Cognitive Biases and Customer Patronage in Islamic Banking: Empirical Evidence from Jaiz Bank, Nigeria

Traditional factors such as service quality, trust, and cultural alignment have been widely acknowledged in the discipline of Finance, yet it is the behavioral biases within the discipline that seem to significantly shape customer decisions, often in ways that deviate from rational economic models. This study investigates the influence of cognitive biases—specifically confirmation bias and hindsight bias—on customer patronage of Jaiz Bank. A multiple linear regression analysis was conducted to evaluate the predictive power of these biases on patronage behaviour from an infinite population and a sample size of 128 customers of Jaiz Bank in Nigeria. ANOVA results confirmed the statistical significance of the regression model (F(4, 123) = 125.54, p < .001), supporting the hypothesis that cognitive biases collectively influence customer patronage. However, the individual regression coefficients revealed a different outcome: confirmation bias exhibited a positive but statistically insignificant effect (B = 0.009, p = .896), leading to the retention of the null hypothesis. In contrast, hindsight bias demonstrated a significant positive effect on customer patronage (B = 0.151, p = .004), resulting in the rejection of its corresponding null hypothesis. These findings suggest that while confirmation bias does not play a meaningful role, hindsight bias significantly enhances customer patronage of Jaiz Bank. The study recommends that Jaiz Bank capitalize on this insight by incorporating customers’ favourable retrospective evaluations into their marketing and communication strategies to strengthen patronage.",     "keywords": "confirmation bias, hindsight bias, customer patronage and behavioural finance.