks, a merged entity could create a competitive advantage and potentially improve financial performance. However, this requires careful consideration of cultural differences, regulatory challenges, and other factors that could impact the merger's success.
Keywords: 
Subject: Business, Economics and Management  -   Finance

1. Introduction

Since the early 20th century, bank mergers have been a topic of interest for economists and financial experts for many decades. However, the frequency and significance of bank mergers have varied over time. The first recorded bank merger in the United States occurred in 1904. The National City Bank of New York merged with the Bank of the Manhattan Company (Abbot, 1929). This merger was driven by the need to increase efficiency and reduce competition in the banking industry (Carletti et al., 2007). The Great Depression of the 1930s, however, led to a decline in bank mergers as many banks failed. Eventually, the government implemented regulations to stabilize the industry. After World War II, the banking industry experienced growth and consolidation. This was driven by the economy's growth and the increasing complexity of the banking business (Reinhart & Rogoff, 2013). Additionally, technological and regulatory development made it easier for banks to merge and expand their operations. The 1960s and 1970s saw many bank mergers due to this trend (Bawani et al., 2016).
In the 1970s, the banking sector started to deregulate faster. This included the removal of restrictions on interest rates, loosening branching restrictions, and repealing the Glass-Steagall Act, which had separated commercial and investment banking (Sherman, 2009). As a result, banks could expand their operations and enter new markets. This increased competition led to a wave of bank mergers, as smaller banks could not compete with larger, more diversified banks.
The consolidation trend of the banking industry has also continued in recent years. This is driven by the need to comply with new regulations and the increasing pressure to control costs. Additionally, the ongoing digital transformation in banking has enabled banks to serve customers online and expand their reach. The advent of fintech companies and the growing use of digital payments have pressured traditional banks to modernize their offerings to stay competitive.
The impact of bank mergers on the banking industry and the economy is a long-living debate (Rezitis, 2008; Al-Sharkas et al., 2008; Piloff & Santomero, 1998). On the one hand, bank mergers can increase efficiency and cost savings for the merged entity, thus benefiting consumers. They can also lead to the formation of more diversified banks that can better weather economic downturns. On the other hand, bank mergers can decrease competition, resulting in higher consumer prices and stagnant innovation, and lead to a concentration of power in the hands of a few large banks. In many aspects, such a financial system is questionable in its health (Demirguc-Kunt & Levine, 2000). Eventually, the reasons for bank mergers, their historical development, and their impact on the banking industry and the economy have evolved and continue to be the subject of ongoing research and debate.
In today's general environment, an Islamic and a conventional bank usually do not have many reasons to merge. This is because it brings together two fundamentally different banking systems with distinct characteristics and objectives. Islamic banking is based on Sharia principles and prohibits riba, gharar, maysir, and others. Instead, Islamic banks engage in profit and loss sharing (PLS) transactions, in which the bank and the customer share the profits or losses of the venture (Lewis, 2008). On the other hand, conventional banks make most of their profit from interest payments, unlike their Islamic counterparts (Lewis, 2008).
One of the benefits of merging an Islamic and conventional bank is the opportunity to create a more diversified and resilient financial institution. By combining the strengths of both banking systems, the merged entity can mitigate the risks associated with a dependency on a single source of income, such as interest-based lending (Ullah, 2022). Furthermore, the merger allows the entity to tap into new markets and customer segments, as it can offer a broader range of financial products and services to customers.
Another benefit of the merger is the opportunity for the Islamic bank to expand its customer base and increase its market share. Islamic banks typically have a limited customer base, as their products and services mainly target Muslim customers. However, by merging with a conventional bank, the Islamic bank can reach a broader customer base and expand its market share (Purnamasari et al., 2022).
However, the merger of an Islamic and conventional bank also poses several risks. One risk is the potential for operational challenges, as the merged entity will have to integrate different systems and processes, which can be time-consuming and costly. Another risk is the potential for cultural and management conflicts, as the merged entity will have to navigate the two banking systems' different cultures, values, and management styles (Lewis, 2008).
Another risk is the potential for regulatory challenges, as the merged entity must comply with the regulatory frameworks of both the Islamic and conventional banking systems. This can be particularly challenging in countries where the regulatory framework for Islamic banking is still evolving. However, if the type of banking is set up into one of the regulatory frameworks, this dual framework problem can be solved significantly.
An example of an Islamic and conventional bank merger has been completed recently in Qatar between Masraf al-Rayan and Al Khalij Commercial Bank, completed in November 2021 (Masraf al-Rayan, 2021). This merger has many unique characteristics in the region, such as being the first merger between two publicly listed banks and the merged bank operating as an Islamic bank (Masraf al-Rayan, 2021). As this paper contributes to the literature with an analysis of Islamic and conventional bank mergers, the Masraf al-Rayan and Al Khalij Commercial Bank merger is an appropriate case study for investigating the effects and results of such a merger. In the analysis section, the primary purpose will be to measure the potential and the performance of the merger process and the merged entity. Therefore, the balanced scorecard technique is appropriate for analyzing this specific merger.
The balanced scorecard technique is a tool used to evaluate the performance of a business, institution, or event. It considers multiple perspectives, including financial, customer, internal processes, and learning & growth. The balanced scorecard is especially effective in assessing a business's overall health and success and can be applied to various industries, including banking. One main detail about the balanced scorecard technique is that the scores could be maintained directly by industry experts for high accuracy in results. It reduces the misinformation risk as the information is obtained directly from point zero (Luo et al., 2012). The availability of experts who took a role in the Masraf al-Rayan and Al Khalij Commercial Bank merger allows the opportunity to apply a balanced scorecard rating from these experts, which is the main reason for selecting this methodology for the study.
The motivations and outcomes of the Masraf al-Rayan and Al Khalij Commercial Bank merger are aimed to be investigated through the designed scorecard. We will provide a comprehensive understanding of this merger and its context through a case study approach and the integration of multiple data sources. The findings of this study will contribute to the existing literature on bank mergers and provide insights for other Islamic and conventional banks considering a merger. Additionally, the study will offer a valuable reference for policymakers and regulators as they consider the implications of such mergers for the stability and growth of the Islamic finance industry.
Some of the key results of the paper are summarized in this part. Firstly, bank mergers are intricate procedures that call for proactive financial policies to increase the combined bank's long- and short-term resilience. Such tactics can guarantee stability and operational continuity while removing potential dangers and structural interruptions. It is crucial to have a solid financial plan that considers potential difficulties when combining two banks because stakeholders including clients, investors, and regulators actively monitor the financial stability of the merged bank. Proactive financial strategies should also anticipate potential possibilities and plan the best course for capitalizing on them, including allocating resources and generating desirable synergies between the two financial systems. Consequently, the most crucial key performance indicator (KPI) for bank mergers is resilience with proactive financial initiatives.
The continuity of the amalgamated bank depends on meeting the needs of consumers who use Islamic finance, as customer loyalty and retention are essential for long-term success. Understanding the demands of both consumer groups is crucial since Islamic banking services have distinct needs and expectations than traditional banking services. Such a plan will assist the combined company in maintaining financial products that are Shariah-compliant for clients of Islamic banks and competitive rates for consumers of conventional banks. The merged bank will have a reputation in the market, retain client loyalty and retention, and improve the likelihood of having a competitive advantage over other banks in the market if the needs of both customer groups are met. Therefore, satisfying customer needs with Islamic banking services is another critical KPI for bank mergers.
Finally, for a combined bank to successfully manage the opportunities and difficulties in the financial sector, it is essential to boost agility and human capital. High agility will guarantee the bank's responsiveness to changes in industry legislation or levels of competition. On the other side, qualified personnel will successfully manage risks, deliver top-notch customer service, and guarantee the bank's strong financial performance. Consequently, one of the most crucial KPIs for a bank merger seems to be an increase in agility and human capital. While it only affects two other KPIs—resilience with proactive financial measures and an increase in agility and human capital—continuity of profit looks to be less important in a bank merger.
The rest of the paper will continue as follows; chapter two will discuss the existing literature about bank mergers, Islamic-conventional bank mergers, and using the balanced scorecard technique for analyzing the performance of a bank merger. Chapter three will present the data and methodology, and chapters four and five will discuss the results. Finally, chapter six will include concluding remarks.

2. Background for the Selection of the Model

Mergers and acquisitions (M&A) are familiar strategies firms adopt to achieve external expansion. According to Oh, Peter, and Johnson (2014), M&A is a measure that firms use to expand their operations and gain a competitive advantage in the market. Sheidu and Yusuf (2015) define a merger as blending two or more companies. In a broad sense, M&A encompasses companies' coming together, combining, fusion, and synergy, in which one company loses its identity and the other retains it. Anyanwu and Agwor (2015) view mergers as a "strategic alliance" in which two firms work together to pursue similar objectives. Ahmed and Ahmed (2014) also described mergers as an amalgamation involving combining two previously independent entities into a single entity. This can be achieved through "Absorption or Consolidation." Absorption is achieved when one of the entities retains its name (Anyanwu & Agwor, 2015).
The reasons for banks to merge can be classified based on four hypotheses: diversity, synergy, market share, and manager benefit maximization. The Synergy Hypothesis states that merged banks would create synergies through economies of scale, resulting in increased stock prices and profitability. The Diversity Hypothesis suggests that mergers provide banks with diversified product and service portfolios while minimizing risks with a broader geographical exposure. This risk-mitigating diversification would increase stock prices for both the target and acquirer banks. The Market Share Hypothesis states that the merger of two competitors would result in decreased price competition due to increased prices and decreased supervisory costs. The hypothesis of Manager Benefit Maximization states that bank managers would prefer the merger to increase shareholders' profitability, maintain job security, and maximize their benefits. However, this may not lead to an increase in public welfare (Palombo, 1997).
Correa (2006) studied international bank acquisitions between 1994 and 2003, using banks from the USA, Germany, France, Brazil, Argentina, and Panama. The study found that the performance of the banks improved after only two years had passed from the transaction date. Lin (2009) focused on the scale dimension as a significant factor in cross-border bank mergers and acquisitions. Using World Bank data was determined that large-scale banks with high profits have a greater tendency for acquisition compared to smaller ones and that low cost is also an essential indicator for bank selection.
Mehra (2011) evaluated mergers and acquisitions within the American banking system by analyzing a 1986-2008 quarter-based dataset using a logit model. The study found that banks that had undergone mergers and acquisitions in their history were more inclined towards consolidation and that regulations also influence banks towards consolidation. Large-scale banks strategically position mergers to increase their market share, and it was agreed that liquidity issues during the merger process negatively impact earnings.
The literature does not cover any analysis of an Islamic and a conventional bank merger analysis or a more general focus that investigates the two types of bank mergers. Therefore, to the best of our knowledge, this study fills an important gap in the existing literature by investigating such a merger.
In the existing literature, few studies utilized the balanced scorecard technique for bank M&As. Lindblom & Von Koch (2002) analyzed the cross-border bank M&As in the E.U. market by using a balanced scorecard technique. Their research suggests that the M&A strategy is a good fit as the banks complement each other well in different aspects of the model. The authors indicate that a merger's success will depend on the ability of the banks to utilize each other's strengths and characteristics effectively.
Oghuvwu & Omoye (2016) studied the relationship between the M&A of banks and their financial performance before and after the merger. The balanced scorecard is used to analyze the financial indicators of both banks during pre- and post-merger periods. Authors signify a solid positive relationship between M&A and bank performance in their datasets.
As visible from the existing literature, Islamic and conventional bank mergers are still very undiscovered from many aspects. There are only a few papers analyzed Islamic & conventional bank mergers, and none of them uses a balanced-scorecard methodology from the other studies. Such a merger is unique from several perspectives. There is a very limited understanding about the unique characteristics of this merger, its challenges and opportunities. The main challenge is the cultural differences within the dual-banking system, which brings question marks about the success of the merged entity in the future. Academic research in this field would reduce the unexpected negative results for the future experiences significantly and help for future readiness. Therefore, this paper aims to fill such a critical gap by using a case study in the Qatar financial market.
Analysis of an Islamic & conventional bank merger with an accurate balanced scorecard method provides several contributions to the existing literature. First of all, this paper aims to enlighten the opportunities and challenges of the merger of two different types of banks, and therefore be a guideline for the future mergers. This purpose of the study is supported with a short and long-term strategic plan suggestions in the last sections. Therefore, more Islamic & conventional future mergers are encouraged with a better enlightened roadmap.
Secondly, financial performance analysis is also considered while building the scorecards and challenges related to risk management, banking products, and customer retention are also included. Therefore, the study aims to be an anchor for future studies that concerns about the financial performance of merged banks with same or different financial systems.
Furthermore, this lack of research creates a need for the optimal decision-making processes for such type of mergers, which may impact the success and continuity of the merger. A better understanding of the decision-making process, and the use of advance decision-making tools can help to improve the success of such mergers.
The balanced scorecard designed for this study includes four main categories: financial, customer satisfaction, internal business, and learning & growth. Each category has 3 KPIs which makes a total of 12. References about each KPI are given in Table 2 in the upcoming sections.

3. Data & Methodology

This paper utilizes the balanced scorecard technique for analyzing the Masraf al-Rayan and Al Khalij Commercial Bank merger. There are often four categories in a balanced scorecard: financial, customer satisfaction, internal business, and learning & growth. The below Table-2 is the scorecard designed for this analysis:
Table 1. Balanced Scorecard.
Table 1. Balanced Scorecard.
BSC Perspective Dimensions KPIs # Details
Financial Performance (D1) Continuity of Profit C1 Profit and its consistency, Earning quality, profitability ratios
Competitive Market Share C2 Market Share, Rivals, Competitiveness
Resilience with proactive financial strategies C3 Risk Management, Capital Adequacy, Strong Financial Discipline, Clear Strategy, and Productivity.
Customer Satisfaction Meeting Customer Expectations (D2) Improvements in Service Quality C4 Demand Customization, Meeting customer expectations, Smooth operations, Quality software & User face
Satisfying customer needs with Islamic banking services C5 Having Shariah-compliant products, Giving Trust to customers who have sensitivity to Islamic values.
Enhancing Customer Loyalty C6 Satisfaction, Loyalty, reducing complaints, higher positive feedback
Internal Business Organizational Structure (D3) Managerial & Organizational competencies C7 Institutionalization, Employee Competencies, Managerial Structure of the Merged Bank, Employee Age,
Technical requirements including technological and Organizational Infrastructure C8 Market Data, Infrastructure, Technological competency, Databases, etc.
Increase in Agility and Human Capital C9 Employee Age, Experience & Other Dynamics, Islamic finance knowledge of the employee,
Learning & Growth Future Readiness and Prospects of the Bank (D4) Information Enhancements of the Customers and Doing Business C10 Learning from Each Other, Skill Enhancement in an Islamic-Conventional Bank Merger, Skill transition, Market-based information, Innovativeness
Future Readiness and Adaptability C11 Competitive power, Being Ready for Future Market Place, Adaption Speed, and Flexibility.
New generation banking services for sustainable financial development C12 ESG approach, Integrated reporting, Sustainable Programs.
Source: Author’s own contribution.
In this section, the approaches in the proposed model are explained.

3.1. Quantum Spherical Fuzzy Sets with Golden Cut

Quantum theory (Q) focuses on different probabilities in the evaluation process. This new perspective aims to increase the effectiveness of decision-making processes (Kayacık et al., 2022). This theory considers phase angle ( θ 2 ) and amplitude items ( φ 2 ) (Sun et al., 2022). The details are denoted in Equations (1)-(3), where u represents events and ς shows collective events (Hou et al., 2022).
Q u > = φ e j θ
ς > = u 1 > , u 2 > , … , u n >
∑ u > ⊆ ς > Q ( u > ) = 1  
These approaches can be integrated with other techniques, such as fuzzy logic, to minimize uncertainty in decision-making techniques. Thus, it is aimed at solving problems more successfully. In this context, many different fuzzy numbers have been developed in the literature. Spherical fuzzy sets ( A ~ S ) were also generated for this purpose in which membership, non-membership, and hesitation (μ, ν, π) parameters are used (Kutlu Gündoğdu and Kahraman, 2019). Considering hesitancy issues is accepted as the main benefit of these sets (Ashraf et al., 2019). They are explained in Equations (4) and (5) (Kahraman, 2021).
A ~ S = u , ( μ A ~ S u , v A ~ S u , h A ~ S u ) u ∈ U
0 ≤ μ A ~ S 2 u + v A ~ S 2 u + h A ~ S 2 u ≤ 1 ,   ∀ u ∈ U
In this proposed model, these sets are improved by integrating Quantum theory to increase problem-solving success. The details are indicated in Equations (6)-(8) in which the amplitudes of degrees are given by ς μ , ς v , and ς h . Additionally, α , γ , and β refer to the set of θ .
ς A ~ S > = u , ( ς μ A ~ S u , ς v A ~ S u , ς h A ~ S u ) u ∈ 2 ς A ~ S >
ς = ς μ . e j 2 π . α , ς v . e j 2 π . γ , ς h . e j 2 π . β
φ 2 = ς μ u i >
There are different views on how to calculate degrees in spherical fuzzy sets. In this study, criteria related to golden ratio (G) are considered (Xu et al., 2022). The division of the extreme (b) and mean ratio (a) in a straight line is considered for this situation as in Equations (9) and (10) (Li et al., 2022).
G = a b
G = 1 + 5 2 = 1.618 …
The amplitude of degrees are shown in Equations (11) and (12).
ς v = ς μ G
ς h = 1 − ς μ − ς v
Moreover, phase angles are created by Equations (13)-(15).
α = ς μ u i >
γ = α G
β = 1 − α − γ
In addition, Equations (16)-(19) demonstrate the mathematical operations.
λ * A ~ ς = 1 − 1 − ς μ A ~ 2 λ 1 2 e j 2 π . 1 − 1 − α A ~ 2 π 2 λ 1 2 ,   ς v A ~ λ e j 2 π . γ A ~ 2 π λ ,   1 − ς h A ~ 2 λ − 1 − ς μ A ~ 2 − ς h A ~ 2 λ 1 2 e j 2 π . 1 − β A ~ 2 π 2 λ − 1 − α A ~ 2 π 2 − β A ~ 2 π 2 λ 1 2 ,   λ > 0
A ~ ς λ = ς μ A ~ λ e j 2 π . α A ~ 2 π λ , 1 − 1 − ς v A ~ 2 λ 1 2 e j 2 π . 1 − 1 − γ A ~ 2 π 2 λ 1 2   ,   1 − ς v A ~ 2 λ − 1 − ς v A ~ 2 − ς h A ~ 2 λ 1 2 e j 2 π . 1 − γ A ~ 2 π 2 λ − 1 − γ A ~ 2 π 2 − β A ~ 2 π 2 λ 1 2   ,   λ > 0
A ~ ς ⊕ B ~ ς = ς μ A ~ 2 + ς μ B ~ 2 − ς μ A ~ 2 ς μ B ~ 2 1 2 e j 2 π . α A ~ 2 π 2 + α B ~ 2 π 2 − α A ~ 2 π 2 α B ~ 2 π 2 1 2   ,   ς v A ~ ς v B ~ e j 2 π . γ A ~ 2 π γ B ~ 2 π ,   1 − ς μ B ~ 2 ς h A ~ 2 + 1 − ς μ A ~ 2 ς h B ~ 2 − ς h A ~ 2 ς h B ~ 2 1 2 e j 2 π . 1 − α B ~ 2 π 2 β A ~ 2 π 2 + 1 − α A ~ 2 π 2 β B ~ 2 π 2 − β A ~ 2 π 2 β B ~ 2 π 2 1 2
A ~ ς ⊗ B ~ ς = ς μ A ~ ς μ B ~ e j 2 π . α A ~ 2 π α B ~ 2 π , ς v A ~ 2 + ς v B ~ 2 − ς v A ~ 2 ς v B ~ 2 1 2 e j 2 π . γ A ~ 2 π 2 + γ B ~ 2 π 2 − γ A ~ 2 π 2 γ B ~ 2 π 2 1 2   ,   1 − ς v B ~ 2 ς h A ~ 2 + 1 − ς v A ~ 2 ς h B ~ 2 − ς h A ~ 2 ς h B ~ 2 1 2 e j 2 π . 1 − γ B ~ 2 π 2 β A ~ 2 π 2 + 1 − γ A ~ 2 π 2 β B ~ 2 π 2 − β A ~ 2 π 2 β B ~ 2 π 2 1 2  

3.2. The extension of DEMATEL

DEMATEL is used to identify those more important among different issues affecting a purpose. With this method, it is also possible to determine the causal relationship between these factors (Chang et al., 2011). DEMATEL is integrated with Spherical fuzzy numbers whose degrees are calculated with the golden ratio in this originally developed model. The steps of this generated method are shown below (Abdullah and Zulkifli, 2015).
Step 1: The evaluations are collected from the experts.
Step 2: Relation matrix is constructed by Equation (20).
ς k = 0 ς 12 ⋯ ⋯ ς 1 n ς 21 0 ⋯ ⋯ ς 2 n ⋮ ⋮ ⋱ ⋯ ⋯ ⋮ ⋮ ⋮ ⋱ ⋮ ς n 1 ς n 2 ⋯ ⋯ 0
Also, Equation (21) is also used to compute aggregated values.
ς = 1 − ∏ i = 1 k 1 − ς μ i 2 1 k 1 2 e 2 π . 1 − ∏ i = 1 k 1 − α i 2 π 2 1 k 1 2 , ∏ i = 1 k ς v i 1 k e 2 π . ∏ i = 1 k γ i 2 π 1 k ,   ∏ i = 1 k 1 − ς μ i 2 1 k − ∏ i = 1 k 1 − ς μ i 2 − ς h i 2 1 k 1 2 e 2 π . ∏ i = 1 k 1 − α i 2 π 2 1 k − ∏ i = 1 k 1 − α i 2 π 2 − β i 2 π 2 1 k 1 2
Step 3: Values are defuzzified by Equation (22)
D e f ς i = ς μ i + ς h i ς μ i ς μ i + ς v i + α i 2 π + γ i 2 π α i 2 π α i 2 π + β i 2 π
Step 4: Normalization procedure is applied with Equations (23) and (24).
B = ς m a x 1 ≤ i ≤ n ∑ j = 1 n ς i j
0 ≤ b i j ≤ 1
Step 5: Total relation matrix is created by Equation (25).
lim k → ∞ ⁡ B + B 2 + … + B k = B ( I − B ) − 1
Step 6: The sums of rows and columns (D, E) are computed to identify causal degrees as in Equations (26) and (27).
D = ∑ j = 1 n e i j n x 1  
E = ∑ i = 1 n e i j 1 x n
The sum/difference of these values are considered to define the weights/causal degrees of the factors. For the purpose of defining causality relationship, the differences of these values are compared with the threshold value ( α ) by Equation (28).
α = ∑ i = 1 n ∑ j = 1 n e i j N

4. Results

This study it is aimed to determine the most influential factors in the merger process of banks. In this context, 12 different indicators are determined as a result of a comprehensive literature review. In this process, the indicators of the balanced scorecard technique are considered. The main advantage of using this approach is that financial and non-financial determinants can be considered. Within this scope, the selected 12 indicators are derived from four different balanced scorecard perspectives: finance, customer satisfaction, internal business, and learning and growth. The details of the significant criteria are indicated in Table 2.
Table 2. References for KPIs in the scorecard.
Table 2. References for KPIs in the scorecard.
BSC Perspective KPIs References
Financial Continuity of Profit Bikker & Bos, 2008; Demirgüç-Kunt & Huizinga, 2000; Linder & Crane, 1993; Staikouras & Wood, 2004; Vong & Chan, 2009 Gur et al., 2023
Competitive Market Share Behn & Riley Jr, 1999; Belkhaoui et al., 2014; Berger & Bouwman, 2013; Cleverley, 1990; Rau, 2000
Resilience with proactive financial strategies Bakir, 2013; Corbet et al., 2022; Indupurnahayu et al., 2022; Khan et al., 2020; Maddaus, 2020; Markman & Venzin, 2014, Aysan et al., 2021, Manisaligil et al., 2023, Smola et al., 2023
Customer Satisfaction Improvements in Service Quality Afthanorhan et al., 2019; Coelho & Henseler, 2012; Hernon et al., 1999; Lenka et al., 2009; Oh & Kim, 2017; Succi et al., 2001; Sureshchandar et al., 2002
Satisfying customer needs with Islamic banking services Ahmed et al., 2021; Ali et al., 2009; Farah, 2017; Lee & Ullah, 2011; Metawa & Almossawi, 1998; Naser et al., 1999, Aysan et al., 2019
Enhancing Customer Loyalty Amin et al., 2011; Bilal et al., 2010; Coelho & Henseler, 2012; Ehigie, 2006; Fry et al., 1973; Lenka et al., 2009
Internal Business Managerial & Organizational competencies Alkhazali et al., 2020; Chen & Vashishtha, 2017; Cetin et al, 2012; Kamukana et al, 2017; Aysan et al., 2009, Mufti et al., 2016; Salman et al., 2020
Technical requirements including technological and Organizational Infrastructure Haleem & Kevin, 2018; Hickson et al., 1969; Khazanchi & Arora, 2016; Linder & Crane, 1993; Ringim et al., 1993
Increase in Agility and Human Capital Alkhazali et al., 2020; Brueller et al., 2018; Hassan & Lukman, 2020; Kjan et al., 2020; Larsson & Finkelstein, 1999
Learning & Growth Information Enhancements of the Customers and Doing Business Chen & Vashishtha, 2017; DeLong & DeYoung, 2007; Houston et al., 2001; Panetta et al., 2009; Piloff & Santomero, 1998; Zollo & Singh, 2004
Future Readiness and Adaptability Bajaj, 2009; Davis, 2000; Marshall, 1960; Smith & Walter, 1998
New generation banking services for sustainable financial development Ahmed et al., 2015; Fauzi et al., 2010; Houston & Shan, 2022; Neffati et al., 2011; Olson & Pagano, 2005; Smith, 2010
Source: Author’s own.
Banks may merge primarily to increase their profitability. The new bank, which has been formed due to the merger of the two banks, is likely to be successful in its activities in different fields. On the other hand, with the merger's help, the new bank's market share will be more significant. This will contribute to an increase in the competitive power of the bank. Banks that want to improve their financial strategies can also choose to merge. In the case of merging with a bank that is successful in different segments, it will be possible to develop more effective financial strategies. Increasing customer satisfaction is one of the critical reasons for bank mergers. As a result of the merger of two different banks in the sector, there is a higher chance of increasing service quality. For example, the number of branches and ATMs of the new bank will increase, which will help provide more comprehensive service to customers. In addition, due to the bank merger, it is possible to provide services to customers in different segments. For example, when a conventional bank is combined with an Islamic bank, it can also serve interest-sensitive customers. This situation contributes to both increase service quality and ensuring customer loyalty.
Bank mergers also help increase organizational effectiveness. Merging with another bank also means benefiting from the qualified workforce of that bank. In this context, merging with the bank, which has both successful managers and a solid corporate culture, provides many benefits. This is also very important for technological development. In case of a merger with a bank with a strong technological infrastructure, it will be possible for the new bank to have robust technology. Bank mergers can also provide some benefits in terms of agility so that it can be possible to increase the efficiency of the bank. Bank mergers also include some benefits in terms of research and development performance. In the case of merging with a bank that carries out active research activities, it will be possible to use the information more effectively. Additionally, the more substantial bank resulting from the merger is likely to adapt more successfully to technological developments. Thus, the bank will be able to develop effective new services, which will enable the bank to be more competitive.
One hundred thirty-two different questions are created from these criteria. These questions are asked of five different experts. They have the necessary sufficiency to evaluate these items. Important information about the experts is indicated in Table 3.
These people make evaluations by using five different scales. The details of these scales, the degrees, and the fuzzy sets are denoted in Table 4. Additionally, the details of the evaluations are indicated in Table A1 in the appendix of the manuscript.
In the following stage, the average values of the evaluations are computed by considering Equations (20) and (21). The details of these values are demonstrated in Table 5.
In the following section, score values are computed. These values are shown in Table 6.
After that, the values are normalized by applying the operations stated in Equations (23) and (24). Table 7 indicates the details of these values.
Total relation matrix is created by Equation (25) in the next stage. Table 8 gives information about the total relation matrix.
The sums of rows and columns (D, E) are calculated to create causal direction. For this purpose, Equations (26) and (27) are taken into consideration. Additionally, threshold value is also considered in this process as in Equation (28). Causality relationship between the indicators is indicated in Table 9.
Table 9 demonstrates that resilience with proactive financial strategies is the most influencing factor because it affects all other 11 criteria. This situation gives information that it is a very critical factor in the merger process of the banks. On the other hand, increase in agility and human capital is the most influenced indicator since it is affected by all other factors. This situation also plays a crucial role in the effectiveness of the merger process of the banks. Additionally, the weights of the criteria are stated in Table 10.
Table 9 identifies that resilience with proactive financial strategies plays the most critical role in the merger process of the banks because it has the highest weight (.0845). Increases in agility, human capital, and competitive market share also have high weights (.0839 and .0836). Nevertheless, enhancing customer loyalty, increasing profitability and information enhancements of the customers, and doing business have lower importance than the others in this process. Table 11 below sorts KPIs according to their impact factor.

5. Discussion

Resilience with proactive financial strategies is the most essential criterion for bank mergers. Bank merger is already a very complex and challenging process in most regulation systems. Taking proactive financial strategies with strong managerial instincts would help improve the resilience of the merged bank in both the short and long terms (Bakir, 2013). A robust and well-thought-out initial financial strategy merged bank can eliminate most potential risks and structural disruptions.
Moreover, a clear financial strategy will ensure the operations' stability and continuity in most scenarios. Moreover, stakeholders such as customers, investors, and regulators take an extremely close look at the financial resilience of the merged bank for the initial stages to make their decisions about plans. Having robust and precise financial strategies will ensure investor and customer retention while the spotlights are on the merged bank.
Furthermore, having a robust financial strategy means considering potential challenges when integrating two banks (Indupurnahayu et al., 2022). For example, the existing debt of the two institutions, the alignment of Islamic and conventional business systems, and the different risk management approaches of the two systems are potential challenges for such a merger. A robust financial strategy would and should include the worst- and best-case scenarios for all these potential challenges.
In addition, having proactive financial strategies would also predict possible opportunities and design the best path for making the most out of them (Khan et al., 2020). In the case of this merger, increased market share, increased economies of scale, and access to new customer segments are critical opportunities for the merged bank. Strategizing these opportunities well is critical for the future resilience of the bank. For this, the financial plan must include the allocation of resources, optimization of the operations, and achieving the desired synergies between the two financial systems (Markman & Venzin, 2014).
Therefore, the resilience that comes from a proactive financial strategy is the most essential KPI for bank mergers. It helps mitigate potential risks and enhance the chances of achieving the planned outcomes in any scenario.
Secondly, satisfying customer needs with Islamic banking services takes place with an impact on eight other KPIs. In the case of Islamic finance customers, satisfying their needs is crucial for the continuity of the merged bank (Ahmed et al., 2021). Customer loyalty and retention are critical in a merger integration process, as a loss in customer loyalty would result in a necessary amount of profit reductions (Farah, 2017). Although such a loss would be eliminated in the short term, it certainly will be vital for the bank's long-term success. As Islamic banking services differentiate from conventional, customers who prefer Islamic banking products have different needs and expectations compared to their conventional counterparts. Therefore, for a successful merger, the merged entity must clearly understand the needs of both customer groups. Such a strategy would carefully keep the financial products within their Shariah-compatible lines for Islamic bank customers and stay competitive in their rates for conventional bank customers.
Satisfying the needs of both customer groups will ensure the merged bank has a reputation in the market, maintain customer loyalty and retention, and increase the chance of having a competitive advantage over other banks in the market (Ahmed et al., 2021).
Increase in Agility and Human Capital takes the third place by impacting over seven other KPIs in the results. Certainly, agility and human capital are the primary tools for a merged bank to effectively navigate the challenges and opportunities explained in previous paragraphs. In a bank merger, an increase in agility can empower the merged bank to better respond to the changes in the finance business and the storms in today's financial volatility (Alkhazali et al., 2020). Moreover, high agility will ensure the responsive attitude of the bank in a change of regulations or competition level in the industry. Such an attitude will increase the competitiveness of the merged entity in the banking market (Chen & Vashishtha, 2017).
In the same way, solid and skilled human capital plays a critical role in the smooth integration of the two banks. A substantial investment in human capital will ensure the inclusion of the required skills in the employees (Hassan & Lukman, 2020). In the investigated bank merger case, an employee of the merged bank should have enough knowledge and experience in Islamic finance and Shariah rulings to keep the business and products within the permissible borders. In the case of Islamic banks, the workforce should be trained in the principles of Islamic finance, such as the details and limitations of interest-based transactions and the promotion of risk-sharing. Ensuring the merged entity employee knowledge will help other strategies, such as having a proactive financial strategy or customer loyalty and retention. Moreover, a skilled workforce will effectively manage risks, provide high-quality customer service, and ensure the high financial performance of the bank (Kjan et al., 2020). Therefore, an increase in agility and human capital appears to be one of the most important KPIs for a bank merger.
On the flip side, some other KPIs appear to have less priority for a bank merger. Starting the continuity of profit, which impacts only two other KPIs, has the most negligible effect on the bank merger. Continuity of profit is unquestionably vital for the existence of the merged bank. However, analysis results show that the two KPIs it impacts are resilience with proactive financial strategies and an Increase in Agility and Human Capital, which are the most critical KPIs in the overall results. This concludes that if a proactive financial plan and strong workforce are ensured, a continuous profit stream will inevitably result in success (Bikker & Bos, 2008). In any case, focusing on the quality of the work output instead of the profit itself matters for the success of almost any kind of entity. Therefore, continuity to profit is not less important than others, but it is expected to be the result of the most critical KPIs in the merged bank.
In the same way, future readiness and adaptability have a shallow impact factor with very similar reasoning. A clear strategic plan should naturally include the agility for the changes in the future marketplace (Bajaj, 2009). All mentioned KPIs with strong impact require a future-ready entity to stay competitive in the marketplace and to ensure customer retention.
Lastly, four KPIs' competitive market share, new generation banking services for sustainable financial development, technical requirements including technological and organizational infrastructure, and improvements in service quality appears to have a mid-level impact on a bank merger. These KPIs should be included in the mid-and long-term plans of the merged entity for the business success, depending on the current level of the bank in each of them.
Considering the positioning of each criterion, the merged entity should have short-term and long-term plans to improve them. For the short term, it would be appropriate the focus on essential criteria for the business's success.
Starting from resilience with proactive financial strategies, the bank should develop and implement a comprehensive financial plan. Such a financial plan must include risk management strategies. The bank should review and improve the risk management processes and systems because Islamic and conventional banks have very different risk management approaches. The merged bank should align the risk management per the Islamic Law requirements. Furthermore, the bank may explore new ways of revenue streams such as investment banking or wealth management services. Increased human capital and economies of scale would be an excellent opportunity for expanding the business into these areas. In order to stay resilient, the bank must also monitor the financial environment closely. The bank must proactively adjust its businesses and strategies in response to the financial world's trends, volatility, and risks.
Moreover, the merged entity must focus on providing high-quality Islamic banking services to meet their needs and expectations. The bank must offer investment and financing products that are Shariah compliant while improving customer awareness about Islamic finance. Keeping the products high quality and compatible is also crucial for customer retention in the near future.
The bank must invest in its agility and human capital to achieve all these. The employee must be trained carefully about the new business style, and the organizational structure must be improved to stay flexible and responsive. Moreover, investing in technology will keep the bank competitive and ready for the future.
In longer terms, the bank is suggested to focus on profit continuity. Diversifying the revenue streams will help in this matter critically. Expansion into new markets and optimizing the cost structure are two critical factors for the profit structure of the bank. Moreover, the bank must be ready for future changes in the financial world. Long term plan of the merged bank must include the adoption strategies for fintech and digitalization tools. Investing in technology and digital solutions is critical for having the required infrastructure when needed. To ensure a competitive advantage, the bank must stay ahead of the regulatory changes and include those related to Islamic finance to ensure compliance and maintain its position in the market. Continuous development of new products and services to meet the evolving needs of modern customers should be at the center point of this strategy. Lastly, the bank must prioritize improving the information and knowledge available to the customers and improving the ease of doing business. Educating customers about Islamic financial products will increase awareness and increase the number of customers with a reason to work with Islamic banks only. Moreover, today's customers are very precise about what they want (Aysan et al., 2022). Strong and smooth software, light-speed-fast transactions, and digital solutions will ensure customer satisfaction and loyalty.
Overall, the criteria derived from the results of this study are beneficial in building short- and long-term plans for the merged bank. The impact factor of the criteria locates each of them in the short- or long-term lists. More important criteria are critical in the short term to ensure the business is compatible and in the game. Other criteria are located in the long-term plans for the perfection and enhancement of the business in the marketplace.

6. Conclusion

The findings of this study are substantial because they provide a multi-dimensional and comprehensive analysis of the merger of an Islamic and a conventional bank in the Qatari financial system. The study offers a unique and critical perspective on the opportunities and challenges of bank mergers in different markets by utilizing a balanced scorecard approach and incorporating a quantum spherical fuzzy decision-making methodology.
One of the study's key results is the importance of considering different dimensions in a bank merger process, such as financial planning, customer satisfaction and retention, operational efficiency, and human capital. Investigating the relevance of each criterion in terms of the impact on the merger process will ease the evaluation and prioritization of the strategic plans for the M&A processes in the future (Alkhazali et al., 2020). From this perspective, this study has a function of guidelines for future bank mergers, including their short- and long-term business plans.
Another critical insight is the potential of M&A strategies for expanding the Islamic finance sector. Results of the study show that mergers increase the market competitiveness and overall size of Islamic banks, giving them a more substantial hand in the future market. As a successful example of Islamic and conventional bank mergers, Masraf Al-Rayan & Al-Khalij Commercial union can set the standards for future mergers. Moreover, several policy recommendations for all stakeholders can be derived from the lessons taken from the merger and this study.
Policy recommendations for regulators would include several vital points. To start with the most important one, regulators must promote financial stability and encourage the merged bank to implement its strategies in this path. Risk management frameworks and contingency planning should be regulated for the safest levels of financial system stability.
Moreover, encouraging transparency in the merger process, including disclosing relevant documents and information related to the financial and operational aspects, will be vital to prepare guidelines for future mergers (Chen & Vashishtha, 2017). With this encouragement, more data from the merger experience could be derived so that future mergers would include fewer potential risks.
Furthermore, since less competition in the banking sector is often perceived negatively in the current regulatory environment, regulators must promote competition and not let banks merge and excessively control a financial system, such as the examples during the 2008 sub-prime crisis in the U.S. market.
On the other side, investors must research the merger process well to decide whether to continue their investment or withdraw. The strategic rationale of the merger, the financial health of the merged bank, and the current market environment are some of the main factors that would directly affect the stock prices of the merged bank. Lastly, investors would be safer diversifying their portfolio more during the merger process and the short term after it to minimize quick losses. With the close follow-up and research, investors would safely ensure their investment in the merged bank are well-informed, diversified, and managed effectively.
Lastly, top executives of the merged bank should be well aware of the implementation details of all financial and strategic merger plans, as minor mistakes during this process would bring devastating results later. They also must push the human capital transformation to be quick and successful enough to ensure a smooth shifting of the business.
In conclusion, this study provides insightful details for practitioners, regulators, executives, and investors in the Islamic finance industry. Moreover, the paper highlights the usefulness of the balanced scorecard approach for analyzing critical processes such as M&As. The study's results demonstrate the potential benefits of utilizing quantum spherical fuzzy decision-making methodology for strategizing short-term and long-term plans for a challenging merger process and the merged entity. Ultimately, the insights and recommendations from the paper support the growth and development of the Islamic finance sector and encourage future M&As with safer guidelines for the best outcome for all stakeholders.

Appendices

Table A1. Evaluations.
Table A1. Evaluations.
STXP1
PBL MKS RFS ISQ SBS CTY MGP TNF IAH FDB RDP NWD
PBL FAIR STRONG PERFECT STRONG FAIR STRONG STRONG STRONG STRONG STRONG STRONG
MKS STRONG STRONG STRONG STRONG FAIR STRONG STRONG STRONG STRONG STRONG STRONG
RFS STRONG STRONG STRONG STRONG STRONG PERFECT STRONG STRONG STRONG PERFECT PERFECT
ISQ STRONG STRONG STRONG PERFECT PERFECT FAIR STRONG STRONG STRONG STRONG STRONG
SBS STRONG STRONG STRONG STRONG PERFECT STRONG STRONG STRONG STRONG STRONG PERFECT
CTY STRONG STRONG STRONG STRONG FAIR FAIR STRONG STRONG STRONG STRONG STRONG
MGP PERFECT STRONG PERFECT PERFECT STRONG STRONG STRONG PERFECT PERFECT PERFECT PERFECT
TNF PERFECT STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG PERFECT PERFECT
IAH STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG
FDB STRONG STRONG STRONG STRONG FAIR STRONG STRONG FAIR STRONG STRONG STRONG
RDP STRONG PERFECT STRONG STRONG STRONG PERFECT STRONG STRONG STRONG STRONG STRONG
NWD STRONG FAIR STRONG FAIR FAIR STRONG STRONG FAIR STRONG STRONG STRONG
STXP 2
PBL MKS RFS ISQ SBS CTY MGP TNF IAH FDB RDP NWD
PBL STRONG STRONG FAIR STRONG FAIR FAIR FAIR LOW FAIR FAIR FAIR
MKS STRONG FAIR FAIR FAIR FAIR FAIR FAIR FAIR LOW LOW LOW
RFS STRONG STRONG STRONG LOW STRONG FAIR FAIR PERFECT STRONG PERFECT STRONG
ISQ STRONG STRONG LOW STRONG PERFECT FAIR FAIR FAIR FAIR STRONG FAIR
SBS FAIR STRONG LOW FAIR FAIR FAIR FAIR FAIR LOW FAIR STRONG
CTY STRONG STRONG FAIR STRONG STRONG FAIR FAIR STRONG STRONG STRONG STRONG
MGP PERFECT PERFECT PERFECT PERFECT FAIR PERFECT STRONG PERFECT PERFECT PERFECT PERFECT
TNF STRONG STRONG STRONG STRONG FAIR STRONG FAIR STRONG STRONG PERFECT PERFECT
IAH STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG FAIR STRONG STRONG
FDB STRONG STRONG FAIR STRONG FAIR STRONG LOW FAIR FAIR STRONG STRONG
RDP STRONG STRONG STRONG FAIR FAIR STRONG FAIR STRONG STRONG STRONG STRONG
NWD STRONG FAIR LOW LOW LOW FAIR LOW LOW LOW FAIR FAIR
STXP 3
PBL MKS RFS ISQ SBS CTY MGP TNF IAH FDB RDP NWD
PBL STRONG STRONG PERFECT STRONG FAIR PERFECT PERFECT STRONG STRONG STRONG STRONG
MKS STRONG STRONG PERFECT STRONG FAIR PERFECT PERFECT STRONG STRONG STRONG STRONG
RFS STRONG STRONG STRONG STRONG STRONG PERFECT STRONG STRONG STRONG PERFECT PERFECT
ISQ STRONG STRONG STRONG PERFECT PERFECT FAIR PERFECT STRONG STRONG STRONG PERFECT
SBS STRONG STRONG STRONG STRONG PERFECT STRONG STRONG STRONG STRONG STRONG PERFECT
CTY STRONG STRONG STRONG PERFECT STRONG FAIR STRONG STRONG STRONG STRONG STRONG
MGP STRONG STRONG PERFECT PERFECT STRONG STRONG STRONG PERFECT STRONG STRONG STRONG
TNF PERFECT STRONG STRONG PERFECT STRONG STRONG STRONG STRONG STRONG STRONG PERFECT
IAH PERFECT PERFECT PERFECT PERFECT PERFECT PERFECT PERFECT PERFECT PERFECT PERFECT PERFECT
FDB STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG
RDP STRONG PERFECT STRONG STRONG STRONG PERFECT PERFECT PERFECT STRONG STRONG STRONG
NWD STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG STRONG
STXP 4
PBL MKS RFS ISQ SBS CTY MGP TNF IAH FDB RDP NWD
PBL NO STRONG PERFECT STRONG FAIR STRONG STRONG FAIR STRONG NO STRONG
MKS STRONG LOW PERFECT FAIR PERFECT LOW NO LOW PERFECT PERFECT LOW
RFS STRONG NO NO NO NO FAIR LOW NO FAIR LOW LOW
ISQ PERFECT PERFECT NO FAIR PERFECT FAIR LOW NO PERFECT PERFECT FAIR
SBS STRONG STRONG NO PERFECT PERFECT FAIR NO NO FAIR N LOW
CTY PERFECT STRONG NO PERFECT PERFECT LOW LOW NO PERFECT PERFECT LOW
MGP STRONG NO PERFECT PERFECT PERFECT STRONG PERFECT PERFECT PERFECT PERFECT FAIR
TNF LOW FAIR NO PERFECT STRONG STRONG LOW NO STRONG PERFECT STRONG
IAH LOW NO FAIR STRONG FAIR FAIR PERFECT STRONG NO STRONG LOW
FDB LOW STRONG NO PERFECT STRONG PERFECT NO NO LOW PERFECT STRONG
RDP PERFECT LOW LOW PERFECT FAIR PERFECT PERFECT PERFECT STRONG STRONG STRONG
NWD PERFECT LOW NO LOW STRONG FAIR NO FAIR NO LOW STRONG
STXP 5
PBL MKS RFS ISQ SBS CTY MGP TNF IAH FDB RDP NWD
PBL STRONG LOW STRONG FAIR STRONG PERFECT PERFECT STRONG LOW PERFECT LOW
MKS STRONG LOW STRONG STRONG STRONG LOW NO LOW STRONG STRONG NO
RFS STRONG NO NO NO NO LOW LOW NO FAIR LOW LOW
ISQ STRONG STRONG NO FAIR PERFECT LOW STRONG LOW PERFECT STRONG LOW
SBS STRONG STRONG NO PERFECT STRONG LOW LOW NO FAIR NO LOW
CTY STRONG PERFECT NO STRONG STRONG LOW LOW NO PERFECT STRONG LOW
MGP STRONG LOW STRONG FAIR STRONG FAIR STRONG PERFECT FAIR PERFECT FAIR
TNF LOW FAIR NO STRONG LOW STRONG LOW NO STRONG PERFECT STRONG
IAH LOW NO LOW STRONG LOW STRONG PERFECT STRONG LOW STRONG FAIR
FDB LOW STRONG NO STRONG FAIR PERFECT NO LOW LOW PERFECT STRONG
RDP STRONG FAIR LOW STRONG LOW STRONG STRONG PERFECT STRONG STRONG PERFECT
NWD LOW NO NO LOW STRONG LOW LOW STRONG NO LOW STRONG

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Table 3. Details of Experts (STXPs).
Table 3. Details of Experts (STXPs).
Number Work Area Educational Background Work Experience (years)
1 Group Head of Audit BC + ACAMC 33
2 Associate Director of Financial Advisory MBA / CFA 13
3 CEO MBA 25
4 Associate Director MS 17
5 Asset Management Bachelor’s 13
Table 4. Scales, degrees and fuzzy numbers.
Table 4. Scales, degrees and fuzzy numbers.
Scheme . Degrees Numerical Scales QSFNs
NO .40 1 . 16 e j 2 π . . 4 , . 10 e j 2 π . . 25 , . 74 e j 2 π . . 35
LOW .45 2 . 20 e j 2 π . . 45 , . 13 e j 2 π . . 28 , . 67 e j 2 π . . 27
FAIR .50 3 . 25 e j 2 π . . 50 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 19
STRONG .55 4 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11
PERFECT .60 5 . 36 e j 2 π . . 6 , . 22 e j 2 π . . 37 , . 42 e j 2 π . . 03
Table 5. Average values.
Table 5. Average values.
PBL MKS RFS ISQ SBS CTY
PBL . 27 e j 2 π . . 51 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 22 . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15 . 33 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 49 e j 2 π . . 11 . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23
MKS . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15
RFS . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23
ISQ . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 31 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 13 . 36 e j 2 π . . 60 , . 22 e j 2 π . . 37 , . 42 e j 2 π . . 03
SBS . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 33 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 49 e j 2 π . . 11
CTY . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 33 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 49 e j 2 π . . 11 . 31 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 13
MGP . 33 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 49 e j 2 π . . 11 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 35 e j 2 π . . 59 , . 21 e j 2 π . . 36 , . 44 e j 2 π . . 05 . 34 e j 2 π . . 58 , . 21 e j 2 π . . 36 , . 46 e j 2 π . . 09 . 31 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 13 . 31 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 13
TNF . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 33 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 49 e j 2 π . . 11 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11
IAH . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 27 e j 2 π . . 51 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 22 . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15 . 31 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 13
FDB . 27 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 57 e j 2 π . . 18 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 27 e j 2 π . . 51 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 22 . 33 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 49 e j 2 π . . 11
RDP . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 27 e j 2 π . . 51 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 22 . 31 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 13 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 34 e j 2 π . . 58 , . 21 e j 2 π . . 36 , . 46 e j 2 π . . 09
NWD . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23
MGP TNF IAH FDB RDP NWD
PBL . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19
MKS . 27 e j 2 π . . 51 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 22 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22
RFS . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 27 e j 2 π . . 51 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 22 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19 . 31 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 13 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11
ISQ . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15 . 25 e j 2 π . . 50 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 19 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 28 e j 2 π . . 52 , . 16 e j 2 π . . 32 , . 58 e j 2 π . . 19
SBS . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 25 e j 2 π . . 50 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 19 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11
CTY . 23 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 63 e j 2 π . . 23 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 33 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 49 e j 2 π . . 11 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 27 e j 2 π . . 51 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 22
MGP . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 36 e j 2 π . . 60 , . 22 e j 2 π . . 37 , . 42 e j 2 π . . 03 . 33 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 49 e j 2 π . . 11 . 35 e j 2 π . . 59 , . 21 e j 2 π . . 36 , . 44 e j 2 π . . 05 . 31 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 13
TNF . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 35 e j 2 π . . 59 , . 21 e j 2 π . . 36 , . 44 e j 2 π . . 05 . 34 e j 2 π . . 58 , . 21 e j 2 π . . 36 , . 46 e j 2 π . . 09
IAH . 34 e j 2 π . . 58 , . 21 e j 2 π . . 36 , . 46 e j 2 π . . 09 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 27 e j 2 π . . 51 , . 15 e j 2 π . . 31 , . 60 e j 2 π . . 22 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15
FDB . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 33 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 49 e j 2 π . . 11 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11
RDP . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 30 e j 2 π . . 55 , . 19 e j 2 π . . 34 , . 51 e j 2 π . . 11 . 32 e j 2 π . . 57 , . 20 e j 2 π . . 35 , . 48 e j 2 π . . 09
NWD . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 24 e j 2 π . . 48 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 22 . 26 e j 2 π . . 50 , . 14 e j 2 π . . 30 , . 62 e j 2 π . . 23 . 29 e j 2 π . . 54 , . 18 e j 2 π . . 33 , . 54 e j 2 π . . 15
Table 6. Score values.
Table 6. Score values.
PBL MKS RFS ISQ SBS CTY MGP TNF IAH FDB RDP NWD
PBL .000 1.276 1.256 1.261 1.241 1.241 1.257 1.257 1.256 1.151 1.291 1.256
MKS 1.236 .000 1.260 1.257 1.244 1.257 1.278 1.310 1.260 1.267 1.267 1.278
RFS 1.236 1.298 .000 1.298 1.290 1.298 1.282 1.260 1.316 1.244 1.304 1.293
ISQ 1.242 1.242 1.290 .000 1.264 1.236 1.241 1.269 1.276 1.257 1.242 1.269
SBS 1.241 1.236 1.290 1.257 .000 1.261 1.253 1.276 1.289 1.253 1.289 1.293
CTY 1.242 1.242 1.289 1.246 1.250 .000 1.243 1.260 1.298 1.246 1.242 1.265
MGP 1.246 1.299 1.245 1.263 1.250 1.250 .000 1.242 1.236 1.261 1.245 1.264
TNF 1.293 1.244 1.298 1.246 1.256 1.236 1.260 .000 1.298 1.236 1.245 1.247
IAH 1.280 1.316 1.269 1.242 1.269 1.250 1.247 1.242 .000 1.295 1.242 1.269
FDB 1.265 1.236 1.289 1.242 1.244 1.246 1.290 1.266 1.260 .000 1.246 1.236
RDP 1.242 1.280 1.265 1.250 1.253 1.247 1.257 1.247 1.236 1.236 .000 1.242
NWD 1.267 1.266 1.290 1.255 1.256 1.253 1.278 1.253 1.290 1.260 1.241 .000
Table 7. Normalized values.
Table 7. Normalized values.
PBL MKS RFS ISQ SBS CTY MGP TNF IAH FDB RDP NWD
PBL .000 .090 .089 .089 .088 .088 .089 .089 .089 .082 .091 .089
MKS .088 .000 .089 .089 .088 .089 .091 .093 .089 .090 .090 .091
RFS .088 .092 .000 .092 .091 .092 .091 .089 .093 .088 .092 .092
ISQ .088 .088 .091 .000 .090 .088 .088 .090 .090 .089 .088 .090
SBS .088 .088 .091 .089 .000 .089 .089 .090 .091 .089 .091 .092
CTY .088 .088 .091 .088 .089 .000 .088 .089 .092 .088 .088 .090
MGP .088 .092 .088 .089 .089 .089 .000 .088 .088 .089 .088 .090
TNF .092 .088 .092 .088 .089 .088 .089 .000 .092 .088 .088 .088
IAH .091 .093 .090 .088 .090 .089 .088 .088 .000 .092 .088 .090
FDB .090 .088 .091 .088 .088 .088 .091 .090 .089 .000 .088 .088
RDP .088 .091 .090 .089 .089 .088 .089 .088 .088 .088 .000 .088
NWD .090 .090 .091 .089 .089 .089 .091 .089 .091 .089 .088 .000
Table 8. Total relation matrix.
Table 8. Total relation matrix.
PBL MKS RFS ISQ SBS CTY MGP TNF IAH FDB RDP NWD
PBL 4.537 4.664 4.693 4.627 4.625 4.613 4.647 4.646 4.686 4.587 4.640 4.655
MKS 4.670 4.634 4.747 4.680 4.678 4.667 4.701 4.702 4.739 4.646 4.691 4.709
RFS 4.731 4.780 4.727 4.744 4.742 4.731 4.763 4.761 4.805 4.706 4.755 4.772
ISQ 4.644 4.689 4.722 4.572 4.653 4.640 4.673 4.674 4.714 4.620 4.664 4.683
SBS 4.678 4.722 4.756 4.687 4.604 4.674 4.707 4.708 4.748 4.652 4.700 4.718
CTY 4.643 4.688 4.721 4.652 4.651 4.558 4.672 4.672 4.714 4.618 4.663 4.681
MGP 4.637 4.684 4.712 4.646 4.645 4.633 4.584 4.664 4.704 4.612 4.656 4.674
TNF 4.656 4.698 4.732 4.662 4.662 4.649 4.683 4.600 4.724 4.627 4.673 4.690
IAH 4.675 4.722 4.750 4.682 4.682 4.669 4.702 4.701 4.660 4.650 4.693 4.712
FDB 4.643 4.686 4.720 4.650 4.650 4.638 4.673 4.671 4.711 4.535 4.662 4.678
RDP 4.623 4.669 4.699 4.631 4.631 4.618 4.652 4.651 4.689 4.597 4.561 4.659
NWD 4.671 4.715 4.747 4.678 4.678 4.665 4.700 4.698 4.740 4.644 4.688 4.625
Table 9. Causal Directions.
Table 9. Causal Directions.
Impact directions
PBL → (RFS, IAH)
MKS → (RFS, MGP, TNF, IAH, RDP, NWD)
RFS → (PBL, MKS, ISQ, SBS, CTY, MGP, TNF, IAH, FDB, RDP, NWD)
ISQ → (MKS, RFS, IAH, NWD)
SBS → (MKS, RFS, ISQ, MGP, TNF, IAH, RDP, NWD)
CTY → (MKS, RFS, IAH)
MGP → (MKS, RFS, IAH)
TNF → (MKS, RFS, MGP, IAH, NWD)
IAH → (MKS, RFS, SBS, MGP, TNF, RDP, NWD)
FDB → (MKS, RFS, IAH)
RDP → (MKS, IAH)
NWD → (MKS, RFS, MGP, TNF, IAH, RDP)
Table 10. Weights of the determinants.
Table 10. Weights of the determinants.
D E D+E D-E Weighting results Weighting priorities
PBL 55.622 55.809 111.431 -.186 .0828 11
MKS 56.264 56.350 112.614 -.086 .0836 3
RFS 57.018 56.728 113.746 .290 .0845 1
ISQ 55.947 55.912 111.859 .035 .0831 8
SBS 56.354 55.902 112.256 .452 .0834 5
CTY 55.934 55.754 111.689 .180 .0830 10
MGP 55.851 56.158 112.009 -.307 .0832 7
TNF 56.058 56.149 112.207 -.091 .0833 6
IAH 56.299 56.635 112.934 -.336 .0839 2
FDB 55.918 55.495 111.413 .423 .0827 12
RDP 55.679 56.045 111.724 -.366 .0830 9
NWD 56.249 56.257 112.506 -.008 .0836 4
Table 11. KPIs Impact Factor Ranking.
Table 11. KPIs Impact Factor Ranking.
KPI CODE Impact Factor
Resilience with proactive financial strategies RFS 11
Satisfying customer needs with Islamic banking services SBS 8
Increase in Agility and Human Capital IAH 7
Competitive market Share MKS 6
New generation banking services for sustainable financial development NWD 6
Technical requirements including technogical and Organizational Infrastructure TNF 5
Improvements in Service Quality ISQ 4
Enhancing Customer Loyalty CTY 3
Managerial & Organizational competencies MGP 3
Information Enhancements of the Customers and Doing Business FDB 3
Future Readiness and Adoptability RDP 2
Continuity of Profit PBL 2
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