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.