Objective - The primary objective of the paper is to examine the impact of the CARTER model dimensions (Compliance, Assurance, Reliability, Tangibility, Empathy, and Responsiveness) on university students' satisfaction with Islamic banks. The study aims to identify the dimensions that are most influential in enhancing service quality within this specific demographic.

Methodology/Technique - The research employs a quantitative approach, utilizing primary data collected through a survey of 150 respondents aged 18 to 27 from Universiti Sains Islam Malaysia. The study employs various statistical analyses using SPSS, including descriptive analysis, factor analysis, reliability analysis, and multiple regression analysis, to assess the relationships between CARTER dimensions and customer satisfaction.

Findings - The findings reveal that empathy and assurance are the most significant factors influencing customer satisfaction among university students in relation to Islamic banks. Conversely, compliance, reliability, tangibility, and responsiveness were found to have an insignificant relationship with customer satisfaction. The study suggests that Islamic banks should prioritize effective communication and personalized services to enhance the banking experience for students. Additionally, it highlights the importance of integrating financial literacy programs within universities to better equip students in their interactions with banking services.

Novelty - The novelty of the research lies in its application of the CARTER model specifically to Islamic banking, with a focus on university students as a significant and underexplored demographic. By collecting empirical data from 150 respondents at Universiti Sains Islam Malaysia, the study offers unique insights into which dimensions of service quality, specifically empathy and assurance, most significantly influence student satisfaction. Additionally, it provides practical recommendations for Islamic banks to enhance their service delivery and highlights the role of universities in promoting financial literacy, thereby contributing to the broader discussion on improving customer relationships in the financial sector.

Type of Paper - Empirical

Keywords: Service Quality; Customer Satisfaction; CARTER Model; Islamic Banking; University Students.

JEL Classification: M30, M31

URI: http://gatrenterprise.com/GATRJournals/JMMR/vol10.1_3.html

DOI: https://doi.org/10.35609/jmmr.2025.10.1(3)

Pages 35 – 54